The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-12-10
More Taxes and Why


The Presidents budget message reveals Wltnout
equvocaton the serious financial plight OF the federal
government and the sacrifices taxpayers will have to
make to meet it. Our present difficulties would not be
so great had the present administration and its prede-
cessor been willing to face the truth Instead OF con-
tinuing to coast along at last are going TO do
something about the situation.
The question is whether the proposals Of Presi-
dent Hoover and Secretary Mellon are adequate
The government now is spending about twice as
much as it is collecting The deficit last year was
$9o2OOOOoO This year it is estimated at s24l7OOOOOO;
and next year at $1417OOOoOO. This is voal deficit
of S4440O0000O
The administration promises to cut expenditures
and raise taxes. The estimated savings in actual ex-
penditures next year is 1855 100000 But half Of this
fiscal year remains and the estimates for next year
must 90 through the hands of congress. There will
be necessary deficiency bills and special appropria-
tons. There is no drastic pruning of bureaucratic
expenses There is no provision for federal unemploy
ment relief.
Only $377OO0O0O is asked for public works next
year while it is estimated $41o583OOO will be spent
this year and 900 actually spent the year
before. Congress undoubtedly will have something
to say about this proposed cmtament Of joh-giving
work.
Naval building this year will be the greatest in any
year for the last ten. Although appropriations osten-
siby will be less expenditures will amount to $751;,
100000. Appropriations asked for national defense
total $644OOOOOO an ostensibe reduction of $51OOO
OOO but an increase when allowance is made for the
usual deficiency appropriations and the lower prices
of commodities.
The federal trade commission suffered most in the
general pruning losing half million from it's current
appropriation of $1761 OOO Progressives and others
will want to know whether not this is an attempt
to throttle the commissions electric power inquiry.
The President proposes to spend less for activities
connected with labor while should be spent al
this time as a measure of relief. All scientific and
general research activities likewise have been cut far
more than the rest.
Congress should and doubtless will make readjust
ments in these and other items.
The tax program is severe and affects persons with
small incomes as well as the very rich. There is no
expectation that the budget be balanced this year
or next but Hoover and Mellon believe that with bust
ness Improvement next year should be on an even
basis the year following Business may not revive
sufficiently to yield the expected additional tax reve
nues
In that event, congress should not accept Hoovers
two-year limit on the tax increase The tax system
have been using permitted excessive cOncentra-
ton of wealth which was basic cause of the eco
nomic collapse The new tax SYSTEM shifting more OF
the burden from the poor to the rch should be re-
tanned until it checks this dangerous overconcenra-
ton of wealth and until it pays off the large emer-
gency appropriations for unemployment and business
relief.
The 1924 tax law serves as basis for the Hoover
Mellon proposals. This law a modification of war
time laws and was quite different in conception from
our present statute The number of taxpayers nearly
will be doubled Every single with an income OF
more than $1,000 and every married man with an in
come of more than $780, will pay his share the
amounts increasing progressively as income increases
The present surtaX maximum rate of 20 per cent will
be increased to 40. Certain special taxes annoying
and burdenSome, but necessary, will be imposed.
In proposing revival of the tax on estates Mellon
departs from his 1924 model and goes to the law OF
1921 The 1924 rates imposed tax of 40 per cent on
estates OF over $1OOOOOOO. The 1921 rates were Is
per cent on such estates This tax is of the most
effective means of preventing the accumulation of ex
ceve fortunes and should be raised to the 1924 level
Likewise Mellon should be asked to explain why he
would not revive the so-called gift tax designed to
prevent evasion of the estate tax through diStribu
ton of great fortunes before the death of the owner
The government will find the people willing to pay
higher taxes If the fruits of their sacrifice wisely
used to meet national distress and economic rehab
itation