An one which I would suggest is a manufacturers' excise tax on motor vehicles and automotive products. The Federal Government has the beginning of such a tax in its excise tax on tires now earmarked for highway purposes. excise tax on motor vehicles would impose the increased highway burden upon the automotive industry rather than upon the heavily burdened petroleum industry and thereby broaden the highway taxation base. Furthermore, the incidence of such a tax would be in large part on buyers of new cars who have a relatively high ability-to-pay in relation to buyers of used cars. My specific recommendations are as follows: 1. That the Congress reject outright the proposed increase in the Federal tax on gasoline and declare its intention to leave to the States any future increases in the rates of motor fuel taxation for their highway purposes. 2. That if additional revenues are necessary for Federal highway purposes, the Congress increase the manufacturers' excise tax on motor vehicles and possibly other automotive products and earmark the revenues for such purposes. Respectfully yours, BERTRAM H. LINDMAN. Mr. LEO H. IRWIN, CONSULTING ENGINEERS COUNCIL OF MARYLAND, INC., Chief Counsel, Committee on Ways and Means, DEAR SIR: The following statement is submitted on behalf of the Consulting Engineers Council of Maryland for inclusion in the record of hearings on methods of financing the expanded Federal-State highway program being held by the House Committee on Ways and Means. "During the various committee hearings, prior to the passage of the Federal Highway Act of 1956, it was evident that all segments of our economy and the general public recognized the need for a sound national highway program to effect a reduction in the highway accident and fatality rates, to return the economic benefits to industry and commerce which are possible only with adequate highways, and to provide a national highway system needed for national defense. It was also evident that there would be sufficient engineering manpower, materials, construction equipment, and construction forces to execute such a program. "In the act of 1956 the Congress clearly stated its intent to carry out the program, including_the_completion of the Interstate and Defense Highway System, by 1972. The Bureau of Public Roads, the various State highway departments, consulting engineers, materials producers, equipment manufacturers, contractors, and all other segments of the highway industry have geared themselves to this level of production. "The need for the construction of the Interstate System in accordance with the original schedule has not changed. "It is the view of the Consulting Engineers Council of Maryland that the present session of the Congress has an obligation to find some means to overcome the temporary deficit in the highway trust fund in order to make possible the apportionments to the States for fiscal 1961 and 1962 at the levels proposed by Representative George H. Fallon, chairman of the House Subcommittee on Roads. "It is our opinion that the economic loss which would result from failure to make up this deficit, makes any stretch out of the program unthinkable. "Cut-backs and interruptions at this time will seriously hinder sufficient planning and construction of the program. All deferred construction will add to the overall cost of the program. "Highway department and consulting engineering organizations, by gradually expanding their staffs, have now developed qualified organizations for handling the engineering phases of this program. A retrenchment in the program now will force a reduction in these staffs and break down these efficient organizations. "Consulting engineers have also cooperated in a national effort to interest more young men entering college to take courses leading to a career in engineering. This effort to bring new talent into the highway engineering field cannot succeed if prospective engineers loose faith in the continuity of the highway program. "The Consulting Engineers Council believes that some compromise interim financing program can be devised at this time. The council also believes that some increase in the Federal gasoline tax as a pay-as-you-go measure appears desirable to help make up part of this deficit. "It is our view, furthermore, that no reappraisal of the overall financing of the program should be undertaken until 1961, when the Congress will have new cost estimates and a report on benefits and beneficiaries of the highway program from the Bureau of Public Roads. "The effect of the present condition of the highway trust fund is already being reflected in delay and confusion in the execution of the highway program in the various States. We earnestly request that the Committee on Ways and Means move expeditiously toward an early solution of the dilemma created by this deficit in the highway trust fund by taking whatever action necessary to put the Federal highway program back on schedule." Sincerely yours, WM. G. ROBERTSON, Jr., President. AMERICAN BAKERS ASSOCIATION, Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR CONGRESSMAN MILLS: In connection with the hearings now being held by the House Ways and Means Committee, relative to a proposal to increase the Federal motor-fuel tax, may I respectfully bring to the attention of the committee the policy position of the American Bakers Association. This association is the national trade association of the wholesale and home-service baking industry, which operates in excess of 100,000 trucks on the highways of the Nation. The American Bakers Association is opposed to any tax increase at this time, believing that our membership is already incurring more than its fair share of the support of the financing of the program. A relatively small percentage of our trucks uses the Interstate System, since most of our deliveries are made in the urban and suburban areas operating in approximately a 50-mile radius from the plant. We strongly supported the enactment of the Highway Act of 1956 and the various automotive tax increases imposed then, including the 1%-cents per gallon Federal gasoline tax, in the hope that the improved highway system would be an effective step in reducing our distribution costs insofar as the operation of motor vehicles is concerned. At the same time we were aware that the program would have periods of temporary deficits in the early years of construction which, it was