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TELEPHONES WESTERN CENTRAL TAX 6-0336 S O U T H D E A R B O R N S T R E E T C H I C A G O E X E C U T I V E CENTRAL 6-0245 COUNCIL, A Not for Profit 3 8 - FIRST 3, INC. Corporation N A T I O N A L B A N K B U I L D I N G ILLINOIS October 24f 1950 C O M M I T T E E F . E. P A C K A R D EXEC. VICE P R E S I D E N T GEORGE TAFT TREASURER AND ASST. SEC'Y. B. P. M O E SECRETARY AND ASST. TREASURER Dear Mr. Eccles: B O A R D W. W. O F D I R E C T O R S KIMBALL PRESIDENT KIMBALL PIANO COMPANY C H A R L E S J. L Y N N VICE PRESIDENT This is not a request for funds. Assuming you believe in attaining economy in Federal spending, we solicit your advice and help jLn bringing it to fruition by adding your State to the twenty shown, on the map* ELI LILLY A N D COMPANY JAMES D. M O O N E Y CHAIRMAN OF BOARD WILLIS OVERLAND COMPANY C. R. SHEAFFER PRESIDENT W . A. S H E A F F E R P E N C O . H. H. SLINGERLAND MANAGER The WESTERN TAX COUNCIL, INC., is a non-partisan and non-profit organization, dedicated to repealing the 16th Amendment to our Constitution, which permits unlimited taxation. In its place, the Council offers a substitute amendment (authorized under Article V) limiting all Federal taxes to 25J6 of income, estate and gift and cutting all lesser income tazes in proportion. S L I N G E R L A N D D R U M ft B A N J O C O . JOHN R. T H O M P S O N . JR. PRESIDENT J O H N R. T H O M P S O N A N D C O . HARVEY B. GREENE A S S I S T A N T TO P R E S I D E N T NATIONAL AUTOMOTIVE FIBRES HARRY W. OLSEN We would appreciate your contacting and convincing your State legislators that great benefits will acorue to their constituents and their State. Tax limitation is essential to National, State, County, City and Village economy. While the destruction of our Government by violent means will never happen, its destruction by unlimited taxation is well on its way. N E W YORK L I F E I N S U R A N C E CO. H E N R Y C. INT'L. BURGER REPRESENTATIVE INT L. B R O T H . O F T E A M S T E R S A. F . O F L . A. A. IMBERMAN PRESIDENT I M B E R M A N A N D DE F O R E S T M E R T O N R. F I S H MANAGING DIRECTOR INSURED INVESTMENTS ASSOC. Obviously, a limit on all Federal taxes in peacetime will leave larger sums of money in every State. All States will then be doing their own financing out of their own funds instead of getting back part of their own funds in Aids and Grants. States can then furnish the necessary funds to run the Federal Government. The enclosed chart and data show how our budget was balanced each year from 1920 through 1930 and a large surplus acquired out of which $101000,000• 000 of the debt was paid. F . L. DAILY. ATTORNEY D A I L Y . D I N E S , R O S S ft O ' K E E F E Should you find you can assist us in this movement in your State we shall be pleased to have you advise us. If you would like additional maps and other literature, we shall be glad to send them to you. Thanking you, we are .ly yours, A Cordially End. R E C O R D O F V O T E ON PROPOSED AMENDMENT LIMITING FEDERAL TAXES ON INCOME, ESTATE & GIFTS TO 25% H O W I T IS D O N E Passage by 32 states compels congress to submit. LEGEND PASSED IN BOTH PASSED IN O N E HOUSES T h e n ratification by 36 states makes it a part of the constitution. HOUSE Resolution on reverse side. 1950 STATE OF WISCONSIN several states, and without regard to any census or enumeration; Provided that in no case shall the maximum rate of tax exceed 25 per cent. [Jt. Res. No. .>5, A.] 7f J5 No. 1943. A JOINT RESOLUTION Memorializing Congress to call a convention for the purpose of considering an amendment to the Constitution of the United States relative to taxes on incomes, inheritances and gifts. "Section 3. The maximum rate of any tax, duty, or excise which congress "Section C. Section 3 shall take effect at midnight on the last day of the may lay and collect with respect to the devolution or transfer of property, or sixth month following the ratification of this article. Nothing contained in this any interest therein, upon or in contemplation of or intended to take effect in article shall affect the power of the United States to collect any tax on any possession or enjoyment at or after death, or by way of gift, shall in no case devolution or transfer occurring prior to the taking effect of section 3, laid in exceed 25 per cent. accordance with the terms of any law then in effect." And be it further "Section 4. The limitations upon the rates of said taxes contained in sec- Resolved f That the Congress of the United States be, and it hereby is, re- tions 2 and 3 shall, however, be subject to the qualification that in the event quested to provide as the mode of ratification that said amendment shall be of a war in which the United States is engaged creating a grave national emer- valid to all intents and purposes, as part of the constitution of the United States, gency requiring such action to avoid national disaster, the congress by a when ratified by the legislatures of three-fourths of the several states; and be it vote of three-fourths of each house may for a period not exceeding one year further increase beyond the limits above prescribed the maximum rate of any such tax Resolved, That a duly attested copy of this resolution be immediately That this legislature upon income subsequently accruing or received or with respect to subsequent transmitted to the secretary of the senate of the United States, the clerk of the respectively petitions the Congress of the United States to call a convention devolutions or transfers of property, with like