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 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. I am employed by the union.

Mr. SIMPSON. You told me you were hired by these general officers. Now 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 that reason.

Mr. 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. NIXON. All right, sir.

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

79120-51-pt. 2-3

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. NIXON. I have not finished my statement, Mr. Chairman.

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.

Now in applying these exemptions, we realize it will be necessary to make a mathematical adjustment in the upper areas so as to avoid the flowing of the tax-reduction impact clear through the income scale. We would suggest that those changes be made. Our problem is how much would this cost. It is possible to calculate it very easily although I must say roughly.

In terms of the revenue proposed by the Treasury under the Treasury's proposed rates, this change in exemptions to remove all Federal income taxes from families whose income is inadequate to meet this minimum budget would cost roughly $4 billion. To break it up a little more, to take the income taxes of all of the families below $2,000 would cost only $1 billion. In other words, to prevent income taxes from aggravating or creating substandard living conditions would reduce the tax revenue roughly $4 billion below the Treasury's proposal. We think those exemption changes should be made.

We also urge that Federal excise taxes on common consumption items really common consumption items that go into a budget like this should be raised. By "raised" I mean lifted. By "lifted" I mean done away with, should not be applied on these minimum. necessary consumption items, and of course no new sales taxes or general or specific excise taxes should be levied on these common consumption items.

Now I come to the final point of my presentation, the question of alternatives to this type of revenue, alternatives to the revenue that comes from forcing American families further down below the minimum standard of living for health and efficiency.

If you think of the many alternative sources of revenue that have been presented to you-and I know you are much better acquainted with them than I-if you think of them in terms of being alternatives because that is what they are, alternatives to poverty-creating taxes, the proposals for alternative sources will have considerable weight with this committee. We believe, first, that the elimination of the poverty-creating taxes does not necessarily mean reducing actual tax

revenue.

Second, we believe that any alternative source of tax revenue is more desirable than taxes which force American families not to eat enough, to be ill clad, and not to see the doctor when need be. These seem to be the real choices before this committee.

There are two types of alternatives. One type is the type of alternative taxation which involves the closing of escape routes for taxation, the closing of loopholes which are indefensible on every basis of equity and justice.

The second type, not in exactly the same category, is merely the burdensome and difficult imposition of higher taxes on levels other than the minimum levels. There I think there is a distinction to be made between the closing of the loopholes which have been tax escapes. We merely want to suggest several possible alternatives. I do not suggest these with any degree of finality, any degree of final determination of income that would come from them, but I want to propose them to you as alternatives to the taxes that would otherwise be proposed on the low-income, substandard-income families of our country.

In the first place, of course, there is the possibility of increasing the intake from profits. I know the arguments against additional

income taxes on profits, but I think if you compare the alternative with the burden of taxes on substandard families, you will recognize that if need be there is an additional source of at least $7 billion in terms of alternatives, with which you are actually faced, which could be gotten from corporate taxes.

Secondly, income splitting, withholding tax on dividends, you know the arguments for these. I do not need to repeat them. Let me make this point. The evidence is that just by imposing the withholding tax on dividends you raise around $200,000,000 a year. This step alone would raise more than three times the revenue that you would lose by ending all taxes, income taxes, on incomes less than $1,000.

We think at least 2 billion dollars more could be raised by eliminating income splitting, by withholding taxes on dividends, and by rigid enforcement of existing tax schedules.

A second suggestion has to do with accelerated amortization of corporations.

I heard Defense Mobilization Director Wilson say the other day that they had certificates of necessity for 6 billion dollars. The indications are that this sum will increase considerably. This comes out of the Public Treasury. We think it is very questionable to give the United States Steel Corp. a $1,250,000,000 new steel plant near Clinton virtually free of cost, virtually completely out of the public treasury, and that is an example of what would be done under this.

We think a more rigid application of this policy could save at least 1 billion dollars a year by eliminating unnecessary accelerated amortization allowances.

