Radio and Television Address to the American People on the Tax Program.
[ Broadcast from the White House at 9:00 p.m. ]
Good evening, my friends:
I would like to talk with you tonight about something that concerns each of us personally and directly--especially on March 15th. I want to talk about our taxes--and about the new tax program that Congress will debate this week.
Now, I can talk only about a few essential facts in this program because, my friends, this 900-page book is the new tax program, and this 500-page book is the explanation made by the Ways and Means Committee of the House of Representatives to the House regarding this bill. You and I tonight will be discussing only a very few of the high spots.
Now, we recognize, of course, that taxes are necessary. We know that through taxes our Government gets the money to carry on its necessary functions. The most costly is defense.
Only at our peril may we pursue a penny wise, pound foolish policy in regard to the Nation's security. In the past year, we have been able to make real savings in defense costs. But despite these savings, 70 cents out of each dollar spent by your Government still go for defense purposes.
The remaining 30 cents go for many things: to meet our obligations to veterans--to carry on important activities overseas--to pay the interest on the gigantic public debt--and to do within our country what Abraham Lincoln described as "those things which the individual cannot do at all or so well do for himself."
I know how burdensome your taxes have been and continue to be. So we are watching every expenditure of Government--to eliminate waste, duplication, and luxury. But while we are insisting upon good management and thrift in Government, we have, at the same time, asked the Congress to approve a great program to build a stronger America for all our people.
So let me give you some examples of the things we want to do in this program:
We want to improve and expand our social security program.
We want a broader and stronger system of unemployment insurance. We want more and better homes for our people. We want to do away with slums in our cities.
We want to foster a much improved health program.
We want a better and a lasting farm program, with better reclamation and conservation.
We want an improved Taft-Hartley Act to protect workers and employers.
We want wider markets overseas for our products.
We want--above all--maximum protection of freedom and a strong and growing economy--an economy free from both inflation and depression.
Most of these things cost money. Without adequate revenue, most of them would be abandoned or curtailed. That is why our tax proposal is the cornerstone of the entire effort. It is a tax plan designed to be fair to all. I am sure you join me in the hope that the Congress, before it adjourns, will approve this program for a stronger America.
And along with this great plan for America, we want also to reduce your taxes so you can save or spend more of your own money, as you personally desire.
Now, to reduce taxes, we had to find some way of saving money, for despite many years of heavy taxation, our Government has been running deeper and deeper into debt. A year ago, this administration inherited a budget calling for a spending program that we have since reduced by twelve billion dollars. Of this total saving, seven billion dollars is being made this year.
Now, seven billion dollars is so much money--even in Washington-that it's hard to know what it really means. Let's see if we can get some idea of how much it is.
The money American farmers got last year for all the corn and all the wheat grown in our entire country was seven billion dollars.
The money Americans paid in all of last year for household utilities and for fuel amounted to seven billion dollars.
The money Americans pay each year for doctor, dentist, medical and hospital bills is seven billion dollars.
Now, I think you will agree that we have, indeed, saved a lot of money. Without these savings, there could have been no tax relief for anyone. Because of these savings, your tax cuts were possible.
On January 1st this year your taxes were cut by five billion dollars. The tax revision program now in Congress will cut taxes by over one and a half billion dollars more. The total may be nearly seven billion dollars. Thus the Government is turning back to you about all that we expect to save this year. Meanwhile, we are seeing to it that the Government deficit, instead of growing, may continue to shrink.
Now, in the light of all this, let's look at the tax program now in Congress.
To start with, it is the first time in half a century that our tax laws have been completely overhauled. This long overdue reform of old tax laws brings you benefits which go beyond the tax reductions I have just mentioned. Millions of individual taxpayers--many of you listening--will benefit. Now here are some of the ways in which you will benefit: You will have larger deductions for your medical expenses.
There will be special deductions for the cost of child care for those among you who are widows who work.
Fairer tax treatment for the widows of policemen and firemen and others who have fraternal or private pension plans.
Fairer tax consideration for those of you who are retired.
Deductions of up to $100 a week for those of you receiving sickness or accident benefits.
There are, in addition, important provisions to encourage the growth and expansion of industry, the creation of jobs, and the starting of new and small businesses.
Now, one of these provisions is of particular interest to those among you who have made or want to make investments to help meet the expenses of a growing family or to meet the requirements of old age. This year, we proposed to reduce by a modest amount or percentage the existing double taxation on dividend income.
This will be important to. all of us, whether our savings are large or small. It will encourage Americans to invest in their country's future. And let us remember this most important fact: the average investment needed to buy the tools and facilities to give one of our workmen a job runs about eight to ten thousand dollars. The more we can encourage savings and investments, the more prosperous will be 160 million American citizens.
