Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-19
LEADERS AGREED
ON TAX INCREASE
Little DiSSension Exists on
Need for Higher Levy on
Upper Brackets.
BY MARK SULLIVAN.

With practically universal, if re-
1uctant, recognition of the condition
that there must be a revision upward
of tax rates by the coming Congress,
the one concrete detail of the ball about
which there can be any certainty is
that there will be a stiff increase of
the rate on large incomes as well as
the rate on large inheritances.
To this detail of taxation there is
very general assent. One finds it in
varying degrees among both wings Of
both parties, progressive Republicans
and conservative Republicans, proges-
sive Democrats and conservative Demo-
Gratis. OF outright opposition there is
comparatively little.
What opposition there Is is not
strong resistance to raising of the rates.
1t is confined rather to desire to see
that the raise be kept IN such proper
tons and managed in such a way as
not to defeat itself, and that otherwise
the thing be done with care.
Want FederaI-State Harmony.
For example, conservatives. while
agreeing the rates on large incomes and
inheritances be raised. will try to see
that the Federal income tax combined
with the State income tax on the same
income shall be harmonized and kept
within reasonable proportions. The
same effort will be made to avoid over
tapping of State and Federal taxes on
the same inheritance. In the same
spirit, an effort will be made to see
that the tax on large inheritances,
which is essentially taking Of part OF
the country's permanent capital, shall
for that reason be devoted not to pay
ing the Government annual expenses,
but solely to the retirement OF the ma
tional debt.
It is to this sort of thing that the
conservatives will chiefly devote them
selves. It is remarkable to discover
among Representatives and Senators
the near ness to universally OF the SEN
timent that there will be some raise
in rates on large incomes and large
inheritanceS. A decisive majority In
both parties believe in such increases
under present conditions, and Will vote
for them. Those who do not believe
in them, or question their wisdom, are,
nevertheless, satisfied that the in
creases will come anyhow. The in
creases may carry the rates TO de-
cidedly high figures.
Mclean Makes Proposal.
There is not as yet any oficial pro-
posal from either party or any source
as to what the new rates should be.
There is distinctly sign OF the spirit
of the times in carefully stated pro-
possl, made by ex-Gov. Angus w: NC
Lean of North Carolina and 1ndorSed
by the Raleigh News and Observer, of
which the editor is Josephus Daniels. |
Secretary of the Navy in the Wilson |
administration.
Ex-Gov. Mclean does not belong |
among those Democrats who by any |
straining of the word can be called |
radical He is either president, direc- |
tor or chairman of the board Of two |
he kF1nct and q mint L
stock land bank. He Is likewise a |
manufacturer and q director of ma
tionally known corporations. He was |
an oficial Of the Federal Treasury dur |
ing the war period. Personally he Is
surefooted and as Scotch about finance |
as he Is in blood.
Mr.. McIean's carefully stated pro-
posal is that the combined income tax
for both State and Nation shall be $50
devised that the Nation and State will
receive at least one-haf of all indi-
vidual incomes amounting to 81 ZOO, 900
or more, from whatever sources de-
rived"
Proposal Is Temporary.
His proposal Is for the period OF the |
depression only. He says that II adopt |
ed it will within year ameliorate |
and gradually tend to overcome this |
depression"
AS to taxes on inheritances, ex-Gov. |
McLean's proposal Is that there shall |
be "a partial redistribution Of wealth |
by means Of death duties or inher- |
itance taxes, so designed that one |
fourth of the value Of every individual !
inheritance or share in an estate shall |
be returned to the State, provided such |
share amounts to 81 100000 or more,
the proportion or rate to be graduated |
downward as the value of the share or |
interest decreases, with reasonable ex- |
emptions for widows and children along |
existing lines"
Because so large an inheritance tax |
Is in effect taking of capital, Banker |
Mclean carefully provides that the pro- |
ceeds of this tax be used by the State |
or Nation in the manner in which alone |
capital should be used, namely, 1.-The |
proceeds of all such duties or taxes to |
be used exclusively for retiring bonded |
indebtedness, thereby constantly reduc- |
ing debt service"
This proposal may be regarded as
coming from the distinctly conservative |
wing Of the Democratic party. It does
not differ very materially from the at |
titude of a majority Of Republicans in
Congress. In short, it Is certain there
is going to be an increase In rates Of
taxation on incomes and on inner |
itances. The tax revision will coincide
with and, therefore, be affected by q
time of treasury deficit and general
economic distress. The result Is certain
to be high rates. Accepting that, there
is much reason to believe that the de-
tails Of the application Of the new rates.
and the duration of them, will be so
managed to do the least possible
harm tr eountry's business struc-
ture.