The Tax Stays

Movie-theater owners, hard hit by TV, were jubilant last month when a bill to abolish the 20% federal tax on movie tickets sailed through the House in only two hours of debate, took only 45 minutes in the Senate. By last week the same men were apprehensive. Treasury Secretary George Humphrey disapproved of the bill, and into his office trooped a covey of hand-wringing moviemen to urge him to change his mind. While such potent Hollywood brass as Paramount's Barney Balaban, 20th Century-Fox's Spyros Skouras and Columbia's Jack Cohn were in mid-argument, the Secretary's phone rang. Humphrey answered it. Then he told the distinguished lobbyists that the President had just issued a memorandum of disapproval. He was killing the tax-relief bill by a pocket veto.*

In his message, the President noted that the price of tickets to the public would have remained the same even if the tax had been repealed. He based his veto on two points: 1) "We cannot afford the loss of revenue involved" (an estimated $200 million), and 2) "It is unfair to single out one industry for relief at this time." But the President did soothe the theater owners' heartburn. Agreeing that the tax is "not a good one," he promised to ask Congress to repeal it "early in 1954."

* Every bill must be signed by the President within ten days (not counting Sundays,) of the time it is delivered to him. If Congress is in session, bills not signed within ten days become law. If Congress has adjourned, as is now the case, unsigned bills are automatically vetoed--the so-called pocket veto.

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