Statement by the President Upon Signing Bill Revising the Internal Revenue Code.
THIS BILL which today becomes law is the excellent result of cooperative efforts by the Congress and the Department of the Treasury to give our tax code its first complete revision in seventy-five years. It is a good law. It will benefit all Americans.
This law brings tax relief to large numbers of our citizens. It is, in fact, part of a comprehensive tax program which, since January 1 of this year, will have provided for tax cuts totaling $7,400,000,000--the largest dollar tax cut in any year in the nation's history.
It is a law which will help millions of Americans by giving them fairer tax treatment than they now receive. For example:
The parents of dependent children who work can continue to claim their children as dependents, no matter how much the children earn.
Retired people and widows living on retirement income other than social security will receive a tax credit which will in effect be equal to the tax credit now given to people living on social security income.
Taxpayers will now be able to claim as dependents people who are not related to them, so long as they provide more than one-half of such dependents' support.
Farmers active in soil and water conservation will be able to deduct from their income the cost of such conservation work, up to 25 percent of their gross income.
People with large medical expenses will now be able to deduct from their income all such expenses which exceed three percent (rather than five percent) of their incomes, and the maximum amounts deductible will be twice as large as they were in the past.
Working widows and many other mothers with child-care expenses will be able to deduct from their income up to $600 a year for the costs of taking care of their children.
People receiving sick benefits paid by employers will not have to pay any tax on such income up to $ 100 a week.
In addition to removing inequities in our tax system, this law will help our economy expand and thus add materially to the strength of our nation. It will help our people produce better goods at cheaper prices-and it will help to create more jobs.
This economic growth will be fostered by such provisions as more flexible depreciation and better tax treatment of research and development costs, thus encouraging all business--large and small--to modernize and expand. And, partial reduction of the double taxation of income from dividends will stimulate the investment of savings by our private citizens and so make available the thousands of dollars that provide the plant tools and power needed for each new job in America.
Numerous other provisions will also help to expand the economy. These include the easing of the so-called penalty tax on accumulated earnings when necessary for legitimate business purposes; the extension of the carry-back of net operating losses, and the greater flexibility of the tax treatment of recapitalizations and reorganizations.
Almost balancing the revenue lost through these tax reductions is additional revenue of $1.2 billion gained by an extension of the 52 percent tax on corporation profits. The new law also closes more than fifty loopholes through which, in the past, some taxpayers may have attempted to avoid their fair share of the tax burden.
And, at long last, the American people will have--because of this law-- much needed clarification of many tax provisions which previously have been subject to controversy.
I congratulate the Congress and its leaders for having enacted this monumental tax revision. Its passage is a tribute to a Congress which in this session has made so many major contributions to the prosperity and security of the people of our country.
Note: The Internal Revenue Code of 1954 is Public Law 591, 83d Congress (68A Stat. 3 ).
Dwight D. Eisenhower, Statement by the President Upon Signing Bill Revising the Internal Revenue Code. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/232523