Dwight Eisenhower on Tax Reform

	Dwight Eisenhower on Tax Reform

High taxes take too much money out of the economy

There were two major concerns regarding this high level of governmental expenditures. One was the possibility that high taxes would take too much money out of the economy--money needed to make jobs as time went on. Increasingly high taxes could take money that might otherwise go into new plants, new products, new research. The other danger in high expenditures, as we saw it, was the possibility of increased inflation resulting from a long series of deficits. It was a point I had stressed--together with a plea for businesses and labor restraint in price and wage increases--in my State of the Union message:

"This danger requires a firm resolution that the Federal Government shall utilize only a prudent share of the Nation's recourses, that it shall live within its means, carefully measuring against need alternative proposals for expenditures."

Source: Waging Peace, by Pres. Dwight Eisenhower, p.128-129 , Jan 1, 1965

Reduce taxes because we reduced spending

The new budget provides for a lower level of taxation than has prevailed in preceding years: 6 days ago individual income taxes were reduced and the excess profits tax expired. These tax reductions are justified only because of the substantial reductions we already have made and are making in governmental expenditures. As additional reductions in expenditures are brought gradually but surely into sight, further reductions in taxes can and will be made. When budget savings and sound governmental financing are assured, tax burdens should be reduced so that taxpayers may spend their own money in their own way.

While we are moving toward lower levels of taxation we must thoroughly revise our whole tax system. The groundwork for this revision has already been laid by Congress. We should now remove the more glaring tax inequities, particularly on small taxpayers; reduce restraints on the growth of small business; and make other changes that will encourage initiative, enterprise and production.

Source: Pres. Eisenhower's 1954 State of the Union message , Jan 7, 1954

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Page last updated: Feb 22, 2022