power, while the United States house of representatives of the United States and to each member of the Con- for the purpose of proposing the following article as an amendment to the con- is actively engaged in such war, to repeat such action as often as such emergency gress from this state. stitution of the United States. may require. Resolved by the assembly, the senate concurring, "ARTICLE "Section 5. Sections 1 and 2 shall take effect at midnight on the 31st CONRAD SHEARER VERNON W. THOMSON PRESIDENT PRO TEMPORE OF THE SENATE. SPEAKER OF THE ASSEMBLY. "Section 1. The sixteenth article of amendment to the constitution of the United States is hereby repealed. "Section 2. The congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the day of December following the ratification of this article. Nothing contained in this article shall affect the power of the United States after said date to col- LAWRENCE R . LARSEN lect any tax on incomes for any period ending on or prior to said 31st day of CHIEF CLERK OF THE SENATE. December laid in accordance with the terms of any law then in effect. ARTHUR L . MAY CHIEF CLERK OF THE ASSEMBLY. The colored chart on the opposite side of this p a g e shows the concurrence of lower tax rates and the excess of Federal revenue over expenditures from 1 9 2 0 through 1 9 3 0 . Almost instant response was made to the repealing of the excess profits tax in 1 9 4 5 , by a surplus of $ 7 5 4 million in 1 9 4 7 and $ 8 billion 4 1 9 million in 1948. The reason for this seeming p a r a d o x of increased revenue with lowered tax rates is the more rapid flow of money, i.e., more people have the same dollar taxed during the same tax period. O f greater importance during this period is the fact, shown by the chart below, that the small taxpayer did not come into the taxpaying group until his income reached a much higher figure. W h e n a higher figure was reached during this period the tax was at progressively lower tax rates. Married taxpayers' exemptions went from $ 2 , 0 0 0 to $3,500. In a sound, healthy economy where capital is not depleted by excessive taxation, balancing the budget through lower taxes for all classes is a demonstrable fact. As further proof C a n a d a , by lowering taxes, has balanced her budget for the past four years and has paid off a substantial portion of her debt. E X E M P T I O N S FOR M A R R I E D TAXPAYERS A N D FIRST NET I N C O M E SUBJECT TO T A X 1913-1948 1949-1950 ESTIMATED Note: Time scale corresponds with that used on graph on reverse side. 9% $4,000 7% $3,000 1 M l< i i 1i 11 1l l1 1 1 1 1 1 5% $2,000 3% $1,000 ! i i * •j r i i i i i i I L. —i i- - - - - r i i I. r i i i I . L, rJ 1% \ 0 1915 1920 1925 1930 1935 ^MMMExemplion—Married taxpayer m. _ —First tax rate on Net Income subject to tax. Source: Revenue Acts. WESTERN TAX COUNCIL, INC. CHICAGO, ILLINOIS 1,950 1940 1945 1950 UNITED FEDERAL DEBT, REVENUES Fiscal Y e a r s BILLIONS ?00 00 80 OF STATES AND EXPENDITURES 1913-1951 DOLLARS LOGARITHMIC SCALE P r i o r t o 1 9 1 7 the F e d e r a l d e b t w a s l e s s t h a n 1 % b i l l i o n d o l l a r s a n d a n n u a l e x p e n d i t u r e s a n d r e v e n u e s w e r e both u n d e r 1 billion dollars. B u d g e t a r y deficits (red) occur from 1 9 1 7 t h r o u g h 1 9 1 9 , 1 9 3 1 t h r o u g h 1 9 4 6 a n d 1 9 4 9 through 1 9 5 1 (estimated). B u d g e t a r y surpluses (green) prevail f r o m 1 9 2 0 t h r o u g h 1 9 3 0 a n d in 1 9 4 7 a n d 1 9 4 8 . D u r i n g the p e r i o d o f s u s t a i n e d s u r p l u s e s the m a x i m u m i n d i v i d u a l s u r t a x r a t e s w e r e p r o g r e s s i v e l y l o w e r e d f r o m 6 7 p e r c e n t to 2 0 p e r c e n t . A l s o d u r i n g this p e r i o d the F e d e r a l d e b t w a s s u c c e s s i v e l y r e d u c e d f r o m 2 5 . 4 b i l l i o n d o l l a r s to 1 6 . 2 b i l l i o n d o l l a r s . This is the o n l y p e r i o d since 1 9 1 4 in w h i c h the F e d e r a l d e b t h a s b e e n r e d u c e d until t h e a l l - t i m e h i g h o f 2 6 9 . 4 b i l l i o n d o l l a r s in 1 9 4 6 w a s r e a c h e d . 60 S o u r c e - U. S . T r e a s u r y D e p t . a n d R e v e n u e A c t s . 1950-1951 estimated 40 20 10 8 6 4 2 Deficit, when expenditures exceed revenues, shown in red. 1 Surplus, when revenues exceed expenditures, shown in green. .5 1915 1920 MAXIMUM PERCENT 1915 1925 1920 1925 1930 1935 INDIVIDUAL 1930 SURTAX 1940 RATES 1935 W E S T E R N T A X COUNCIL, CHICAGO, ILLINOIS 1950 1945 1940 INC. 1950 ARITHMETIC SCALE 1945 1950 December 1, 1950 Mr* F. E* Packard, Executive Vice President, Western Tax Council, Inc«, 38 South Dearborn Street, Chicago 3f Illinois. Dear Mr* Packard: lour cii*culax* letter of October 24, addressed to iae, was received in my office while I was on an extended stay in the Vest* The amendment, which your Association proposes and, for which you have sought cry support, seems to me to be very uneconomic and unsound for the reason that you have great debtor states and great creditor states as related to the economy of the country as a whole, and Federal taxation expenditure is tne only way you can get anything like equitable distribution of the national income. I made a speech on October 14, 19-41, before the Hational Tax Association in Minneapolis, which points out the overall problem of economic stability* X am enclosing a copy of that statement which will give you soma insight into the reason for my objection to your proposed amendment* Sincerely yours, M* S* Scales• Enclosure. VEldla
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