THURSDAY, JANUARV i
PACK-SIXTEEN- HERALD AND NEWS. KLAMATH FALLS. OREGON ' i I
Here Are Highlights Of Eisenhower Message On 1955 Butf
WASHINGTON H Highlight, the development of a more abun-1 surplus was In sight for the fiscal , toward removing the most serious I may not be claimed as depend-i the problems of smai! and PJ I ' tax laW8 , . . within reason-1 government J
from the text of President Elsen-
bower's message to Congress on
the budget for fiscal 1965:
FIRST OOP BUDGET , .
This new budget Is the first pre
pared entirely by this administra
tion. It provides adequately, In my
judgment, for the national defense
and the international responsibili
ties of the nation responsibilities
which we must undertake as a
leader of the free world. On the
success of this leadership depends
our national security and prosper
. ty.
'NATIONAL DEFENSE
The recommended budget con
tinues the strengthening our mili
tary posture; our progress In the
development and production of
atomic weapons; the expansion of
our system of continental defense;
assistance in the ' development of
the military strength of friendly
nations; and programs for rapid
mobilization If an emergency
should arise. '
ATOMIC ADVANCES
Authority is recommended for
new and advanced work on the
peacetime uses of atomic energy
in the earnest hope that present
international relations can be im
proved and the wonders of nuclear
power can be turned gradually to
Highlights
InCongress
For Today:
WASHINGTON m President
Eisenhower sends Congress the
first Republican federal budget in
21 years.
Eisenhower already has said
that spending for the next fiscal
year starting July 1 would be cut
more than five billion dollars be
low current levels or to about 65
billion- dollars. He also Indicated
in his State of the Union speech
that the budget Will not be bal
anced. '
St. Lawrence The President
has one early session legislative
victory to his credit. The Senate
last night approved 61-33 U. S.
participation with Canada In con
structing the St. Lawrence seaway
a 27-foot-deep channel (that would
permit ocean vessels to reach
Great Lakes ports from the At
lantic. The House still must act.
Taxes The House Ways ' and
Means Committee continues work
on another Eisenhower proposal
an overhaul -of the nation's com
plex tax laws. The committee
agreed yesterday to eliminate in
come taxes on most workers sick
benefits paid directly by employ
ers. -House Approval seems as
sured for. two bills before the
House: .-
' 1. A measure to establish a sepw
arate Air force academy ana to
authorize 36 million dollars to-
start work on It. In debate yes
terday, only scattered opposition
appeared. '.
2. A compromise bill Increasing
1954 cotton planting allotments by
3,460,000 acres to a new total of
21,319,000 acres. A Senate-House
conference ' committee approved
the bill last night. ;
dant life for ourselves and all
mankind.
TAX REDUCTION
The reductions in expenditures
already. - accomplished, together
with those now proposed,. Justify
the tax reductions which took ef
fect Jan. 1 and the further tax re
visions I am recommending . . .
an amount approximately equal to
the savings is being returned to
the public in tax reductions and
tax revision. ,
BOLSTERING PROSPERITY
These lower taxes will encourage
continued high capital investment
and consumer purchases. Despite
the substantial loss of revenue
caused by .these reductions, we
have moved closer to a balanced
budget.
ESSENTIALS,
NOT "DESIRABLES"
In preparing this budget the ad
ministration has directed its at
tention to essential activities and
programs rather than to those
which some might consider desir
able and appropriate, at this time,
for the federal government to un
dertake, r
FUTURE BENEFITS
But as we continue to reduce
and eliminate the less desirable or
the unnecessary government ex
penditures, It will become possible
to turn to other purposes which
are the most desirable in terms of
their benefits to all of the people.
PARTNERSHIP,
NOT PATERNALISM
This budget marks the beginning
of a movement to shift to state and
local governments and to private
enterprise federal activities which
can be more appropriately and
more efficiently carried on in that
way ... In those cases where fed
eral participation is necessary, the
effort of this administration is to
develop partnerships rather than
an exclusive and often paternal
istic position. for the federal gov
ernment.