Just as we need more spending by consumers, so we need buyers for items produced by heavy industry--for lathes and looms and giant generators. The making of these things gives jobs to millions of our people. This carefully balanced tax program will encourage this kind of production. It will make new jobs, larger payrolls, and improved products. It will give us lower price tags on many of the things we want and need.
And here is another important part of this program. It concerns the income tax on corporations. Under the law, this tax would be reduced two weeks from today. Now I have asked the Congress to keep this tax at 52 percent and not to permit it to go down to 47 percent at this time. The extension of this extra tax on corporations will provide enough money to pay the costs of the benefits this tax revision program will bring to individuals and business.
So, there you have, in broad outline, the new tax revision program. I most earnestly hope that the Congress will pass it.
But--this is an election year. Some think it is good politics to. promise more and more Government spending, and at the same time, more and more tax cuts for all. We know, from bitter experience, what such a policy would finally lead to. It would make our dollars buy less. It would raise the price of rent, of clothing, and of groceries. It would pass on still larger debts to our children.
Some have suggested raising personal income tax exemptions from $600 to $800, and soon to $1,000, even though the Federal budget is not in balance. You've seen this kind of deal before. It looks good on the surface but it looks a lot different when you dig into it.
The $1,000 exemption would excuse one taxpayer in every three from all Federal income taxes. The share of that one-third would have to be paid by the other two-thirds.
I think this is wrong. I am for everybody paying his fair share.
When the time comes to cut income taxes still more, let's cut them. But I do not believe that the way to do it is to excuse millions of taxpayers from paying any income tax at all.
The good American doesn't ask for favored position or treatment. Naturally he wants all fellow citizens to pay their fair share of the taxes, just as he has to do, and he wants every cent collected to be spent wisely and economically. But every real American is proud to carry his share of that national burden. In war and peace, I have seen countless examples of American pride and of the unassuming but inspiring courage of young American citizens. I simply do not believe for one second that anyone privileged to live in this country wants someone else to pay his own fair and just share of the cost of his Government.
Aside from that, let's just be practical. The loss of revenue involved in this proposal would be a serious blow to your Government.
A $100 increase in the exemption would cost the Government two and a half billion dollars. To increase the personal exemption to one thousand dollars would cost eight billion dollars. This, of course, would be on top of the large tax cuts our savings have already made possible this year.
Now, in your interest I must and will oppose such an unsound tax proposal. I most earnestly hope that it will be rejected by the Congress. Especially, I hope you feel the same way.
Every dollar spent by the Government must be paid for either by taxes or by more borrowing with greater debt. To make large additional savings in the cost of Government at this moment means seriously weakening our national defense. I do not know any friend of the United States who wants that, under present world conditions. Now the only other way to make more tax cuts now is to have bigger and bigger deficits and to borrow more and more money. Either we or our children will have to bear the burden of this debt. This is one kind of chicken that always comes home to roost. An unwise tax cutter, my fellow citizens, is no real friend of the taxpayer.
Now, this evening I mustn't overlook those among us who are professionally faint hearted. They have been arguing lately that we are on the very brink of economic disaster. Viewing with gloom is only to be expected in the spring of an election year. The truth is, we do not have a depression. And what's more, as I have said time and time again, your Government will continue to use its full powers to make sure that we don't have one.
A month ago, I expressed to the Congress my conviction that we would be able to go from wartime to peacetime conditions without serious economic trouble. Nothing has happened since to change my mind.
Some unemployment has developed in different parts of the country, but the Nation as a whole continues to be prosperous. Unemployment has reached about the level it was in the spring of 1950. The broad program I have proposed to the Congress will strengthen our economy. When it is approved by Congress, it will both increase the number of jobs and help make every man secure in the job that he has.
Of course, everyone wants tax reductions of the right kind, at the right time. That specifically includes this administration. This has been proved by the large tax cuts we have already made possible this year. But at this time economic conditions do not call for an emergency program that would justify larger Federal deficits and further inflation through large additional tax reductions.
My friends, a century and a half ago, George Washington gave us some good advice. He said we should keep a good national defense. He also said we should not ungenerously impose upon our children the burdens which we ourselves ought to bear.
I know you and I agree with Washington on these points.
We agree, too, on efficiency in Government, and on a forward-looking program for a stronger America--an America whose people know good health and prosperity--who are secure, day and night, from fear at home or abroad. That is the aim of this tax program.
That goal, my fellow citizens, is a goal worthy of our people.
Dwight D. Eisenhower, Radio and Television Address to the American People on the Tax Program. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/233603