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Mr. Nixon. As your income rises, your income tax rises and that certainly takes care of the changing income. Obviously there are many other economic developments since 1939. I only now hope to make one point, and that is what has happened where you start the tax in terms of real income, subject to the limitations you mentioned and to other developments in the economy. This chart shows the great difference between today's exemptions in real terms and the exemptions of 1939. It compounds the changes made by Congress and the changes made by changing the value of the dollar. We think it shows a startling change as far as the actual impact is concerned.
Mr. Mason. This chart, as I read it, simply shows the varying purchasing power of the dollar, and evidently if the man had three times as many dollars now as he had in 1939, he would buy, we will say, the same amount of goods because it would take $3 where it used to take $1 to buy.
Mr. Nixon. Subject, of course, to the changes in the tax burden. I have given a report already on what today's income is.
Now I have here a second chart that I would like to have you address your attention to. This chart shows you the comparison between the gross exemption and the budget requirements for a minimum adequacy budget as set forth by the Federal Government, the budget that I discussed before.
For a single person you can see the discrepancy between the present exemption of $675 in gross exemption and the $1,630 that the Government says this man requires for health and efficiency, the difference between $1,325 for a married couple and the $2,330 that our Government says is required for a minimum adequacy budget, and the difference for a family of four between the Government's budget requirement of $3,530 and the gross exemption of $2,675.
I would like to make just one other point before we come to the question of our recommendations. The question is: How much taxes does a worker pay?
I made reference to a sample case. I would like to make another point with you gentlemen and that is contained in the material on
Mr. HARRISON. Were these records prepared at your union headquarters?
Mr. Nixon. Yes, sir.
Mr. Harrison. Í think you and I are fellow Virginians. You live in Virginia ?
Mr. Nixon. Arlington.
Mr. HARRISON. You appear here at the direction of your union; is that correct?
Mr. Nixon. Yes, sir.
Mr. HARRISON. Your purpose in appearing is to ask this committee to frame legislation in the interest of better government in this country; is that correct?
Mr. NIXON. Yes, sir. Mr. HARRISON. You are entirely actuated by the welfare of this country and not by any other country; is that correct?
Mr. Nixon. I do not know just what the implication of that is, Mr. Harrison, but the answer is unqualifiedly “yes.
Mr. HARRISON. You do not know the implication of the question?
Mr. HARRISON. Have you ever been a member of the Communist Party?
Mr. Nixon. I am not going to go into a whole train of questions of that sort.
Mr. HARRISON. Have you ever been a member of the Communist Party?
Mr. Nixon. I have answered the question that I am not.
Mr. Harrison. Do you refuse to answer whether or not you have been a member of the Communist Party?
Mr. Nixon. I think my answer is adequate, Mr. Harrison.
Mr. HARRISON. Are you or have you ever been a member of the Communist Party?
Mr. Nixon. I have told you I am not.
Mr. Nixon. I am not going to go into a train of discsusion with you on that, Mr. Harrison.
Mr. HARRISON. Do you refuse to answer whether or not you have ever been a member of the Communist Party?
Mr. Nixon. I told you I am not, and I am not going to go into a whole train of discussion.
Mr. HARRISON. I have asked you the single question. I am not now discussing anything.
Mr. EBERHARTER. Mr. Chairman, I would like to interject this thought. Since I have been a member of this committee for 7 years we have never brought in extraneous matter like this. I do not think it is proper for us to start to do it now. In other words. I do not think it is relevant to the issue before us. It confuses the issue. It is entirely immaterial. The gentleman has appeared here representing the views of a large segment of the American working public and his political views or connections are of no concern to this committee with respect to the issue we are having a hearing on now. I do not think I could approve of the Committee on Ways and Means starting on this line of questioning now. Representatives of business have appeared here and we certainly have not gone into their personal political beliefs, whether they are Republicans, Democrats, or anything else.
The CHAIRMAN. The chairman has never attempted to decide what questions members of the committee should ask. They may ask whatever questions they desire.
Mr. HARRISON. Mr. Chairman, my purpose in asking that question is that the witness appears here for the purpose of influencing legislation. He appears here voluntarily and says that he represents a large segment of American labor. Now if that is true, that is one thing. If he is here representing the Communist Party, that is another thing. I think it is a very relevant thing.
I am perfectly willing to submit the issue to the committee as to whether or not this line of questioning should be continued. I am perfectly agreeable to do that.
Mr. NIXON. Mr. Harrison, I am not here representing anyone except 300,000 workers in 1,000 plants in the radio and electrical machine industry who democratically run their union, who democratically elect their officers. I have been coming before this committee for 10 years. I am no stranger here. You may disagree with what I am saying here a great deal. I think you must agree I am trying to make a serious factual presentation of the views of my 300,000 members on this important question. I just cannot permit you to turn me from the discussion that I have here, from the evidence that I have here, and the case that I was sent here to make by my people. My membership are a loyal group, as loyal as anybody else, and so
Mr. HARRISON. Is it not a fact that your union has been excluded from the CIO because of the fact that it is Communist dominated?
Mr. Nixon. I would not put our relationship with the CIO in those terms, Mr. Harrison.
Mr. Harrison. Were you excluded from the CIO? Mr. Nixon. Well, that is a difficult question. We got out of the CIO.
Mr. HARRISON. Was there difficulty over whether or not your union was a Communist-dominated union?
Mr. Nixon. Yes, we have had that difficulty since we started in 1945.
Mr. Harrison. Who is president of your union?
Mr. Harrison. Do you know whether he is a member of the Communist party?
Mr. Nixon. I am finished on this line of questioning.