THE BUDGET
(IN BILLIONS OF DOLLARS)
(Truman's) 1954 1955
Receipts 68.0 67.6 62.7
Expenditures 77.9 70.9 65.6
Deficit 9.9 3.3 2.9
1954's RECORD -
The current estimates of the 1954
budget show that the requests for
new appropriations were reduced
about 12.5 billion dollars, new ob
ligatlonal authority was reduced
more than 11 billion dollars, and
expenditures were reduced 7 bil
lion dollars below the totals esti
mated in the 1954 budget document
of the previous administration.
1955's OUTLOOK
Similar reductions continue in
the budget recommended for the
fiscal year 1955. Recommended
new obligational authority is 4.4
billion dollars less than the cur
rent estimate for the fiscal year
1954, 15.5 billion dollars less than
recommended for that year In the
1954 (Truman) budget document,
and 23.9 billion dollars less than In
1963.
SAVINGS
Thus, new obligational authority
has been reduced 15.5 billion dol
lars and estimated expenditures
have been reduced 12.3 billion dol
lars since this administration took
office.
FIVE BILLION DOLLARS
without tax reductions, a budget
EXECUTION
SEOUL WJ-South Korean editor
Chung Kook Gun, 38, convicted as
a communist spy, will be executed
publicly by an Army firing squad
Saturday, the Defense Ministry an
nounced today, .-. ,
Chung, fo. ner . editor of the
newspaper Yun Hap shlnmoon,
was sentenced to death last month
by a military court, .
Symptoms of Distress Arising from
STOMACH ULCERS
due to EXCESS ACID
QUICK RELIEF OR NO COST
- Over five million packages of the Willard
TMatmbmt have been sold for relief of
( symptoms of distress arising from Stomach
and Duodenal Uleen due to Exceti Acid
Poor DlgMilon, Sour or Upset Stomach.
Oaulneti Heartburn. Slatplutrmt,
to., due to Kxcms Acid. Ask for ' Wlllard't
MttMgV which fully explains this remark
able homo treattnentfroo (
MoCONKEY DRUGS
PAT DRUO COMPANY
SUBURBAN DRUG COMPANY
WAGGONER DRUG COMPANY
WOOD'S DRUG STORE
Gilobrhl:
G1LCIIRI8T REX ALL STORE
Malta i
MALM DRUG COMPANY
COMING SAT., JAN. 23rd TO THE
Broadway Hall
MAUN
"THE BILLY BARTON SHOW"
STARRING
Billy Barton
World famous singing (tor end
America's lop . long writer.
Writer ef such greet hits at
A Deer John Utter
Forgive Me John A Deer
John end Martha letter 1
Love Yeu - A Hiartbreok
Age end many mora grant Na
tional hits, New recording for
Abbott records. BILLY BARTON
ALSO
WANDA WAYNE
America's most: beautiful and western singer now heard
on King records ...
AND FEATURING SINGING STAR
TEX DOYLE and JOHNNY GRIMES
... and his MELODY MOUNTAIN BOYS, his great dance
and show band. Stars of Abbott records. See and hear
this great (how with the country's top entertainers.
DANCING 10 till 2
ij ADMISSION 1.50 (rax inc..) jj
year 1963. Together these tax re
ductions will total nearly S billion
dollars'.
DEFICIT
Ve will still have a budgetary
deficit of slightly less than 3 bil
lion dollars for the fiscal year 1955,
as now estimated. But we will con
tinue determined efforts for econo
my to reduce that deficit during
the 1955 fiscal year.
CASH SURPLUS
Furthermore, despite the loss ol
cash revenue from the tax reduc
tions and revisions, the total cash
transactions of the government
with the public are now estimated
to show a small cash surplus for
the fiscal year 1965. (The cash
accounts consider social security
contributions as government re
ceipts; the conventional budget
does not.)
DEFENSE COSTS
Expenditures for major national
security programs for the mili
tary functions of the Department
of Defense, the mutual military
program, atomic ' energy, and
stockpiling of strategic materials
dominate the budget and are es
timated at 4.9 billion dollars In
the fiscal year 1955. This com
pares with a presently estimated
48.7 billion dolars in 1951 and 50.3
billion dollars in 1953.
