Tax Expirations and the Federal Budget
Treasury Search for New Sources of Revenue
The desire of the Eisenhower administration to bring the budget into balance before the 1956 presidential election—in the face of continuing heavy outlays for national and international needs—makes it probable that new and increased excise taxes, on either a uniform or a selective basis, will be recommended to Congress in January. Secretary of the Treasury Humphrey has said a general sales tax is under study but that it is only one of some 40-odd proposals for raising additional revenue. Rising controversy over sales taxation caused President Eisenhower to announce at his Sept. 30 press conference that the administration did not plan to ask Congress to enact a retail sales tax. But he did not rule out the possibility that a general manufacturers' excise tax would be recommended.
Difficulties confronting the administration in its efforts to balance the budget had been put in a nutshell by the President, May 20, when he had been four months in office, in a special tax message to Congress.
The fact is [he said] that in 1954 and 1955 we reach the peak of expenditures caused by earlier appropriations and programed and contracted for expenditure at the same time government revenues are sharply reduced. These simple facts highlight the problems we have faced in trying to hring prudence and foresight into our budgetary planning. …To reduce expenditures enough to balance the 1954 budget would require more drastic curtailment of our national security programs than we can safely afford in today's troubled world.