anticipated under the legislation as originally passed by the House, would be met by repayable advances from the Treasury of the United States, chargeable against future trust fund receipts. Such a method of financing was considered practical inasmuch as specific future tax receipts were earmarked for the construction of the Interstate System. Unfortunately, the restrictions of the Byrd amendment, added by the Senate, negated such financing. Nonetheless, in our considered opinion, this method of meeting temporary deficits in the construction of the system, still appears eminently sound, and we would urge your committee to recommend some such approach in preference to any increase in the Federal gasoline tax. It is noted that the proposed increase in the gasoline tax, has been referred to in official quarters as a temporary increase to terminate in 2 years' time. The experience of history bespeaks otherwise. Taxes which in the past have been labeled as "temporary" and "for a limited specific purpose" have invariably managed to become a permanent part of our tax structure. It is understandable, therefore, that we view with extreme skepticism any promise as to the "temporary" nature of the proposed increase. As a further point, traditionally and logically, gasoline taxes have been reserved to the several States, except for the temporary emergency wartime tax and the 1%-cents tax for the construction of the Interstate Highway System. We believe there should be no further encroachment on this taxing area of the States, many of which are already in dire need of additional revenues. Also we would urge the committee at this time to confine its deliberations to a resolution of the problem of the temporary deficit covering the apportionments through 1961, since those apportionments must be made within the next few months to maintain continuity of the program of its scheduled rate of construction. As your committee is, of course, aware, the study provided for by section 210 of the 1956 Highway Act will be available to Congress in January 1961, which study will permit sounder and more thorough consideration of the necessary long-term financing of the program. In summary, therefore, we are opposed to any increase in the Federal gasoline tax. Temporary deficits should be financed through some method of repayable advances chargeable against the trust fund receipts, and consideration of the long-range problem of financing should be deferred until completion of the section 210 study. Sincerely, Hon. W. D. MILLS, JOSEPH M. CREED, Counsel INDIANA BAKERS ASSOCIATION, House Office Building, Washington, D.C. DEAR MR. MILLS: In behalf of our membership we are protesting any increase in the Federal gas tax and instead we urge Congress to use all automotive excise taxes for highways. Our industry is a big user of gasoline and now pay into the millions for gas taxes, both State and Federal. We would appreciate, if possible, that this protest be made a matter of committee record. Thanking you in advance. JOHN S. CLARK, President. CHAMBER OF Commerce of THE UNITED States, Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, DEAR MR. MILLS:The national chamber has supported the expanded highway construction program on the Interstate System, authorized by the Highway Act of 1956, since its inception. We are convinced that the program is needed to remedy serious deficiencies in the Nation's highways important to interstate commerce and national security. This position was arrived at through a national referendum of the membership in 1956 during consideration of legislation that resulted in the 1956 Highway Act. The chamber believes that the pay-as-you-go principle established in the act is sound and should be maintained. Otherwise, the possibility of balanced Fed eral budgets for 1960-62 will be seriously jeopardized. As it now stands, the highway trust fund, which supplies the money for Federal highway aid, will be short about $500 million in the current fiscal year, and over $2 billion for each of the fiscal years 1961 and 1962. This is a temporary situation which will be taken into account in a scheduled comprehensive review of the entire highway program due by the spring of 1961. At that time Congress will have available to it detailed official studies which will permit a more accurate determination of beneficiary responsibility for the costs and a more equitable tax plan will thus be possible. The recommendation we are making, therefore, is designed only as a solution of the temporary situation. The board of directors of the chamber recently gave thorough consideration, in light of the policy established by the membership, to the situation facing the highway trust fund and the alternative methods of financing the anticipated deficiency for the next few years. Repayable advances to the trust fund from the general fund were rejected because they would mean deficit financing. The issuance of a special class of bonds against the assets of the highway trust fund was similarly rejected because that, too, would mean an increase in the national debt. With an objective of continuing the program on the Interstate System and at the same time promoting sound fiscal policies, our board recommends that taxes now assigned to the trust fund be increased, with a definite terminal date, as far as practicable toward the goal of providing the revenue necessary to make the fund solvent and the program be tailored to live within the revenue provided. I request that this letter be made a part of your current hearings. Cordially yours, CLARENCE R. MILES, STATEMENT OF THE PENNSYLVANIA STATE CHAMBER OF COMMERCE BEFORE THE HOUSE WAYS AND MEANS COMMITTEE (Submitted by Penrose Hertzler) My name is Penrose Hertzler. I am an attorney in Pottsville, Pa. This statement, which I am submitting for the hearing record, represents the views of the Pennsylvania State Chamber of Commerce, an organization which I serve as vice president, and as transportation committee chairman. The Pennsylvania State Chamber is a federation of businessmen, with more than 4.200 members from all parts of the State, and from all types of business, plus 215 local chambers and 80 trade associations. It is the only statewide business organization in Pennsylvania representing all lines of business and industry. Pennsylvania businessmen have a keen and direct interest in the completion of the Interstate System. As highway