Tax and Debt Limitation

February 13, 1952

Report Outline
Tax Revolt and Measures to Ease Tax Load
Movement for Ceiling on Income-Tax Rates
Case for and Against Tax and Debt Limits

Tax Revolt and Measures to Ease Tax Load

Budget estimates submitted to Congress by President Truman on Jan. 21 indicate that, without additional taxes, the federal government will incur a deficit of $8.2 billion in the fiscal year 1952 and a deficit of $14.4 billion in the fiscal year 1953. Deficits of that magnitude will raise the public debt from an estimated $260,222 million next June 30 to an estimated $274,922 million on June 30, 1953, The latter sum is within $78 million of the present statutory debt limit of $275 billion.

The President conceded in his budget message that “the increase in expenditures immediately ahead” could not be met on a strict pay-as-we-go basis. He said, however, that the situation called “at the very least for the amount of additional revenue by which last year's legislation fell short of my recommendations”. In 1951 the President sought a minimum of $10 billion in additional revenue, but the 1951 Revenue Act is expected to increase federal receipts by only between $5.4 and $5.7 billion annually. In effect, therefore, the current proposal is for tax changes to yield an additional $4.3 to $4.6 billion. In his economic message, Jan. 16, the President had put the same request in the form of an “urgent recommendation” and said the added revenue could be obtained “by eliminating loopholes and special privileges, and by some tax rate increases”.

Opposition in Congress to Truman's Tax Requests

Three tax bills, enacted since the Korean war began in mid-1950, already have raised federal taxes by around $15 billion a year and increased the burden of those taxes by nearly one-third. Reaction in Congress to President Truman's request for still another increase was strongly adverse among majority as well as minority spokesmen. What the President had to say in his budget and economic messages did not alter previously expressed opposition to any new major tax legislation at the present session.

ISSUE TRACKER for Related Reports
Federal Budget and National Debt
Sep. 01, 2017  National Debt
Jul. 12, 2013  Government Spending
May 15, 2012  State Capitalism
Mar. 18, 2011  National Debt
Nov. 14, 2008  The National Debt
Dec. 09, 2005  Budget Deficit
Apr. 13, 2001  Budget Surplus
Feb. 01, 1991  Recession's Regional Impact
Jan. 20, 1984  Federal Budget Deficit
Sep. 09, 1977  Federal Reorganization and Budget Reform
Nov. 24, 1972  Limits on Federal Spending
Jan. 08, 1969  Federal Budget Making
Dec. 06, 1967  National Debt Management
Aug. 01, 1962  Fiscal and Budget Policy
Nov. 27, 1957  National Debt Limit
Mar. 20, 1957  Spending Controls
Dec. 24, 1953  Public Debt Limit
Feb. 13, 1952  Tax and Debt Limitation
Nov. 30, 1949  Government Spending
Jan. 06, 1948  Legislative Budget-Making
May 23, 1944  The National Debt
Feb. 01, 1943  The Executive Budget and Appropriations by Congress
Dec. 27, 1939  Revision of the Federal Budget System
Oct. 10, 1938  The Outstanding Government Debt
Nov. 20, 1937  Budget Balancing vs. Pump Priming
May 02, 1936  The Deficit and the Public Debt
Oct. 19, 1934  The Federal Budget and the Public Debt
Feb. 10, 1933  Extraordinary Budgeting of Federal Finances
Dec. 01, 1932  Reduction of Federal Expenditures
Dec. 01, 1930  The National Budget System
Oct. 02, 1930  Federal Revenues and Expenditures
Nov. 02, 1927  The Public Debt and Foreign Loans
Nov. 15, 1926  Rising Cost of Government in the United States
Feb. 05, 1925  Four Years Under the Budget System
Deficit, Federal Debt, and Balanced Budget
Federal Taxes
State, Local, and Intergovernmental Relations