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STATE U PPoRTED VNIVER.SiT1ES Bartlett Appears Exclusively in the Texas Observer g ueit editorial Let those flatter who fear, it is not an American art.JEFFERSON `Maybe Some Things Aren’t So Good, But It’s Easy for the Tourists To Get Here’ not Up to Stull Governor Daniel’s plan to retire the state’s deficit is unexceptionable just and, in several respects, courageous. His tax proposals to finance state government the next two years are about half right and the other half wrgng. His program, what he would have the state do, is niggardly. In a way his appearance in the House of Representatives Wednesday was his nearest return to the memories of his youth, to his honorable place in the ranks of the Immortal 56 who nay-said, nine times nay-said, the general sales tax of 1939. Peering out across the legislators’ heads toward that seat, fourth aisle from the back, outside row, from which he first perceived and defended the just principle of taxation that you ought not to burden the plain consumers with taxes the rich do not fairly share, he complained, “My eyes are not good enough to see who sits back there now.” But he remembered : “When entered the legislature in 1939 … I was sympathetic to the idea of a general sales tax. After hearing the arguments in the most bitter fight ever waged on the subject in this legislature, I became convinced that since a general sales tax actually amounts to an income tax on those who spend all they make, but not on all those in the upper incomes who make more money than they spend, that eventually it would lead also to a state income tax to equalize the burden …. Therefore, as one of 56 House members, I helped defeat the sales tax constitutional amendment which the then Governor and the House leaders at that time tried on nine separate votes to force upon this House.” Firm stands he still against a general sales tax, but he bore to the new men only half of the loaf of his ideals, having lost the other half little by little over the long years to the creeping mold of accomodations and re-elections. Twenty years after 1939 the challenge for the legislators who would stand for the people is more complex, nor is there a leering nemesis to match up with the cynical O’Daniel of that time. The ethos of that crisis was Stop, the signal for this one, Stop and Go: Unqualified opposition to any more selective sales taxes of any kind, for they do every one amount “to an income tax on those who spend all they make, but not on all those in the upper incomes who make more money than they spend.” Bold demands for adequate state spending for public education, the public welfare, and the state hospitals and special schools. This session, enactment of enough business taxes to finance these desperately needed improvements. 11 Proposing to reduce the book-keep Published by Texas Observer Co., Ltd. JANUARY 24, 1959 Ronnie Dogger Editor and General Manager Larry Goodwyn, Associate Editor Bassi Payne, Office Manager Published once a week from Austin, Texas. Delivered postage prepaid $4 per annum. Advertising rates available on request. Extra copies 10c each. Quantity prices available on orders. Entered as second-class matter, April 26, 1937, at the Post Office at Austin, Texas, under the Act of March 3, 1879. ing deficit from $65 million to $47 million by adopting a stricter accounting of the state’s cash intake, Daniel has decided to delay that much of the state’s financial need, to which no one can seriously object, since there are no real consequences for state services of doing so. Endorsing the Bell-Hughes-Seeligson bill to have abandoned bank accounts delivered to the state, Daniel risked the wrath of the bankers and some pipeline companies, but he did so in the name of the state’s irrefutable right to its own property under the escheat laws. Proposing the franchise tax law be increased for a year by enough to retire the rest of the deficit, Daniel not only decided to let business bear this burden, he also told “every business corporation” they should be willing to share the cost “because, even with our franchise tax now relatively high, we do not have the corporate income tax which is collected on corporations in all of our adjoining states,” which sounds passably like a threat, and a justified one. Daniel’s proposals for retiring the deficit should be enacted immediately so that the decks will be clear for the problems of the next two years. Since his budget is silent on real needs, however, the extent of the requirements for new income cannot be gauged from his message. The legislators should address themselves to specifying essential added expenditures without which the state’s programs will be seriously damaged : this will be the first task once the deficit is retired. Only then can taxes be discussed in terms of the realistic need. iv Daniel proposes to raise $29 million by five