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Now, when you talk about small business, do you mean individual, partnership, and corporate businesses?

Mr. BURGER. I mean all of them; yes, sir.

The CHAIRMAN. In what part of the country and in what lines of business are these small-business men engaged that you say are now in distress? The district I represent, as I stated, has many small businesses. We have small furniture manufacturers, small textile mills, small hosiery mills. Almost every line of small business is represented by factories in the counties which I represent.

Now, the hardware stores, the department stores, and all of the businesses of the district I represent seem to be fairly prosperous, and some of them appear to be especially prosperous. I do not know of any bankruptcy proceedings or anything of that kind. I never see any account of that in the papers. Everybody seems to be employed. I am just wondering where this distress you speak of is found? It is not present in the district I represent, or, if it is, I have not found out about it. Everything indicates to the contrary. We only have two or three large businesses in my district. Outside of them, all the businesses of the district I represent are small businesses, either individually owned, partnerships, or corporations. There are thousands of them. Now, where is the distress?

Mr. BURGER. Mr. Chairman, I did not want to take up the time of the committee, but believe me when I say that I think I could have produced for the record factual cases from constituents of your district and from the districts of almost every member of this Committee on Ways and Means, people who are coming to the federation. And I assure you that we are not looking for work.

I believe that most of these people are honest in their contentions and are not trying to get more of the raw materials. I wish that I could recall right now, Chairman Doughton, cases from your own district. Let me say that I am not talking so much about retailers. I am talking about small fabricators. It has not gotten down as yet to the retailers.

The CHAIRMAN. I mentioned several kinds of small fabricators such as textile mills, hosiery mills, and furniture manufacturers. There are stores of all sizes and dimensions that seem to be prosperous, as prosperous as I have ever known them to be, and employment is full. There is no unemployment. People are leaving the farms by the thousands and going to the mills and factories in the towns to work.

Of course, I do not say that there may not be some individual concern that is having difficulties. There has never been a time in the world but that somebody is being hurt. But, generally speaking, the conditions in the district I represent does not agree at all with the picture you have painted.

Now, you seem to have two special fears. One is of higher taxes and the other is that small businesses won't get materials.

Mr. BURGER. That is the idea. I think the effect has not as yet reached from the middleman and the fabricators down to the ultimate consumer; but at the rate it is going it will not be many weeks or months before the consumer will feel it.

The CHAIRMAN. The question of materials is not one that should come before this committee, but the question of taxes is a problem for this committee.

Mr. BURGER. Exactly.

The CHAIRMAN. In your statement you have quoted from your testimony before the Senate committee in which you expressed a willingness to do your part. Now, just what is that part?

Mr. BURGER. We want to use all of our efforts.

The CHAIRMAN. The last tax bill was based on peacetime needs, peacetime conditions, while now we are in an emergency.

Would you consider that you should pay additional taxes on account of the emergency, that is, more than in peacetime?

Mr. BURGER. Mr. Chairman, I am not a tax expert. The Department of Commerce announced the other day that there are 4 million small businesses throughout the Nation. If a goodly percentage of those small businesses should close their doors, it would come back to this Committee on Ways and Means at an early date, the problem being to take care of the lack of income that theretofore had been coming in from that group.

The CHAIRMAN. Is there a great threat that that condition will obtain if small business is reasonably prosperous, or is making a substantial profit? As I understand it, you are dealing in your discussion mainly with profits and do not distinguish between individual enterprises and corporate businesses. Now then, we want to tax profits. As long as we only want to tax profits, there is no great danger of putting a company out of business, is there? In the case of corporations, as you no doubt know, we allow them to make $25,000 before the surtax is applied.

Mr. BURGER. We appreciate that. The reserve that the Committee on Ways and Means gave to small business has been very helpful to them.

The CHAIRMAN. What suggestions do you have as to our problem of raising additional revenue? What class of business do you suggest we get this additional revenue from? We are all in favor of reducing unnecessary expenditures, but the President has said that we cannot go any further. He has dared us to go any further.

But you recommended the curtailment of expenditures. Tell us just where we can do that.

