When the contestants fail to do their best on The $64,000 Question, no one is the loser but the individual concerned—assuming he could have answered the question correctly. But when a promising young business executive decides that he won't try for the $64,000 question, when he decides that the job of, say, plant manager is sufficiently rewarding, and that he isn't interested in becoming production manager because the increased net just isn't worth the extra effort and strain, then everyone is the loser.
Management ineptitude would assess its penalties in terms of higher costs, diminished opportunity, and a slowing down of the kind of bold venture that is necessary to growth. It would be demonstrated, I think, in declining stability, for often the failure of one firm engulfs others. In so highly integrated an economy as ours, shock waves are transmitted with great speed and ruinous force. We cannot sustain many such shocks without impairing our strength and security as a nation.
And so every citizen has a stake. He wants lower prices, expanded employment, a degree of job security, good prospects for advancement. He wants better schools, better medical facilities, better care for the aged, more cultural facilities. He can have them in an era of rapidly expanding population only if industry grows more dynamic rather than less, better managed rather than worse.
This is why all of us must take with great seriousness any threat to the future successful operation of industry, for it is clear that industry is the keystone of our economic arch. The real wealth it produces makes possible progress in all our other fields of endeavor, educational, cultural, charitable, governmental, and so forth. Conversely, any act that cripples
our industry, cripples the Nation and the free world along with it. In proof one need only look at Communist efforts to foment discord in American industry.
It is essential that our friends as well as our enemies realize the disastrous consequences of any such development, for economic laws take no account of motives. Violate them and the penalty is assessed even though the violation might have been committed for the most worthy and helpful motives.
I see in the present high tax levels such a threat to American industry. Let me emphasize again that my concern is not with the present crop of executives nor with their immediate successors. It is with the future. It is somewhat nebulous and hard to grasp because it is not an immediate and finite problem. But its importance is no less great because of that, and statesmanship implies concern for what lies ahead as well as for what presently confronts us.
How the problem is to be met is a question to which I do not have the answer. I am hopeful that the deliberations of your committee may produce helpful data and valuable conclusions. But of this I am sure: the dollars involved in the high-tax brackets constitute but a very small percentage of the return to the Government from personal-income taxes. I am not necessarily arguing for a limitation, but for the sake of illustration it can be pointed out that personal-income taxes in excess of 50 percent paid in the calendar year 1954 amounted to $1,075,000,000. This is 3.8 percent of total personal-income-tax collections for that year. It is incidentally, 1% percent of Federal expenditures for 1954, and would have run the Government for 6 days.
The exactness of these figures is not important, however. What is important is that it would be a tragic thing, indeed, if, for such a relatively small amount, we should jeopardize the future successful operation of our industry. If it should not hold its own in the years to come—indeed, if it should not do much better than hold its own—all of us will face a bleak and static future.