MORE DEFENSE, , LESS COST
Proposed reductions In major
national security expenditures in
1955 represent the largest single
element of reduction from the cur
rent year's level of expenditures.
I emphasize, however,- that these
savings result from revisions in
programs, from shifts in emphasis,
from better balanced procure
ment, and from improved man
agement and operations. ' Our se
curity is being strengthened not
weakened,
ATOM AND AIR POWER ,.
Proposed 1955 expenditures for
the' Atomic Energy Commission
and for the mutual military pro
gram will be at the highest levels
since the initiation of the two pro
grams . . . Expenditures on be
half of our alrpower will be the
largest since world War n. Alio-
cations of expenditures for our
continental defense- program' will
be greater than in any previous
year. ' "
TAX PROGRAM - .
I am anxious to have taxes re
duced as fast as that can be done
without building up Inflationary
deficits . . . The objective will be
to return to the people, to spend
for themselves and in their own
way, the largest possible share of
the money that the government
has been spending for them.
STARTING POINT
The start toward tax reductions
is justified only because of sue-'
cess in reducing expenditures and
Improving the budgetary outlook
These proposals are directed
toward removing the most serious
tax Hardships and tax complica
tions, and reducing the tax bar
riers to continued economic
growth.
STOPPING POINT
I do not believe that the bud
getary situation will permit furth
er reductions of taxes at this time
... Hence, I repeat my recom
mendations of last May that the
reductions in the general corporate
Income tax be deferred for one
year; that the excise tax rates,
scheduled to hi reduced on April
1, Including those on liquor, tobac
co, automobiles, and gasoline, be
continued at present rates; and
that any adjustments in the other
excise taxes be such as to main
tain the total yield which we are
now receiving from this source.
NATIONAL DEBT
Nearly three-quarters of the debt
we Inherited a year ago matures
within less than five years or is
redeemable at the holder's option.
Too large a proportion is in the
hands of banks. These policies con
tributed to cheapening the dollar.
DEBT LIMIT
The national debt is now close to
the legal limit of 275 billion dollars
... In the second half of the
calendar year, when tax receipts
are seasonally low, there will be
no way of operating within the
present debt limit. For these reasons,-
I renew my -request to the
Congress' to raise the debt limit.
PART II
TAX PROPOSALS '. '
Our whole -system, - of -taxation
needs revision and overhauling. It
has grown haphazardly over many
years. The tax system should be
completely revised. ,
THE OBJECTIVES
Revision of the tax system is
needed to make tax burdens fairer
for millions of individual taxpay
ers.' . . It is needed to restore
normal, incentives for sustained
production and economic growth.
TAX REVISION
I believe that this proposed tax
revision is the next important step
we should take In easing our tax
burdens. After it is completed
further reductions in expenditures
can be applied to our two object
ives of balancing the budget and
reducing tax ratest . -
1. Children Earning Over $600 -,
I recommend that a parent
should be permitted to continue to
claim a child as? a dependent -regardless
of the child's earnings if
he is under 18 or away from home
at school, v.
2. Heads Of Families
I recommend that widows and
Widowers with dependent children
be allowed to split their Income as
is now done by married couples.
This same . .tax treatment should
be authorized for single people
supporting dependent parents.
3. Foster Children .
At present, foster children and
children in process of adoption
may not be claimed as depend
ents. I recommend that such child
ren be allowed as dependents.
4. Expenses of Child Care
Some tax allowance can properly
be given for actual costs of pro
viding care for the small children
of widows or widowers who have
to work outside the home. The
same tax privilige should be given
to working mothers who, because
their husbands are Incapacitated,,
provide the principal support of
their families.'
5. Medical Expenses
I recommend that a tax allow
ance be given for medical expen
ses in excess of three per cent of
income instead of five per cnt as
at present. I recommend further
that the present ceiling of $1, 250
for a' single person with a maxi
mum celling of $5,000 for a family
should be doubled.
6. Sick Benefits
Insurance and other plans
adopted by employers to protect
their employes against the. risks
of sickness should be encouraged
by removing the present uncer
tainties in the tax law.