Mr. BURGER. Well, Mr. Chairman, I can only give you my reaction to an interesting piece of news that appeared in the paper a day or two ago. I have heard the same thing discussed on the train back and forth from New York and in hotels here in Washington. This matter was the sale of butter the other day, over 1 million pounds of butter, at a price, as reported in the press, charged the foreign government of around 15 cents a pound. The price on the Commodity Exchange in New York was, I think, around 90 cents a pound. I am only citing that as one example, Mr. Chairman. I do not know whether that comes within the province of this committee.

The CHAIRMAN. That would properly come before the Committee on Appropriations.

Mr. BURGER. I am citing that as a case of unnecessary expenditure.

The CHAIRMAN. I believe that matter should be brought to the attention of the Committee on Appropriations.

Mr. BURGER. I am only saying that there are unnecessary expenditures at these times along that pattern.

The CHAIRMAN. On page 4 of your prepared statement, in the next to the last paragraph, there is something that I did not fully understand. There you say:

Now, even before any further increase in taxes, all of these stumbling blocks to continued small and independent business are greatly magnified. I do not understand that. I thought you were emphasizing these stumbling blocks. Now you say that they are magnified. What does that mean?

Mr. BURGER. As I would read those two lines-
The CHAIRMAN. Did you prepare this statement?

Mr. BURGER. It was prepared for me under my supervision; yes, sir.

The CHAIRMAN. That needs a little clarification.

Mr. BURGER. I think that the intent there is that the opposition is magnifying these stumbling blocks.

The CHAIRMAN. Have you not been emphasizing the stumbling blocks to small businesses in this statement? I am not arguing with you. I just want to see what you meant by that.

Mr. BURGER. The opposition says that the cries of small business with regard to the tax load and all of these other things are being magnified. We do not say that they are being magnified.

The CHAIRMAN. They contend that the complaints you set forth are magnified. Is that what that means?

Mr. BURGER. The opposition is saying that. That is apparently the result, Mr. Chairman, of a hurried job in preparing this statement.

The CHAIRMAN. In your statement, as I said before, you quote from your testimony before the Senate Finance Committee, emphasizing the fact that small business is willing to do its part. Now, just what is its part?

Mr. BURGER. First, we want to stay in business if it is efficient, and secondly, we want to give all our services to the Government. That is what small business is willing to do as its part.

The CHAIRMAN. But not to pay any more taxes?
Mr. BURGER. Well, to the degree that-

The CHAIRMAN. I want you to understand me clearly; I am not debating this with you at all. I am just trying to learn your position.

Mr. Burger. Mr. Chairman, it is a difficult thing for small business to build up reserves. I think the economy would be better off to have many active, successful, independent small businesses remain; and that can be done without any great hardship on the tax income of the Government.

The CHAIRMAN. At the top of page 5 of your prepared statement you recommend certain things. The first is: "We should refuse to raise taxes on small and independent business or to raise them to the confiscatory levels suggested so far.'

Now, as I understand it, you object to raising taxes at all on small business. Yet small businesses are making perhaps more money or as much money as they have ever made.

Mr. BURGER. They will pay their proportion.

Mr. CHAIRMAN. Suppose a business is making considerable profits, extraordinary profits, abnormal profits. Then would you say that it should not pay any more taxes in this emergency?

Mr. BURGER. I think small business, what we call small business, is paying more than its proper share.

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The CHAIRMAN. Suppose it is making extraordinary, abnormal, or unusual profits. Then, merely because it is small business, do you think it ought to use all of its profits and not help the Government in this kind of emergency? I just want to get your position clear. I am not expressing an opinion one way or the other.

Mr. BURGER. In answering your question, with no disrespect to any other segment of our economy, I think small business will be found most patriotic in helping the Government in all of its endeavors.

The CHAIRMAN. If all of the recommendations you make at the top of page 5 in your prepared statement were approved and carried out, would that not result in a loss of revenue in this emergency? If the committee approved those recommendations in its tax bill, would that not result in the loss of revenue? You see, our job is to find additional revenue. I believe both of the recommendations you make there would result in a loss of revenue. Mr. BURGER. I do not think, Mr. Chairman, that the Government

. I stands the chance of losing anything in the long run by giving consideration, if necessary, to small and independent business.