users, they hope to reduce the time necessary to get from place to place; as merchants, they hope to reduce the expense of transporting goods to their customers and from their suppliers; and as manufacturers they hope to reduce their costs of manufacture. In addiiton to the benefits accruing from the use of the Interstate System as a transportation network, Pennsylvania business will benefit from the enormous direct expenditures involved. To complete the 1,550 interstate miles allotted to Pennsylvania the Federal-Aid Act of 1958 authorizes the allocation to Pennsylvania of approximately $101 million for fiscal 1961. Because of our highly industrialized economy, a very high percentage of this money will be spent in Pennsylvania with Pennsylvania businessmen. Despite the obvious advantages to be derived from completion of the program, the Pennsylvania State Chamber is opposed to increasing the Federal tax on motor fuels, even if this stand implies a slowdown in the construction program. At the same time, we believe that the program should be held to a pay-as-you-go basis, and should not be financed by an inflationary increase in Federal debt. We point out that an increase of 11⁄2 cents per gallon in the Federal gas tax is an increase of 50 percent in a tax that is already a considerable burden on the cost of transportation by highway. Congress only last year removed the excise tax on the transportation of property, an action partly prompted by a desire to stimulate trade and industry. The proposed increase in fuel taxes would tend to place a new tax deterrent on that part of the transportation industry which uses the highways. It has been proposed by the administration that the tax increase be a temporary levy, for 5 years only. By then, the Congress will have had the benefit of the highway cost allocation study now being made by the Secretary of Commerce, and can establish a tax system which will distribute the burden equitably on the various beneficiaries of the system. We have two comments to make on this proposal. First, the cost allocation study will be available by January 3, 1961, only 18 months away. To levy an increase of 12 cents on highway fuels at this time will, in large measure, tend to prejudge the results of the allocation study. The fuels levy would tend to ignore an important conclusion forecast by the Secretary of Commerce in the Third Progress Report, of March 2, 1959: *** the net result is the showing of very great benefits to others than the direct users of the highways." Second, the State chamber objects to any temporary solution of the financing problems of the trust fund which depends on the imposition of a temporary tax. Our experience with such taxes has been that they tend to become permanent, and that the program of expenditures tends to expand to the point where the tax is fully utilized on a permanent basis. If this should happen in highway financing, the end result can only be that the role of the States in highway construction will be diminshed, as the role of the Federal Government becomes greater. The basis for the State chamber's position can be summed up, I think, in a quotation from a letter on highway financing written by a member of the cham ber's transportation committee, who also happens to represent a very large supplier of highway construction equipment. He writes, "We must not allow ourselves to become so enthused about highway construction that we lose sight of matters of more national importance. We would all certainly like to see the Interstate Highways System completed on schedule. If, however, ‘on schedule' completion can be accomplished only by appropriating money which we do not now have, I believe that appropriations for fiscal 1961 should be limited (to funds available). The Pennsylvania State Chamber objects to any increase in the Federal tax on motor fuels, at this time, even if this necessitates a slowdown of the program. OHIO CHAMBER OF COMMERCE, Mr. LEO H. IRWIN, Chief Counsel, House Ways and Means Committee, DEAR MR. IRWIN: Attached herewith is a communication from the president of the Ohio Chamber of Commerce, Mr. Hugo H. Young, setting forth the position of the Ohio Chamber of Commerce with respect to current proposals for increasing Federal gasoline taxes. It would be very much appreciated if this communication of views in opposition to current tax increase proposals could be made a part of the hearing record of the Ways and Means Committee. Respectfully, PAUL J. DAUGHERTY, Executive Assistant. Hon. WILBUR D. MILLS, Chairman, House Ways and Means Committee, OHIO CHAMBER OF COMMERCE, DEAR SIR: We are advised that the Ways and Means Committee is currently considering the question of financing the present Federal highway trust fund. Our board of directors, broadly representative of Ohio industry and commerce, and speaking for more than 5,000 member firms, wishes to be recorded at these hearings in opposition to any change in the present Federal gasoline tax already levied at 3 cents per gallon. Our organization is taking every action possible to oppose inflationary moves at this time. The Ohio General Assembly in the current session has recently imposed an additional 2-cent gasoline tax. This brings the total combined Federal and State levy to 10 cents per gallon in Ohio. Because these combined Federal and State highway use taxes have a very heavy impact on all Ohio highway users, both private and commercial, we earnestly urge that the members of the Ways and Means Committee forego any change in the Federal gasoline excise tax rates. We believe that there are other alternatives available to the Congress in the field of budgetary economy which can provide improvements in the Federal Interstate Highway System without adding further Federal tax and "cost-ofliving" burdens at this time. On behalf of the business organizations in our membership as well as for numerous individual highway users, we earnestly urge retention of the Federal gasoline tax impositions at their present level. Very truly yours, HUGO H. YOUNG, PROPOSED INCREASED GASOLINE TAX Statement of James J. Mahon, Jr., vice president and chairman, executive committee, Chamber of Commerce of Greater Philadelphia My name is James J. Mahon, Jr. I am vice president and chairman of the executive committee of the Chamber of Commerce of Greater Philadelphia, appearing in opposition to the proposed temporary increase in Federal gasoline |