Taxes: Going Up

Among students of the economy these days, the most popular topic is How to Stimulate Business by Cutting Taxes. In the general enthusiasm, all but a few flinty-eyed accountants seem to have overlooked the fact that 1963 begins with taxes actually going up. Under a 1958 law, social security taxes will rise by $1.8 billion this year—50% of it to be paid by employers and 50% by wage earners. This means that any income tax reduction that Congress may ultimately vote will be $1.8 billion smaller than it looks. And if Congress rejects a cut in income taxes, U.S. corporations will add $900 million to their costs in 1963 and U.S. wage earners will have $900 million less to spend.