7. Pension Plans
The condition for qualification
for special tax treatment of em
ployers' pension plans are too in
volved.' Such plans are desirable
I recommend that the rules be
simplified and that greater .discre
tion be given in establishing plans
for different groups of employees.
8. Taxation of Annuities'
. I recommend that tax treatment
of annuities be determined on-the
basis of the life expectancy of the
person receiving It. Tills will per
mit the hundreds of thousands of
people who buy annuities to recov
er their capital free of tax over
their life expectancies.
9. Double Tax on Dividends
- At present, business income is
taxed to both the corporation as it
is earned and to the millions of
stockholders as It' is paid out in
dividends. The double taxation is
bad ... I recommend that a start
be made in the removal of this
double taxation by allowing stock
holders a credit against their own
income taxes as a partial offset
for the corporate tax previously
paid.
10. Estimated Returns
The burden on those required to
file estimated tax returns should
be reduced by increasing the num
ber of optional ways in which an
Individual can estimate his tax
... I recommend also that the
penalties resulting from underesti
mates be simplified.
11. Filing . Date
To reduce the burdens of pre
paring and filing returns . in the
early months of the year, I rec
ommend that the March 15 filing
date for Individuals be changed to
AprU 15.
12. - Business Taxes
Particular attention should be
given to the revision of the law to
Business concerns. A l1"0"
of the tax treatment of deprecia
tion would nave lar-reae
x sii hiicinRss and be es-
pecially helpful in the eIansion
of small Business -
- individual proprietor-
china rtr norooratlons . . . Faster
depreciation, it should be noted,
...i, shift the tax deduc
tions from later to earlier years. It
will not increase total deductions.
13. Research and Development
I recommend that all companies
be given an option to capitalize or
to write off currently their expen
ses arising from research and
development work.
14. Accumulated Earnings
Th nenaltv tax on excessive ac
cumulations of corporate earnings
. . Is necessary to prevent avum
ance of individual taxes by stock
holder's, but I recommend that the
ho nhomrpH to make the gov
ernment assume the burden of
proof that a retention of earnings
is unreasonaoie.
1!!. lnrtnernhlDS
The tax law applicable to part
nerships is complex and uncertain.
I recommend that it be simplified
I 1 .Infinilo
UIJU 1IINUC UC"U"i
iri. nntlonal Tax
. I recommend that corporations
with a small number of active
stockholders be given the option tc
be taxed as partnerships and that
certain partnerships be given the
17. Cornorate Reorganization
. The tax law applicable to reor
ganizations and recapitalizations
of corporations . . . should be sim
plified ... I recommend that the
tax law " permit tax-free rear
rangements of stockholders' inter
ests in corporations, so ioiib n
corporate earnings are wiuiarawu.
18. Loss Carryback
At m-esent. losses may be car-
i-iMi bar and offset against prior
earnings for one year and carried
forward to be offset against future
earnings for five years. I recom
mend that the carryoack De ex
tended to two years.
M. Soil Conservation
At present, only limited and un
certain tax deductions are allowed
for soil conservation expenses on
farms. I recommend that such de
ductions be allowed up to 25 per
cent of the farmer's gross Income.
20. Accounting
Tav accountant should be
brought more nearly in line with
accepted business accounting oy
allowing prepaid income to be
taxed as it is earned rather than
as it is received, and by allowing
reserves to be established for
known future expenses,
21. Corporate Taxes
I recommend that the law be
tightened to remove abuses from
the use of multiple corporations in
a single enterprise. I also recom
mend that the penalty tax on con
solidated returns and inter-cor
porate dividends be removed over
a 3-year periou.
9th and Pine
Phone 3188
s
DO IT YOURSELF
REMODEL YOUR KITCHEN WITH WARDS UNFINISHED FIR FRONT- CABINETS
It's easy to design your own distinctive kitchen with
Wards modern cabinets.'. Fully assembled ready to be
painted or stained In any manner desired. These cabi
nets are Individual units that can be arranged In groups
or singly as your space demands. You can buy a few of
them now, and add to them later on as your budget per
mits. Built to last, with duilproof doors and drawer
fronts. If you need help, we'll be glad to assist you in
planning your kitchen to suit your individual tastes and
needs. Bring a sketch of your kitchen floor plan with you.
