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THE BURDEN OF PROOF IS THE LOBBY’S AUSTIN So now the to , bill goes to the Senate where the casual gentlemen of that body must steel themselves to tax on business ever levied in one Texas legislature. A very distasteful prospect for the business-oriented Senate. and one they. are not likely to lean into with much alacrity. The Senate’s decision will likely come wafting back to the house sometime in -the last 72 hours of the session. The Senate version will be almost unrecognizable, of course, but an effort will be made to power it through the House. The session will most likely end with the two Douses in deadlock over their widely du tering bills. Or perhaps the Senate will’not produce a bill at all during the first special session, preferring to plead lack TULIA The tax battle in Austin continues. The problem of where to assess taxes has long been a thorny one. The traditional philosophy in this country has been that taxes should be assessed according to ability to pay. The West Texas Chamber of Commerce has for years expounded the virtues of a sales tax. Fred Husbands, executive vice president of the WTCC, called a for a sales tax recently at Plainview. . The WTCC and Texas big business has just about been taxed out of business. It is interesting to probe beneath the surface of this fight to place a heavier burden on the ultimate consumer who even now is in -reality the only taxpayer. For instance. Sixteen oil companies produce half the oil in Texas. They are headquartered in New Jersey, New York, Pennsylvania, Ohio, Indiana, and Mainenone of them in Texas. One of them, Standard Oil of New Jersey, only list year completed its digestion of a company which had played an historic role in Texas economic history, Humble Oil & Refining Co. . Jersey Standard is one of the three most massive corporations in the world. Every one of these 16 non-Texas companies can be taxed by the Texas legislature without one of the other 6,600 Texas oil producers paying another penny. These 16 major out-of-state oil companies earned a net income of $2,729,522,268 in 1957 They paid ‘dividends in 1957 of $1,543,347,234 and their earned surplus at the end of 1957 totaled $11,739,333,413. But instead of turning to these companies for new income, Waggoner Carr, the Texas Manufacturers’ Association, the oil lobby, the Dallas News, the Fort Worth StarTelegram, and others of the frater , pity are trying to induce, intimidate or entice the legislators of Texas to tax their own people with a general sales tax or a dishonestly packaged array of selective sales taxes. Meanwhile, these 16 out-of-state oil companies which produce half the Texas oil have the support of those mentioned above in making those pay who have the least ability. Even Price Daniel said bitterly in San Antonio that “giant corporations are having more to do with the thinking of Texas legislators than the people of the state.” And when we read that Daniel thinks big business has gone too far, we feel like Congressman W. R. Poage did recently in a speech in Washington concerning a proposal of the USDA. Said Poage, “I hear that this proposal has aroused the Farm Bureau … and anything that arouses the Farm Bureau scares me to death !” of time. In either event, the Senate must now expose itself to the apprais-, als of the Governor, publicly aired and reinforced with references to the lobby. Such is the picture after four and a half months of maneuvering. . THE LAURELS thus far belong to Price Daniel and those who carried his program in the House. His proposals, as outlined to the legislature in his opening address in January have now passed the House with only minor modifications, mostly made by the Governor himself. The lobbyists who viewed such a half business tax, half sales .tax program with open contempt in January have seen their own substitute riddled and defeated in the House and the Governor’s program survive two days of sharp shooting to emerge virtually T’S QUITE American sounding to sing the song of “free enterprise,” which in this age has only one meaningfreedom of the big to exploit the little, freedom of the big grocery chains to/ force out of business the small independent, freedom of the Big Three in the automo ‘ tive industry to control the automotive market. Even in Tulia it sounds red, white, and bluish to champion the cause of big business, to point out its contribution to our way of life, to stress its needs for profit and for funds with which to expapd, to point out how it is a champion of “the American Way” and our system of free enterprise, to point out that it must not be “over-taxed”and, we might add kept prosperous enough to finance the GOP political campaigns. Of course, most of these points are soundbut it is also sound to point out that the little farmer, the little shop keeper, the men who work for salaries or for wages have also contributed something to our way of life. They must also be protected from excessive taxation. The simple fact is that somebody is going to have to dig up more tax money. If Tulians feel they are more able to pay additional taxes than the 16 major oil companies whose net in WASHINGTON How to Lose an ElectionLyndon Johnson of Texas may think he’s the life of the party, but there are many thoughtful Democrats who think he may be the death of it. It is now five months since the supposedly “ultra-liberal” 86th Congress has been in session. Last November the Democrats swept the country and even the most optimistic Republicans could see nothing to cheer about except for Nelson Rockefeller’s victory in New York. And Rockefeller was too independent to make rock-ribbed Republicans ‘feel he was one of them. But what the Republicans could not do for themselves, Johnson and Speaker Sam Rayburn have done for them. There is more hope in Republican ranks right now, less than a year after their worst defeat since the ’30’s, than there has been since Gen. Eisenhower agreed to become a candidate back in 1952. The Wall St. Journal, expressing no regrets, says that this Congress is “cautious, compromising and unexciting.” Big businessmen, it says in effect, have nothing to worry about. THE TEXAS OBSERVER Page 5 May 30, 1959 unscathed. In some respects, these developments have constituted more than a simple setback for the lobby ; at the final stages of. the House tax debate last week it