The CHAIRMAN. But the long run might be a period of 10 years. We are dealing now with the fiscal year 1952.

Mr. BURGER. I know that, but in the hearings before the Joint Committee of Foreign Relations and Armed Services, a witness the other day--and I do not know whether it was General Marshall or the Secretary of State-stated that this may be a 15- or 20-year pull, this condition that we are in now.

The CHAIRMAN. Well, I suppose that is possible, but we cannot legislate for 15 or 20 years.

Mr. BURGER. Suppose that in the meantime, to a large degree, small businesses ceased to exist in this economy. Do you think that is going to be helpful to the tax load? Someone has to pay it.

The CHAIRMAN. Well, I am not a witness. I am just asking questions that will help me. That is what you are here for: to help this committee bring out a proper tax bill, a fair tax bill, an equitable tax bill. I am sure you realize that it is our duty to bring out a tax bill that will increase revenues. I do not believe you have helped us any on that.

Mr. BURGER. To conclude, Mr. Chairman, I would like to have the privilege, with your consent and with the consent of the committee, to file a supplemental memorandum giving a tax proposal in dollars and cents.

The Chairman. We will, of course, accord you that privilege, providing you get the memorandum in in time, subject, of course, to the approval of the clerk.

Are there any further questions? If not, we thank you, Mr. Burger, for your appearance and for the information you have given the Committee.

Mr. BURGER. Thank you very much.

The CHAIRMAN. Our next witness is Mr. Russ Nixon, Washington representative of the United Electrical, Radio, and Machine Workers of America, Washington, D. C.

Mr. Nixon, will you state your name and address, together with the capacity in which you appear before the Committee, for the benefit of the record.

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Mr. Nixon. I am Russ Nixon, Washington representative of the United Electrical, Radio, and Machine Workers of America, 1000 Eleventh Street NW., Washington, D. C.

Mr. Chairman, at the outset I would like to ask permission to have my statement put in the record, and I would like to summarize it extemporaneously, if that is satisfactory to your committee.

The CHAIRMAN. Without objection, that will be done.
Mr. REED. Pardon me, Mr. Nixon, but are these your charts?
Mr. Nixon. Yes, sir, they are.

Mr. Chairman, before I start, I would also like to thank the committee for the privilege of appearing before you again in these tax deliberations.

The CHAIRMAN. We are glad you have appeared. The information may be helpful to us.

Mr. Nixon. As you know, I am a representative of a trade-union. Very frequently, I think, we come from the trade-union movement and we raise a fuss about the rich. We talk about the wealthy and great profits.

Today I would like to put my principal emphasis, in discussing the tax question which you are considering, not on the rich but rather on the

poor, because I think we have come to a situation where we need to give special attention in this area.

The basic point that I want to make to you is a simple one. It is this: 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.

Put in a different way: No taxes should be placed on family incomes already below a living wage.

Mr. Mason. What would you establish as that standard?

Mr. Nixon. Mr. Mason, that is a major part of what I want to talk to you about.

Mr. Mason. Good.

Mr. Nixon. In other words, I am addressing myself to the question of taxes on income levels which have the effect of cutting down the amount of food that children eat, the clothing that the humble people wear, their ability to have medical care, and to meet the other basic necessities of life.

Secondly, I want to address myself in a secondary way to the question of alternatives. But I emphasize that, in talking about alternatives, I want you to keep in mind that as you consider alternative sources of revenue, the first alternative which is before this committee and which you must consider is the imposition of more povertycreating taxes on the low-income levels of our people.

Now, I realize that in taking this position we take issue with a major propaganda and pressure campaign which I believe emanates from major industrial and financial sources to the effect that lowincome groups must absorb a great additional part of the tax burden. We interpret this as being the choice of that alternative rather than the alternative of taxation on areas which can much better accept an additional load.

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