Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-09-11
Taxes.

Declarations bv such Stalwart Re
nublicsns as Senate" David A. Reed OF
PENNSYLVANIA and Representative Isaac
Bacharsch Of New Jersey that the
time has come to increase Federal taxes
in order TO balance the budget ana
wtpe out the present deficit In the
Treasury were today considered hlgnlF
significant. limitations haze come from
administration sources in recent weeks
that the President and Secretary Mellon
81 the Treasury were giving consider
alton to the question OF tax increases
at the coming session OF Congress
Reed is member OF the Senate Finance
Committee and Bacharach Of the House
WAYS and Means Committee. which
handle all revenue measures, and which
gives added weight to the views eH-
pressed by these gentlemen.
The demand for q pay-as-you-go plan
of meeting the expenditures OF the Gov
eminent of this country is increasing.
despite the insistence of many members
OF Congress that it is unWise at this
time to raise the tax levies higher and
that 1t IL possible for the United States
Government to borrow all the money
that it may need 10 meet its expendi-
lures The President Is already on rec
ord in favor of cutting down govern
mental expenditures. which absolutely
should be done under existing circum-
stances. But such cuts are not Likely
10 fill this particular bill. There mus
be, eventually, increased revenue. The
hope has been that with return OF
business. more revenue would flow into
the Treasury. Unfortunately, however.
such revival in business as has so far
occurred has not been suficient to In
crease revenues.
Reed and Bacharsch, in advocating
increased taxes. have taken vastly diff
ferent viewpoints. The Pennsylvania
Senator has come forward with pro-
posal that q general sales tax OF one
half Of one per cent on all retail sales,
estimated to raise total OF $4,000
600 coo revenue, be levied. Mr.. Bacha-
creases in the taxes on the bigger in
comes and estates. He would sup
plement the estate tax with a GIFT tax
n prevent the evasion OF the estate
tax py the owners of huge estates.
Mr.. Bacharach is willing to impose
taxes on certain Injuries. but that Ia
as far ss he would go in the matter
of sales tax.
general sales tax on all retail
purchases would be not only unpopular
but a poor remedy to meet q situation
in this country which has been dag
nosed as psychological in part at least.
Increased sales. 1t has been said, will
bring increased production. and in
creased production will necessitate in
creased employment To levy tax on
sales under such circumstances seems
the veriest folly. The proposal OF
sales tax is not new. 1t has been
tried out before in Congress and got
nowhere. Proba blv there is no tax
which is not passed on to the ultimate
consumer, and certainly the sales tex
would prove no exception. Further
more such tax would undoubtedly
be multiplied in the passing and the
consumer would bear a greater burden
than the tax itself.
II Federal taxes are increased there is
every prospect that the increase will
be largely made through increasing the
income tax rates. The income tax Is
the fairest tax that has yet been de-
vised. 1t is to the income tax that the
British government has just gone to
raise greater revenue to meet the pres
ent crisis existing in Great Britain. In
addition. the British government has
levied higher taxes on certain nom
essentials, like beer and tobacco. and
upon amusements of all kinds. Should
the United States launch upon tax re-
vision at the coming session OF Con-
Rress to help balance its budget, it, too.
might with wisdom impose taxes upon
the aales Of luxllries and non-essen-
tiaH Such taxes have been levied in
the past to meet emergencies. pa;ticu-
larlv during war.
Secretary Mellon not many weeks ago
declared that the tax system OF the
United States needed repair; that 1t vas
designed to meet the Governments needs
In boom times. but that 1t did not oper-
ate so well in a depression. He indicated
then that a tax system that relied only
upon levy on incomes was bound TO
fail when incomes were materially re-
duced. A great dificulty with the situa-
tion in this country has been the fact
that so many securities issued by the
various governmental agencies have been
declared TO be tax exempt.
II the next Congress is to be field
for tax revision the administration may
well hold its breath and utter a prayer
that the bill which Is drafted may be
such q measure as the President can
approve and not one that Is dictated
solely By politics.
--sS&@s-