Covenanter Witness Vol. 53 - Rparchives.org

Current EventsByProf. William H. RussellTAX REVISIONOne of the most mportant measures passed at this Congress was the administration's tax revision bill. It is thefirst complete overhaulingof the tax laws in seventy-fiveyears, and includes nearly all the provisions asked by President Eisenhower. The new law will cut government revenues about one and a third billion dollars the first year, andmore in the future. Its most controversial item was a reduction in the taxation of income from stock dividends.However, the corporation income tax is continued at 52 percent for another year, canceling a scheduled dropto 47per cent. Corporations will be given more liberal tax exemptions to cover business losses. Individuals will be able todeduct medical expenses in excess of 3 per cent of their income, instead of the present 5 per cent, and the maximummedical deduction is doubled, to $10,000 per family. Up to$600 will be deductible for the expense of caring for children or other dependents while the taxpayer works. Children may also be counted as dependents if they are under19 or are in college, even though they earn more than $600a year. Retired persons can deduct up to 1200 of their retirement income. There are many other provisions, but theseare the ones affecting the largest amounts of revenue. Mostof the tax cuts are retroactive to January first.CAMPAIGN AMMUNITIONThe new tax bill will certainly receive full discussion inthe fall political campaigns. Republicans will take creditfor the fact that Congress this year has reduced taxes byseven and a half billions, the biggest cut of anyyear in ourhistory. Three billion came from a ten per cent personalincome tax cut, two billion from expiration of the corporation excess profits tax, and one bllion from excise tax reductions. Democrats charge, however, that the revision justpassed was designed mainly for the benefit of wealthypersons and large corporations. Republicans, on the otherhand, claim that it will stimulate the expansion of privatebusiness and thus provide more jobs without the perils ofsocialism. This represents a basic change in governmentpolicy since the days of the New Deal, when the government tried to aid business by putting more spending moneydirectly into the hands of consumers.AID FOR PRIVATE HOUSINGThe housing bill which finallypassed Congress represented only a part of what the President had requested,and was a bitter disappointment to the advocates ofgovernment-subsidized public housing. The Public HousingAdministration will be permitted to build 35,000 newunits but they will be limited to families evicted by slumclearanceprojects. The down payments on FHA-approvedhomes are cut from the present 15 or 20 per cent to aformula requiring 5 per cent on the first $9000 and 25 percent above that. A new $12,000 house will thus require adown payment of only $1200 instead of $2400. On olderhouses, the down payment is reduced from 20 to 10 percent. The repayment period for FHA-insured loans islengthened to 30 years, and the ceiling raised from $16,000to $20,000. There is also a provision to prevent profiteeringby builders, such as has been recentlyexposed in earlierFHA operations. The bill should provide quite a stimulus forAugust 11, 1954the building of medium and high-priced homes, but it offers little help to those who cannot afford to buy anykind of a house.DANGER ZONEAs peace came to war-weary Indochina, tension wasmounting between the U. S. and Red China. Both sidesissued bitter protests and maintained air patrols off thecoast after the shooting down of a British airliner. Similarattacks are likely to continue as longas the Communistsfeel that they can get away with them. Undersecretary ofState Bedell Smith has warned that any new Communistaggression in Southeast Asia is likely to bring on a generalwar. There have been numerous clashes between warships of Red and Nationalist China, and the Peiping government admits that it is seriously harrassed by Nationalistsabotage and espionage. Syngman Rhee, President of theRepublic of Korea, has visited the U. S. and urged us to helpfree Asia, by joining the Chinese Nationalists in an attackon the mainland. Rhee claimed that Nationalist China andSouth Korea could supply all the foot soldiers needed, ifwe would send in the U. S. Navy and Air Force.INDEPENDENCE AHEADAfter the achievement of an armistice in Indochina,Premier Mendes-France turned to the problem of France'stroubled North African protectorates. He went to Tunisiaand promised the Bey of Tunis internal sovereignty. TheFrench would turn over the domestic government to Tunisians, and keep control only of defense and foreign affairs.Tunisia would probably get a parliament, which it hasnever had. There would be special provisions to safeguardthe property rights of some 168,000 French colonials wholive in Tunisia. By these proposals the French premierundoubtedly hoped to stop the violent nationalist agitationwhich has taken many lives in recent months. The Tunisiansreceived the idea with joy, but the French colonials denounced it. In neighboring French Morocco, six people were killedin new riots by nationalists who want at least as muchindependence as the Tunisians. France would probablygive the two countries their freedom at once if it were notfor her large ecconomic and military investments there.DEEP WATERSIn spite of drought in parts of the U. S., this has alsobeen a season of floods. Several serious floods have occurred in this country, but they do not compare in damagewith some overseas. In central Europe, thousands have beenmade homeless in the upper Danube River valley. Thecrisis brought the unusual sight of American and RussianG.I.'s working side by side to bolster flood dikes. In Iran,at least three hundred persons were killed when floodsswept through fifteen villages. In China.the Peiping government sent more than a million troops and civilians into thevalleys of the Yangtze and Huai Rivers, where the heaviestrainfall in a hundred years has flooded thousands of acresof farmland. This will intensify the food shortage which hasalreadybecome a major problem for the Reds. India hasalso had extensive floods, and has resorted to airplanesto supply isolated areas with food.(Continued on page 88)83