Veto of Bill Providing for Federal Aid to State Fish Restoration and Management Projects.
To the House of Representatives:
I return herewith, without my approval, H.R. 1746 "An act to provide that the United States shall aid the States in fish restoration and management projects, and for other purposes".
This bill provides in effect for an annual continuing appropriation of all revenues derived from the tax imposed by section 3406 of the Internal Revenue Code on fishing rods, creels, reels and artificial lures, baits, and flies for the fiscal year ending June 30, 1947, and each fiscal year thereafter. The revenues thus designated would, in effect, be apportioned among the states and territories for the promotion of approved fish restoration and management projects, and expended in accordance with policies of coordination prescribed by the Secretary of Interior.
Under the bill, the tax on fishing articles would be used exclusively for the promotion of recreational fishing. On the other hand, purchasers of numerous other articles of sporting equipment subject to tax under section 3406 would be taxed for the general support of Government functions.
It is believed that the "earmarking" of Federal tax revenues, as provided in the bill, constitutes undesirable tax and fiscal policy. The "earmarking" of tax collections amounts to preferential treatment of certain taxpayers and tends to weaken effective budgetary control of expenditures. Fishing equipment is but one of thousands of articles subject to Federal excise tax, the revenues from which are now deposited in the general funds of the United States and available for general governmental purposes. If the revenue from the sale of fishing equipment is to be diverted to the particular benefit of those who have paid the tax, similar demands can be made on behalf of other industries and activities affected by the tax. The Government's need for unrestricted funds does not permit such diversion of tax revenues.
The bill would provide a permanent indefinite appropriation contrary to the policy of Congress incorporated in the Permanent Appropriation Repeal Act, 1934, approved June 26, 1934. Whether or not the amount thus devoted to the program would be sufficient at the present time, fluctuations in revenues or changes in the needs of the program may make the "earmarked" appropriation either inadequate, in which case the program will fail of its intended purpose, or excessive, resulting in waste of Government funds. Prudent expenditure policy would indicate that the amount of funds to be expended should be subject to continuous budgetary and legislative appraisal.
The bill also has serious administrative deficiencies. The funds appropriated there- under include not only the tax revenues to be collected subsequent to enactment of the Act, but also an amount equivalent to such tax revenues for fiscal years ending in 1947, 1948 and 1949. Inasmuch, however, as manufacturers now report only the total amount of tax on sporting goods under section 3406 without any breakdown showing the amount of tax due with respect to fishing equipment, it is impossible to ascertain the amount of tax collected on the items named in the bill for any particular period up to the present time.
Conceding the desirability of Federal and State cooperation in the development of fish restoration projects, it is believed that whatever funds are required to achieve such purposes should be provided by annual appropriation, rather than by the arbitrary method prescribed in this bill.
I have noted that H.R. 1746 follows the undesirable precedent created by the Act of September 2, 1937 (16 U.S.C. 669-669j) which earmarked taxes on firearms, shells, and cartridges for wildlife restoration purposes. The present bill, however, is more objectionable than its predecessor in several respects. Unlike the 1937 Act, it is retroactive in application. Moreover, the 1937 Act earmarked revenues from a single taxing provision, whereas the present bill applies to only one among many items covered by the same taxing provision. Its enactment, therefore, would give particular impetus to the extension of the same unsound principle to other items in the same tax category, notably other types of sporting goods.
HARRY S. TRUMAN
Harry S Truman, Veto of Bill Providing for Federal Aid to State Fish Restoration and Management Projects. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/230163