Everyone desires a reduction of taxes, and there is a great preponderance
of sentiment in favor of taxation reform. When I approved the present tax
law, I stated publicly that I did so in spite of certain provisions which I
believed unwise and harmful. One of the most glaring of these was the
making public of the amounts assessed against different income-tax payers.
Although that damage has now been done, I believe its continuation to be
detrimental To the public welfare and bound to decrease public revenues, so
that it ought to be repealed.
Anybody can reduce taxes, but it is not so easy to stand in the gap and
resist the passage of increasing appropriation bills which would make tax
reduction impossible. It will be very easy to measure the strength of the
attachment to reduced taxation by the power with which increased
appropriations are resisted. If at the close of the present session the
Congress has kept within the budget which I propose to present, it will
then be possible to have a moderate amount of tax reduction and all the tax
reform that the Congress may wish for during the next fiscal year. The
country is now feeling the direct stimulus which came from the passage of
the last revenue bill, and under the assurance of a reasonable system of
taxation there is every prospect of an era of prosperity of unprecedented
proportions. But it would be idle to expect any such results unless
business can continue free from excess profits taxation and be accorded a
system of surtaxes at rates which have for their object not the punishment
of success or the discouragement of business, but the production of the
greatest amount of revenue from large incomes. I am convinced that the
larger incomes of the country would actually yield more revenue to the
Government if the basis of taxation were scientifically revised downward.
Moreover the effect of the present method of this taxation is to increase
the cost of interest on productive enterprise and to increase the burden
of rent. It is altogether likely that such reduction would so encourage and
stimulate investment that it would firmly establish our country in the
economic leadership of the world.