Evening star., 1931-12-13
MILLS OUTLINES REASONS
FOR INCREASES In TAXES
Undersecretary of Treasury Discusses
Government Finances i'm Radio
Forum Address.

! needS OF the situation with due OBJ
servance of sound financial principles
and without any impairment of the
national credit, by the adoption of q
program which would aim at three
definite detectives: first, reduction In
the prospective deficit for the current
! fiscal year: second, no further increase
IN the public debt in the fiscal year
/ 1893; third, balanced budget in 1884
Existing conditions would not. in my
/ opinion, justify a request for more, and
/ we should have failed in our duty had
we recommended less.
Return to 1924 Act
The Treasury has based its program
IN the main upon the REIMBURSEMENT of
the principal tax reductions which have
| been effective since the revenue act
OF 1924. 1t has, in short. recommended
returning In principle to the general
plan OF taxation existing under that
act, with such changes as may be ap-
proprlate in the light of temporary
conoltlons, the new measures to terni-
nate at the close of the fiscal wear
1888. The public has paid taxes under
sucn law, and the Treasury can ad-
minister it more expeditiously and eff
1ectlVely than would be the case with
new and untried ventures In our
Garner experience with such taxes. they
olo not constitute by any means an
unoearable burden, nor did they pre-
vent increased prosperity. Although it
Is perhaps unne 3eSSary. l wish to point
out that, although the proposal is
MADE to cover the two coming fiscal
years, 1t should not. of course, be in
terpreted as implying an expected con-
tlnuance of depression during that
period. 1t will not be until the fiscal
year 1884 that income taxes will De
Tree from the influence of severely de-
pressed incomes for the calendar var
1881. The program should be consid-
ereo rather as provision for repairing
the gap in our revenues-actual and
IN prospect-which conditions to date
have created
II Is unnecessary to describe the
program in detail. Doubtless all of
you have read 1t. Generally speaking
IL provides for the retention, and IN
some instances, an increase in existing
excise taxes, a restoration of the man
ufacturerS' sales tax on automobiles
trucks and accessories, of the stamp tax
on conveyanceS of realty and of the tax
on telephone, telegraph. radio and cable
messages, and the imposition of new
taxes on manufacturers sales of radio
ana phonograph equipment. and on
checks and drafts. The rate of tax on
corporate income is increased but
Sllghtly, from II to 1917 per cent. A
return 10 the 1924 act necessarily in
wolves sharp increase In the rates
applicable to large incomes and the
taxing of some taxpayers who since
1874 owing to very high exemptions
nave been relieved from the Obligation
OF contributing to the support of their
government, though enjoying a very
genuine ability to contribute Certainly
the very moderate amounts demanded
by the 1924 act.
Underestimate Intelligence.
l have been told by some gentlemen
that. from political standpoint we
are making a terrible mistake in re-
oucing exemptions. Aside from tho
TACT that, under existing circumstancas
! cannot concede that politics has anv~
thlhg 10 DO with the drafting of a
revenue Dill, l think those gentlemen
underestimate the intelligence and pa
IrlotlSn1 OF the American people Other
nationS' confronted with difficulties in
LItey greater than Our own. have
re' eiie heeas OF their government to
an unheard of extent without protect
or murmur. F-0''''
am confident that once the naces-
sities OF the situation and the min
clples that are at stake are under
stood' cur taxpayers will respond with
equaI Willingness and, if not cheerfuIIv
aI least without complaint.
Even III these days which appear so
oark' we are still fortunate as con-
OraSteo with other nations. For in
stance, available information indicates
that In this country Federal and IoceI
taxes combined are about 10 ner cent
OF the national income, while in Enoe
Iano total taxes are about % ner cent
OF lhe national income. After all cor
De lalrly contended in such an en,er-
sency mat married man, with an
tn1olne t OF $4,000 a year, cannot con-
- iouN SIo.oO, or less than one-half of
per cent OF his income, to the sun
VI HS government, or one with
.,1 an income OF 50 900, $3.50, or slightly
with an income of $4,000 s153 wbIcb
Is only ~ per cent of his total incor,e3
Not IntoIerabIe Burdens
When We come to the r,isce1Ia,ao,,.
group, the rates are not So hiob as 10
interfere with the flow of eoodS w
services, or to constitute a real bIr6e,,
on those who buy or enjoy them Can
we seriously complain if cigarettes and
raolos and admissions to places Of
aInusement-yes even if semi-neces-
siCleS such as automobiles-are to cost
q tiiIe more or if We are to paw 2
centS Ior the privilege of using checks
ana an additional cent on the trans"
Ter OF securities? These are not intoI-
cradle burdens especially when we are
asked to assume them 10 maat tho
necessities of real emergency.
We shall emerge from this denrsss,or
as we have emerged from depressions
IN the past. We shall do SO siI the
earlier and with greater certainty If
we face the realities of the situation
squarely, deal with them intelligently
and courageously and proceed to follow
the rinht ,.ond o,.o.. Il :. 10y ="