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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. The one great rule of composition is to speak the truth. THOREAU ThP Alas Observer An Independent-Liberal Weekly Newspaper Vol. 50 TEXAS, APRIL 4, 1959 10c per copy No. 52 \\\\\\:, Coalition Takes Form AUSTIN Daniel moderates and liberals, forged into an antisales tax coalition, have established a clear majority in the Texas House, confirmed this week in a series of test votes on the Governor’s bookkeeping bill and in three parliamentary battles. The losers : some 40 odd archconservatives. Summed up one observer at week’s end, “This Speaker just hasn’t got a House. He may have a home at the hotel but he hasn’t got one -up here.” The reference was to Speaker of the House Waggoner Carr’s “secret” meeting with businessmen at an Austin hotel Tuesday to discuss the tax impasse. The next day Carr, increasingly alienated from the majority bloc in the house which elected him Speaker, made an effort to regain the helm in a speech promising to assume “personal leadership” on the tax needs, which he pegged at $300 million for, the biennium. The members responded by adjourning the House, a serious parliamentary defeat to Burkett-group conservatives who have been trying to recess the House from day to day rather than adjourn so that Daniel’s tax program could be kept bottled up in the sales taxminded revenue and tax committee. After the parliamentary success Wednesday, the moderate-liberal coalition brought the Governor’s bookkeeping bill to a floor vote Thursday. The bill had undergone a conservative rewriting in the tax committee, and sponsor Frates Seeligson tried to win House passage of the revised version. Through a Daniel-backed amendment by Rep. R. C. Slack, the moderate-liberal group “remodified” the bill back toward its original form as submitted by the Governor and passed it, even though Seeligson announced he would vote against the bill he had handled because of the amendment. On three separate test votes, the moderate-liberal bloc prevailed by margins of 87-40, 8643, and, on final passage, 98-39. Carr is not on record against Daniel’s deficit-retiring program, but he has been moving closer to the right-wing in the House and did not escape the effects of the coalition’s victories. Whether the coalition will gain or lose strength on subsequent issues remains to be seen, but the effect of the votes for the first part of Daniel’s deficit-retiring program was to give the House coalition considerable confidence and a barely-formed Carr-Burkett liaison. a very severe jolt. The book-keeping bill would make possible the reduction of the state deficit by $15.5 million, and the Slack amendment, Rep. Louis Anderson said, cuts the deficit a n’o t h e r $18 million. Some conservatives have been using the growing tax needs as a talking point for a sales tax. The Carr figure of $300 million is one of the larger estimates, though San Antonio conservative Rep. Marshall Bell told the Observer he believes the state’s needs might require as much as $500 million in new money. After the second decision in two days, Carr on Thursday made another effort to direct the House toward a “broad-based” tax. Rep. V. L. Ramsey, appointed by Carr to head the revenue and tax committee, announced the ‘selection of a special five-man sub-committee to draft a general tax measure for committee consideration by April 13. Appointed to the tax-writing panel were Reps. Doc Blanchard and Wesley Roberts, both authors of “broad-based” tax bills now up for committee consideration, and Reps. Joe Burkett, Ben Atwell and Red Cowen. The appointment of Carr’s opponent in the Speaker’s race, Burkett, along with four of the committe’s most unbending “broadbased” tax advocates, was generally interpreted as an open alignment between the Speaker and the sales-tax wing of the House. Ironically, almost all of Carr’s support in the Speaker’s race came from the Daniel-oriented moderates and liberals who last week administered the Burkett group successive defeats. Ramsey’s appointment of the special subcommittee triggered his first public opposition from within his own committee. Rep. Jack Richardson of Uvalde angrily inquired, “Why are we going to sit around here for three more weeks if a subcommittee is going to write this bill?” Abruptly leaving the meeting, Richardson remarked as he passed reporters, “I’m not going to sit around for three weeks on a cut and dried deal.” At week’s end, Carr’s prestige was generally thought to have AUSTIN The much chewed-over unclaimed bank accounts bill was finally delivered up Thursday by the House revenue and tax committee acting under the dual pressure of one of its own members and a rebellious House majority that threatened to direct the .committee to report the bill. The vote was 10 to 8. Earlier, the committee, by a decisive vote, refused to report the bill favorably and postponed further action until Tuesday, then moving on Tuesday to postpone action until Thursday. Before the committee finally acted, Governor Daniel issued a statement that he had “every confidence” the tax committee would send the bill to the House, “by minority report if the majority of the committee still opposes it.” Impatient House members threatened to call a floor vote forcing the committee to report the measure if there w ere further postponements, cleared the way \(after consideraon Thursday. Before caving in to this pressure and reporting the bill Wednesday afternoon, the tax committee struck out nine section’s of the measure applying to un dropped to its lowest point since the session began, and he was said to be repairing his damaged fences. His running feud with the Governor over tax issues came into its clearest focus this week with the revelation of his meeting with businessmen at the Commodore