Our main problems are domestic problems. Financial stability is the first
requisite of sound government. We can not escape the effect of world
conditions. We can not avoid the inevitable results of the economic
disorders which have reached all nations. But we shall diminish their harm
to us in proportion as we continue to restore our Government finances to a
secure and endurable position. This we can and must do. Upon that firm
foundation rests the only hope of progress and prosperity. From that source
must come relief for the people.
This is being, accomplished by a drastic but orderly retrenchment, which is
bringing our expenses within our means. The origin of this has been the
determination of the American people, the main support has been the courage
of those in authority, and the effective method has been the Budget System.
The result has involved real sacrifice by department heads, but it has been
made without flinching. This system is a law of the Congress. It represents
your will. It must be maintained, and ought to be strengthened by the
example of your observance. Without a Budget System there can be no fixed
responsibility and no constructive scientific economy.
This great concentration of effort by the administration and Congress has
brought the expenditures, exclusive of the self-supporting Post. Office
Department, down to three billion dollars. It is possible, in consequence,
to make a large reduction in the taxes of the people, which is the sole
object of all curtailment. This is treated at greater length in the Budget
message, and a proposed plan has been presented in detail in a statement by
the Secretary of the Treasury which has my unqualified approval. I
especially commend a decrease on earned incomes, and further abolition of
admission, message, and nuisance taxes. The amusement and educational
value of moving pictures ought not to be taxed. Diminishing charges against
moderate incomes from investment will afford immense relief, while a
revision of the surtaxes will not only provide additional money for capital
investment, thus stimulating industry and employing more but will not
greatly reduce the revenue from that source, and may in the future actually
increase it.
Being opposed to war taxes in time of peace, I am not in favor of
excess-profits taxes. A very great service could be rendered through
immediate enactment of legislation relieving the people of some of the
burden of taxation. To reduce war taxes is to give every home a better
chance.
For seven years the people have borne with uncomplaining courage the
tremendous burden of national and local taxation. These must both be
reduced. The taxes of the Nation must be reduced now as much as prudence
will permit, and expenditures must be reduced accordingly. High taxes reach
everywhere and burden everybody. They gear most heavily upon the poor. They
diminish industry and commerce. They make agriculture unprofitable. They
increase the rates on transportation. They are a charge on every necessary
of life. Of all services which the Congress can render to the country, I
have no hesitation in declaring t neglect it, to postpone it, to obstruct
it by unsound proposals, is to become unworthy of public confidence and
untrue to public trust. The country wants this measure to have the right of
way over an others.
Another reform which is urgent in our fiscal system is the abolition of the
right to issue tax-exempt securities. The existing system not only permits
a large amount of the wealth of the Notion to escape its just burden but
acts as a continual stimulant to municipal extravagance. This should be
prohibited by constitutional amendment. All the wealth of the Nation ought
to contribute its fair share to the expenses of the Nation.