Here Are A Few Of Qui CkdflnetlStyleg- OtHer Sizes Available
WW
m
1 Uu ' 1 pmt Umt ' 4 Drivtf 1 SMf, 1 Pimr t tar, ! Brmr 1 Dmi, I Dravtr sink Ciblntl
Hi". . . M.N Jti)"... .- tWtiSl'.H.W -13ill"...e0. - 15JS". ..Oe.OO )!-..,, J0i)J"...0OjO . MiU...H.N
COLORFUL PLASTIC TILE, CUSTOM DINETTE BOOTHS COUNTERTOR MATERIALS ALSO AVAILABLE -
hi limits should encourage pri.
should supplant government eco
nomic aid. Business Income from
'oreign subsidiaries . . . should be
taxes at a rate 14 percentage
points lower than the Tegular cor
porate rate.
2S. Payment Dates
The irregularity of tax receipts
increases the problems in maqag.
lnir the public debt ... I recom
mend that, beginning in the fall of
1055 a start be made in smoothing
out 'corporation income tax pay
ments by requiring advance pay
ments in September and Decem
ber before the end of the taxable
year. Each of these payments
should be made at 5 per cent of
the amount due for this entire
year in 1955, rising to 25 per cent
each in 1059 and later ye!Lts-.
24. Administration of Tax Law
I recommend that the parts of
the 'aw covering assessments, col
lections, interest and penalties, the
statute of limitations, and other
administrative provisions be sim
plified and brought together in one
place. . . The regulations and ad
ministration of the tax laws are
being tightened to prevent abuses
by which a small minority of tax
payers avoid their fair share of
taxes by misuse of expense ac
counts and other improper prac
tlcs, 25, General Simplification
The entire internal revenue code
needs rewriting and reorganiza
tion. Jointly, the Treasury De
partment and the staff of the con
gressional committees, have de
veloped many recommendations
for changes other than those which
I have described here.
PROBLEMS AHEAD ,
There still are heavy national
security requirements. Substantial
expenditures are by law relatively
nondlscretionary. The far-reaching
activities of the federal govern
ment are extremely complex.
PROGRESS TO DATE
Despite these Inherent' difficul
tly wa bflve made great prog
ress. Federal expenditures have
been cut substantially, tax reduc
tions have been made justifiable,
and the budgetary deficit has been
sharply reduced. We have, further
more, made appropriate provis
ion for our national security and
for our international obligations
md we have been able to propose
certain increases in federal ex
penditures to advance our domes
tic well-being and to foster eco
nomic growth.
rnvri.llfsmN
I firmly believe, therefore, that
protect our way 4
also strengthen L JN
and enhance Urn
our people.
Pltht n fj
. erajihmgO
5 Elizalfi
Tajlot
At 16, she was tlw t..
of millions anJ i.i n
acclaimed one of UhtJ
great beauties-bjinj
would ask her fc, . J
and she sobbed W U
wtunauYoiaerttetJ
Here, Elizabeth TijU
mother, who onu ,J
about her "fiHrnyJajj
DaDy.leuatlietnieiln,
the priceher dandi-J
for being too beautifuld
the February Lain' jj
journal, on sale
tU;
RMUARYUDffl' J
A CU8TI5 MA8AIWI
9th and Pine
Phone 3188
BIS - " -' ' ,,iJ4iJiiiw,,r
Home-Furnishings
SALE
STEEL VENETIAN BLINDS REDUCED
14 Sizes 1
2:77
Each
A money-saving value-Steel Blinds In standard wtndo
sires, all at the same low sale price. Choose fro"
i 11.-11- .u iii m ! in. For so WW f
&vj .u iu in. wiuf wii wt , o
can enjoy all the beauty and convenience
of blinds
flexible steel slats for cleaning ease, off-white em
finish and smooth-action mechanism.
lone1
REG. 1.98 DRAPERY FABRICS now
. ,