Pres. Truman's State of the Union speeches: on Tax Reform

Establish a per-person cost-of-living tax credit

I recommend therefore that, effective January 1, 1948, a cost of living tax credit be extended to our people consisting of a credit of $40 to each individual taxpayer and an additional credit of $40 for each dependent. Thus the income tax of a man with a wife and two children would be reduced $160. The credit would be extended to all taxpayers, but it would be particularly helpful to those in the low-income group.

It is estimated that such a tax credit would reduce Federal revenue by $3.2 billion. This reduction should be made up by increasing the tax on corporate profits in an amount that will produce this sum--with appropriate adjustments for small corporations.

This is the proper method of tax relief at this time. It gives relief to those who need it most without cutting total tax revenue