non-tax methods. The regular annual income from the abandoned bank accounts, and the increased collections in existing taxes, are fine prospects. Legislators should be skeptical of the proposed increases in fees and refunds in state servicesthat is, such proposals should be studied line by line to see they are not going to amount to more burdens on average consumers. The Daniel proposal for repeal of the military post exemption from the sales taxes on cigarettes and beer should be opposed on the principle Daniel himself voiced about the general sales taxthis would extend the a-little-here, a-little-there income tax on those who spend all they make, specifically, underpaid GI’s. The main item in this group of ideas, changing the way the state computes the franchise tax so that it will yield more from interstate business, would merely put Texas in step with most other states. Daniel’s pure tax programs would fall 62 percent on consumers and 38 EDITORIAL and BUSINESS OFFICE: 504 West 24th St., Austin, Texas. Phone GReenwood 7-0746. HOUSTON OFFICE: 1012 Dennis, Mrs. R. D. Randolph, We will serve no group or party but will hew hard to the truth as we find it and the right as we see it. We are dedicated to the whole truth, to human values above all interests, to the rights of man as the foundation of democracy; we will take orders from none but our own conscience, and never will we overlook or misrepresent the truth to serve the interests of the powerful or cater to the Ignoble in the human spirit. A marvelous editorial appeared in the Dallas Morning News for January 20, 1959. We trust the News will stand fast now that it has made explicit and irrefutable its opposition to the gasoline sales tax. We reprint the editorial, opining only that the caption, “Lay Off That Gas Tax,” actually should have read, “Lay Off That Gasoline Tax” \(the headline writer must have been a day or two behind Late dispatches from Washington indicate that President Eisenhower will continue to press for a one and one-half cent raise in the federal gasoline tax. Dispatches from Austin state that Governor Daniel wants a raise in the state gasoline tax. In the meantime, other states, including populous New York, are moving to increase gasoline taxes. In all instances, these should be resisted. Today the automobile owner is the most heavily burdened taxpayer in the country. In Texas, for example, the average citizen pays more for the privilege of driving a carincluding gasoline, license fee and ad valorem taxesthan he pays for any other purpose. In fact, the poor man will usually pay the state more for the percent on natural gas companies. In other words, two thirds of his tax plan is sales tax, one third business tax. His natural gas tax, apart from the question of its form, would raise only $20 million a year, whereas two years ago he suggested that such a ‘lax should raise $35 million.. This is an inexplicable retreat. The natural gas tax should be scaled higher as revenue needs require. His proposed increases in the sales taxes on tobacco \(“with the exception right ; they arc all income taxes on privilege of driving a car than he will pay the state for all other purposes combined. President Eisenhower presents his one and a half cent raise as an additional use tax to expedite the big interstate federal highway program which he says ‘is lagging.’ In the first place, this program is lagging, not because revenues have failed to come up to estimates, but because the estimates of the cost of this program have more than doubled. Furthermore, it is a fact that the Federal Government is now diverting from the proceeds from the gasoline tax about $1.5 billion a year for purposes other than highway building and maintenance. In most states today the consumer of gasoline is paying more than one third of the retail price of gasoline to federal and state governments in the form of taxes. This is an unconscionable levy. And it has aspects that are generally overlooked. For example, here in Texas the same people who are strenuously opposing a general sales tax will favor an increased gasoline tax. Actually the gasoline tax is a general sales tax in the sense that it is burdening nearly every citizen even though it is a tax on a single product. 19 consumers only, the prices he would have the citizens pay for his own tiptoed back-off from the corporate board room. Under no circumstances should the gasoline sales tax be increased \(as the Until the legislature swings itself around to facing the need for a graduated personal income tax or a graduated corporate profits tax, or both, the alternative, for whatever extra income is needed after these parasitic sales taxes are rejected, may very well be Rep. Eckhardt’s graduated tax on the 20 major oil companies, the very ones. to hoist them, sirs, on their own petrol, which are bringing in all of that wicked, oily, foreign, oil. THE TEXAS OBSERVER As olo