By proper changes in the estate and gift taxes you can get another $500,000,000. Can anyone justify going easy on estate and gift taxes of well-to-do groups when the price of that consideration is heavy taxes on the ill-clad, the ill-fed, and ill-housed?

In the same way if we want to be tough on depletion allowances on properties and the Treasury has presented you with ample evidence in this case you have an alternative which would give you an additional income of 500 million dollars. We ask: Can anyone justify satisfying the lobbyists of these greedy special interests at the cost of taxes on decent American families living at or near poverty conditions?

Finally, if it is going to be necessary to increase taxes, and we have no question but what income taxes are already very heavy at every level of income, the fact still remains that rather than impose taxes which condemn American families to substandard living, there is still a possibility of tax revenue in the incomes above the minimum standards. Or, to put it this way, after the Treasury's proposed rates are applied, 35 billion dollars could still be taken from incomes above $5,000 before these 7 million taxpayers would be reduced to the average income levels of the 35 million taxpayers under $5,000 income levels.

Now I hasten to say we are not proposing such a tax. The point is that a vast margin of potential incomes still exists above the minimum income levels dividing poverty from minimum health existence.

I conclude with this: The alternative sources of tax revenue suggested above could raise from 15 billion to 25 billion dollars, depending on what you decide is necessary. Some of these sources should be taxed to end grossly unjust tax privileges of the greedy. All should be used to the utmost rather than to put taxes on family incomes

below the proposed UE exemptions of $1,600 for a single person, $2,400 for a married couple, plus $600 for each dependent.

No taxes should be levied on American families whose income is not large enough to maintain living standards at minimum adequacy levels of health and efficiency.

That is all, Mr. Chairman.

The CHAIRMAN. Mr. Eberharter.

Mr. EBERHARTER. Mr. Nixon, I think you have made a comprehensive statement here. I think the figures were taken from Treasury reports and Commerce Department reports; is that true?

Mr. NIXON. Yes, sir, that is correct, and these Department of Labor reports, Mr. Eberharter.

Mr. EBERHARTER. I notice that many of your recommendations are straight down the line with the Treasury's recommendations, practically.

Mr. Nixon. Yes, sir; that is correct. They also coincide, I think as far as the income tax levels, very generally, with the table by the American Federation of Labor.

Mr. EBERHARTER. You call attention to some loopholes here, the same proposition that the Treasury has been advancing for years. Is that correct?

Mr. NIXON. That is correct.

Mr. EBERHARTER. Your principal over-all argument, after presenting to the committee facts and figures and reasoning, is that "no taxes should be levied on American families whose income is not large enough to maintain living standards at minimum adequacy levels of health and efficiency" and "no taxes should undercut a living wage," Is that your principal premise?

Mr. NIXON. That is the basic one.

I want to address the attention of this committee to what is the lower level. How far down will you go? How much do you know about what you are actually doing to an American family when you impose additional taxes on somebody who is already on a substandard living level?

As a matter of fact, we are disappointed that the Secretary of the Treasury did not reflect the excellent study of his own staff in his own department on this very subject. I think it would be a very constructive thing if this committee were to make a further investigation at these levels perhaps to ask the Treasury to bring its study of December 22, 1947, up to date, perhaps to ask the representatives of the Bureau of Labor Statistics, who compiled this report, to come up here and talk about this question. We think more information is necessary on it.

Mr. EBERHARTER. Who prepares these statistics on the minimum living standards of the American family?

Mr. NIXON. I have it here, sir, called the City Workers Family Budget, put out by the United States Department of Labor, Bureau of Labor Statistics, Prices and Cost of Living Branch.

Mr. EBERHARTER. When was that issued?

Mr. NIXON. This was issued in December 1947. We brought it up to date on the basis of current prices.

Mr. EBERHARTER. That is 4 years old now, and the standard of living is more costly now than when that was issued?