Remarks Upon Announcing Plans To Recommend a Reduction in Excise Taxes.

I HAVE just met with Chairman Wilbur Mills of the Committee on Ways and Means and Senator Russell Long of the Senate Finance Committee, Secretary Fowler and other members of his Department, and at lunch we discussed the proposals that I will recommend on Monday to the Congress to reduce excise taxes.

I regret that due to a previous commitment, which I was unwilling to ask him to cancel, Chairman Harry Byrd of the Senate Finance Committee could not be with us at lunch today.

I will recommend a total excise tax cut of approximately $4 billion in amount. If Congress approves, one reduction of $1,750 million will take place on July the 1st of this year; another reduction of $1,750 million will be effective on January 1, 1966; and further reductions totaling $464 million will take place between 1967 and 1970.

This reduction--more than double the amount that I recommended in January--is possible and desirable because Federal tax revenues, responding, we think, very strongly to our expanding economy, are now expected to be about $1 1/2 billion higher both in fiscal 1965 and fiscal 1966 than we estimated only last January.

Our existing supply of manpower and industrial capacity, and the rapid rise in both, can readily absorb the added stimulus of the larger cuts without endangering our excellent record of price stability, which we are so anxious to preserve.

This reduction will spur the continued growth of our economy, which is, as you know, now in the 51st month of unbroken expansion. It will lower prices. It will raise business profits. It will create new jobs. It will end an unfair burden on many businesses and many workers. It will cut the Government's costs of tax collection and enforcements. It will reduce the burden of regressive taxation on low and moderate income families.

Hundreds of commodities and services will benefit from the removal or reduction of retail taxes on such items as handbags, luggage, toilet articles, jewelry, and furs; manufacturers' taxes on sporting goods, radios, television sets, air conditioners, records, musical instruments, cameras and film, refrigerators and freezers, and many other items; the tax on local and long-distance telephone services, which I propose to reduce from 10 percent to 3 percent by January 1966, and completely eliminate by 1969; the automobile tax, which I propose to reduce from 10 percent to 7 percent this year, and to 5 percent by 1967.

The reduction in the tax on automobiles and air conditioners will apply to all purchases beginning today, May 15.

Many of these taxes, as you know, were enacted during the depression and the war. They need to be reexamined to make sure that they do not hold back our growing peacetime economy.

The tax reduction I will recommend will be another major step toward greater purchasing power for individual Americans, higher production and more jobs, increased initiative and efficiency, and a balanced budget in a balanced economy.

I am also proposing needed revisions of the user charges for our national transportation system. Those who use our highways, our airways, and our waterways should contribute more adequately, and more equitably, to the cost of building and maintaining the facilities provided for their use by the Federal Government.

The Committee on Ways and Means has already held extensive public hearings on excise tax reductions. Chairman Mills told me at lunch that he will start executive hearings on Tuesday morning of next week. We are very grateful for this prompt and judicious consideration, and if it is followed by action in the House and the Senate we know that it will help assure the continued health and the strength of the Nation's economy.

Today we have more people employed than ever before. Today--this last quarter, the first quarter of this year--business profits are at an all time high.

We want to pass a tax bill that will continue to make more jobs, to make more profits, and to have a more profitable economy for all America.