looked somewhat like a rout. There is some speculation that7after losing the first effort to defeat Daniel’s bill by eleven votes on Wednesday =they withdrew from the conflict temporarily, conceding defeat in the House, and .let the measure achieve final passage by an even wider margin. With Daniel making public capital out of the conduct of Austin lobbyists, carrying the banner of the people against the “great .corporate giants,” the lobby, so the speculation goes, decided he was creating a public image much too favorable for himself and much too detrimental to their own aspirations. While the liberals’ role in this affair was not as dominant as Ben At come was nearly $3 billion in 1957, who paid out $1% billion in dividends and whose earned surplus at the end of 1957 was nearly $12 billion, then let them join the WTCC in advocating a sales tax which is one more way NOT to tax according to ability to pay. Under a sales tax, we know of Tulia families making $75 a week who would pay more taxes than some whose annual income is computed in five and six figures. We know families of six who are trying to live on $75 a week who will spend more for groceries than will wealthy elderly coupleswhich means that the family of six would pay more taxes on food under a sales tax plan.than a wealthy couple. WE AREN’T MAD at big business or the 16 major oil companies’ any more than we are made at New York City or Chicago. It’s just that when New York or Chicago try to make us pay a part of their rightful share of the taxes, we don’t like it. Perhaps the 16 major oil companies feel that they are already paying enough taxes. Well, we have news for them. We feel the same way! And we feel that we, a small Tulia business, are much closer to the breaking point than is Standard of New Jersey: H. M. BAGGARLY In The Tulia Herald While it offers no simple explanation of the reasons for the Democratic slow-down, it suggests that business is once again so good all the pressure from the “liberal-left” has lost its steam. This explanation is not without its merits. But I think the problem goes deeper than that ; it goes to the per sonality and private interests of the men who are running the show. , At the beginning of the year Johnson made a number of high-sounding speeches dealing with world of fairs and outer space. No one took him seriously because everyone knew Lyndon’s heart belongs deep in the heart of Texas oil. The Return from Outer Space :Johnson managed to get some good publicity out of these “statesmanlike” pronouncements and that was about all he wanted. When there was no more mileage to be gotten he returned to his ordinary pursuits as champion of special interests, even agreed that there must be no reckless federal “spending,” and let Sen. Harry F. Byrd scuttle a Senate-approved w or k m e n’s compensation measure by yielding in a House-Senate conference committee. Nobody has asked Johnson to be the Democratic “leader.” He stepped well’s press handout would indicate \(t h e Dallas representative called House passage of the Governor’s prog6.m “the first victory by the leftnevertheless have not been as battered as has been the custom in these provinces for years. In the relative sense that Daniel’s program is more palatable to any legislator not tied exclusively to ‘corporate thought processes, its passage marks a not tin- joyful moment for liberals. The real losers thus far are of course the major oil and gas companies owning long line gas transmission subsidiaries and the interstate corporations who are seriously affected by Daniel’s two-factor franchise tax. For the first time in the history of the state, they have been marked down to bear something more than a token part of the tax burden. Heretofore,’ the oil producers, mostly Texansas distinguished from the eastern majorshave paid most of the natural resources production taxes in the state. Also on the losing side are those 30 or 40 ‘House conservatives who have staked their individual political futures on a sales tax-slanted revenue program. They have all become much more vulnerable and will find their votes against gas taxes and for sales taxes difficult to defend against aspiring opponents. To be identified with a regressive tax program that passes is one thing; to support unpopular taxes and then see the legislature adopt more palatable ones is quite another. Perhaps half of the far right wing in,the House may not be back next time. T IS MUCH harder to take a business tax out of a bill than prevent it from being inserted in the first placein the same sense that Republicans, upon returning to office, find it difficult to repeal reforms enacted by liberals while they were away. The burden of proof, then, has shifted to the lobby. They have underestimated Daniel a n d doubtless haveat lastperCeived their mistake in treating him with contempt in early spring. Doubtless they will try to compromise him out of a substantial part of his program. How the Governor will react is quite beyond the ken of this reporter. He has called most of the shots right so far, has earned the grudging respect of his enemies, and has emerged as a stronger public figure in May than he was in January. L. G. in when a vacuum existed. None of ‘the Democrats from those populous states, whose support is needed for the party to win in 1960, wants Johnson to continue as party boss. But he likes the job and he is staying. All this, of course, is made to order for Vice President Nixon. If there are no “big issues” developed by the opposition partyor if its congressional leaders” believe none exists then what reason is there for choosing a Democrat for President next year? Nixon will claim that he knows more about the inner workings of the federal government than anyone now being considered by the Democrats. There will be a lot of people who will believe him and a lot of others who will take a “what the hell” attitude and simply stay away from the polls. What Johnson does not know, or does not care about, is the simple political’ fact that Democratic victory is not inevitable. If the party spokesmen contribute to political indifference by smothering all the big issues of the day, the election becomes a contest of personalities. Johnson, who is no glamor boy, ought to think twice about what such a contest could do to his own candidacy. ROBERT G. SPIVACK The Case For The Big-Oil Tax Lyndon’s Effect On Liberalism