Perry Hotel in Austin. `Super-Secret’ The story was broken by the Dallas News, which described the meeting as “supersecret straightfrom-the-shoulder talks” between Carr and two dozen “top executives of Texas business and industry.” Only comment recorded by any of the participants came from Dallas insuranceman S. J. Hay, who said “All I can say is that it was about taxes.” _ The News listed among the participants Herman Br o w n of Brown and Root Construction Co., Houston; Ben Belt, retired Houston oil executive and Chamber of Commerce leader; James P. Nash, Austin oilman; and Berl E. Godfrey, described by the paper as a “Fort Worth attorney who is the spokesman for many big business interests.” Carr’s speech to the House came the next morning. He began by listing three “all-too-familiar facts,” the state will probably need $300 million in new taxes, revenue needs are going to grow in “our progressive state,” and “piecemeal” taxation will not solve the problem. Of the Governor’s program, Carr said “without attempting to evaluate it piece by piece, we can say that in total it is inadequate to the task before us. The need clearly exists for a type of tax linked closely enough with claimed funds held by utilities, pipeline companies, life insurance companies, and distr i c t and county c l e r k s. The limiting amendment w a s sponsored by Rep. Ben Atwell of Dallas. The bill as amended provides for the state to assume title only to those funds held in banks. Sponsor Marshall Bell of San Antonio, who had earlier indicated he would file a minority report if the committee failed to report his bill favorably, said h e was “shocked” by the deletions, which he said “knocked out 60 per cent of the revenue.” He later said he thcught t h e deleted sections would be restored by the House. The ‘eight “stand-fast” committee members who voted against reporting the bill were Reps. Burkett, Cotten, Cowen, Jones of Dallas, Bass, Matthews, Richardson. and Wilson. The tax committee also ‘heard proposals by Rep. Sam Bass, reducing the tax rate on sulphur; by Rep. Red Cowen, reducing bus transportation taxes; and by Rep. Byron Tunnell, providing that all ad valorem tax penalties for nonpayment prior to 1951 will be forgiven if the taxes are paid by Nov. 1, 1959. All were sent automatically to sub-committee. AUSTIN A close reading of various conservative intelligences on the tax issue indicates that the main difficulty is the problem of hypocrisy in naming a sales tax something else. The Fort Worth Star-Telegram said that “by strong inference” Daniel offers Texas “a choice between sales taxes…between higher sales taxes on gasoline and a faw other things and a sales tax of broad or general application.” In another editorial entitled, “Why Not a Tax That’s Out in the Open?”, the Telegram slammed the Oliver tax, “labeled as an excise or occupation tax,” as “a tax hidden from the public but paid by it nevertheless” and also argued against attempts “to ‘sugarcoat taxes or to camouflage them.” Star Telegram editorial page editor W. L. Redus said that “Texas sentiment seems to be turning toward the sales tax,” noted that ma n y lawmakers pledged against it in their campaigns, and added: “If a sales tax becomes politically acceptable to them, it may have to appear in disguised or sugarcoated form.” The Dallas News has editorialized that a large majority of the legislators assured their constituents they are opposed to a general sales tax, “But … a good many of them seem to have changed their minds.” Declares the News, in an editorial entitled “When Sales Tax is Not Sales Tax”: The Governor “finds the idea abroad that the situation can be solved financially and politically by passing a general sales tax under another name. We pretty nearly have that situation at the present …For exampl?., the state collects over $200 million in taxes on gasoline aad sales taxes. Here only two taxable items are involved. So, the name ‘special sales tax’ is applicable. But they produce more revenue taxed. This procedure could be followed even though it might be necessary to include 50 or 100 items to bring in the revenue necessary. But, by specifically entitling it a ‘special sales tax,’ go home with easy consciences to face their constituents.” Ed Burris, Texas Maufacturers’ Assn. executive vice president, wrote in a letter to members March 6, “Many believe the legislature should provide needed revenue through a broad-based tax.” He did not elaborate. “Texas Businessman’s Tax Advisory” for March 23 spoke of “the dismay among business over unexpected Daniel attack against the term, ‘broad-base.’ Many in the lobby have never defined that term solely as a sales tax. But the thought was that, eventually, any modernizing of, Texas taxing policy would have to be sold by using that terminology.” The publication has also called “the naming of the sales tax bill as the ‘Texas Aid to Education Act’ … demagoguery.” Allen Duckworth, Dallas News political editor, recently recounted a conversation with a lobbyist at breakfast in Austin over whether a sales tax should be called a sales tax. The lobbyist’s clinching remark, Duckworth wrote, was: “Now look, son …Look at it this way. You are a married man. You love you wife. But you don’t always tell her absolutely everything you do, right to the last detail, now do you? That’s the way it is with politics. Sometimes you just can’t afford to spell out things as they really are. You’d get in trouble.” A Difficulty In Nomenclature COMPLICATED PLAY k than any other single tax classification. And together they probably touch more individual pocketbooks. They might be called ‘general special sales taxes.’ “At any rate,” the News continues, “they show the way for the hard-pressed legislators. Let them pass a special sales tax which simply enumerates the commodities and articles to be