Evening star., 1931-12-04
The Problem of More Revenue.

Within a week President Hoover's
recommendations regarding the need of
increased revenue to meet governmental
expenditures will be before Congress.
These recommendations, 1t is believed,
will call for an increase In Federal
taxa ton and probably for some revision
of the present tax structure to make 1t
a better money raiser in times of de-
preston. The Presidents decision re-
garding tax legislation will not be made
public until his annual message is read
in the Congress. The Secretary of the
Treasury, however, has told the country
that it is a mistake to attempt to rely
almost entirely upon the income tax for
governmental revenues, since it is obvi-
Gus that when business falls off and
values shrink, incomes shrink with
them.
Notwithstanding the soundness of the
opinion advanced by Secretary Mellon
there are those in Congress who will in
Sist that the tax laws be revised so as
to raise all of the needed increased
revenue by means OF setting at new
heights the rates imposed on the larger
incomes. During the two years of the
business depression in the United States
there has been tremendous shrinkage
In the great incomes in this country.
AT the same time there has been a
great shrlnkase in the earnings of in
dustrial corporations, taken as a whole
Efforts to take from the larger in
comes Of the country and from CORPORA
tions the increased taxes required might
not only prove ineffective, but also. in
all probability, would hang a new load
about the neck of American business
now struggling back from the depths
OF the depression.
The business depression has hit hard
not only the worker in this country
but the rich man. For example in
1929 incomes above $4,000. 900 totaled
more than s36O,oO0,0 900 and in 1880
had shrunk to s122,00o,00 plus. Manv
men and women who in the past. have
had incomes considered large TODAY
fnd themselves either destitute or with
incomes barely large enough to meet
moderate living expenses.
The Congress will be faced with the
task OF bringing about tax revision that
shall be just, as well as scientifically
designed to raise the money actually
nee2ed. II there are TO be increases in
the income tax rates, as undoubtedly
Will be the case, there must also be a
broadening of the basis upon which the
income tax structure Is erected. There
VIII be necessity to revise the personal
exemptions permitted with return
more closely to the exemptions al
lowed when the revenue laws of war
days were in effect. At present the
personal exemption is $500 for a
married man or the head of family.
plus s4o0 for each minor or other de-
pendent, and $500 for each single
person.
II the advice of Secretary Mellon is
to be followed, however, the tax re-
vision must 60 further than increasing
the rates on big incomes and spreading
the income tax over more incomes
Excise taxes Of one kind or another
seem imperative. There is substantial
support in both houses OF Congress for
a general sales tax, and particularly in
the Senate. The supporters of such a
tax insist that 1t is not only effective,
but rests so lightly on sales as whole
that it will not prove a severe burden
to the people. A number of the Re-
publicans have declared themselves in
opposition and Senator Robinson of
Arkansas, Democratic leader, In a re-
cent statement took stand against a
general sales tax. However, Senator
Robinson indicated that he might not
be against limited sales tax which
would fall on sales of so-caIled luxuries
or non-essentials only. Such a measure
may prove the ultimate solution,
although advocates of a general sales
tax urge the need Of measure that will
be sure to raise the money required and
point out that diminution in the pur-
chsses of non-essentials might prevent
that result.
The Democratic leader of the Senate
in his statement on taxation declared
against any system of taxation whose
purpose primarily was 'redistribu-
ton of wealth" He is opposed also to
taxation that would be too great a drag
on business. At the same time he be-
lieves that the burden of taxation
should fall in the main on those citizens
best able to carry it. The duty
Of framing the tariff bill will fall
first on the House Ways and Means
Committee, which will be dominated
by the Democrats, and from that COM
mittee will pass to House of Repre-
sentatives Democratically controlled.
The country will await with interest the
action Of the Democratic House in this
position of responsibility.
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