Mr. Nixon. The answer to that is no, but I am not going to answer any more questions along this line.
Mr. HARRISON. Who is the secretary and treasurer?
Mr. Nixon. Mr. Chairman, I must request you to ask that we continue the discussion on the tax question before this committee. Permit me to finish my statement and to have questions and discussions on that subject.
The CHAIRMAN. The chairman is a little bit confused by your willingness to answer to one of the questions and your refusal to answer to the other. You did answer the question as to whether or not you are a member of the Communist Party. Then you refused to answer the question whether you ever had been a member of the Communist Party. The chairman is surprised that you answered one question and not the other.
Mr. JENKINS. I want to make this suggestion, Mr. Chairman. If I had enough power on this committee I would ask this man to step aside and invite his organization to send somebody here to testify who can answer the questions that Mr. Harrison has asked
him, and if he is a Communist or ever has been we do not want to hear him. That is my viewpoint.
Mr. Nixon. Mr. Chairman, I answered the first question. The reason I did not want to go on to answer other questions is because it is clear that there was going to be a train of questions and I do not propose to go down that road.
Mr. SIMPSON. I would like to ask the gentleman whether he was elected by these 300,000 workers to appear here? Mr. Nixon. No; I am a staff member. I am not one of the elected
I officers. Mr. Simpson. By whom were you hired?
Mr. Nixon. I am hired by the general officers and the general executive board. Mr. SIMPSON. Would you work for a Communist? Mr. Nixon. Would I work for a Communist? Mr. SIMPSON. Would you work for a Communist? Did you accept employment from a Communist? Mr. Nixon. Did I accept employment? Mr. SIMPSON. Yes. Mr. Nixon. I accepted employment from the union, sir. employed by the union.
Mr. Simpson. You told me you were hired by these general officers. Sow I ask you whether you, as an American citizen, would work for a Communist?
Mr. Nixon. If one of the officers of our union were a Communist, I would not stop working for the union on that basis. As a matter of fact, it just happens, Mr. Simpson, that every one of the officers of our union has signed the non-Communist affidavit under the TaftHartley law, section 9 (h).
Mr. Simpson. You did not state a moment ago whether Mr. Fitzgerald was a Communist or not. You refused to anwser the question about Mr. Julius Emspak. I asked you whether you would work for a Communist or whether you would investigate to make sure you were not working for a Communist, just as I would if I were asked to work for someone.
Mr. Nixon. I think I answered that question. Mr. Simpson. Will you answer it again? Mr. Nixon. If a union wanted to hire me, which I knew had Communist officers, I would not necessarily turn down the job for
Vr. Simpson. You would not turn a job down if you knew you were working for a Communist?
Mr. HARRISON. You would not tell the committee you have never worked for a Communist, would you?
Mr. Nixon. I am just not going to go on with this line of questioning. If you want to hear what I have to say about taxes, I shall be glad to continue. I must have been doing a very effective job.
Mr. HARRISON. I will acknowledge that.
Mr. HARRISON. You are doing a very effective job for the people by whom you are employed.
Mr. Chairman, I do not desire over the objection of the members of the committee to pursue the topic. I think we have pursued it
enough to show to the satisfaction of everybody here who the gentleman does represent.
The CHAIRMAN. Of course each member can draw his own conclusion about that.
Are you through, Mr. Harrison?
Mr. Curtis. Mr. Chairman, the witness says he has some more to present, but in view of the schedule that this committee has, unless he wants to cooperate and answer Mr. Harrison's second question, I think the witness ought to step aside so that we may go on to someone who is willing to respond to the committee's questioning.
The CHAIRMAN. If you wish to testify further, you may go ahead.
Mr. Nixon. I was just about to make the additional point of the impact of the total tax burden. I was referring you to page 14 of my statement, which includes a table of the percentage burden of taxes on various income groups, Federal, State, and local taxes, direct and indirect. It is a startling thing because it shows that under $1,000 the income group paid in 1948, 23.6 percent of its income in taxes, State, Federal, local, direct and indirect; $1,000 to $2,000 it is 20.3; $2,000 to $3,000, 21.6; and so on down the table. And only above $7,500 does the impact of total taxes begin to be progressive. This situation underlines the basic point I want to make, that no taxes should be levied on the American families whose incomes are not large enough to maintain the living standards at minimum adequacy levels of health and efficiency.
Now we have three or four proposals which we would like to present to you.
The first one is that the individual income tax exemptions be increased to allow, free of tax, enough income for a minimum adequate living standard.
The Treasury Department's study on this subject made a couple of interesting comments and I refer you to them. They said this:
For the long run it is regarded as essential to exempt amounts required to maintain the individual and his family in health and efficiency. Apart from humanitarian aspects, this view is based on certain practical social and economic considerations. Thus, it is held that taxing substandard living will result in lowered economic vitality in the community, lower revenues, and possibly result in higher Government expenditures for social repairs.
Further on it makes this important statement:
In this view, ability to pay does not commence until a point is reached in the income scale where the minimum means of life have been obtained.
The Treasury report anticipated the charge that such exemption increasing would put more taxes on the rich and destroy incentive, and they made this comment:
The sacrifice involved in going without certain necessities is not susceptible of measurement or comparison.
In other words, the point the Treasury was making is that the sacrifice involved in cutting the family standard of living down from a Cadillac scale, let us say, to a Buick scale or a Chevrolet scale is not to be compared with the sacrifice involved in giving up a quart of milk a day or a new pair of shoes for the child or a much needed visit to the doctor.
Consequently, we propose the following exemptions: Single person, $1,600; married couple, $2,400; dependent, $600.