Evening star., 1932-05-18
Opposes Exemptions
On Government Bonds

To the Editor Of The Star:
Almost every one at some time or
another has no doubt felt themselves
more capable to meet a given Situa-
tion better than those regularly ap-
pointed. or elected, to perform the task
in question. Being no exception to the
rule, / do not hesitate to express my
utter disapproval Of the various sug-
geStionS emanating from the halls OF
Congress relative to balancing the bud
get. Instead of more laws increasing
the rate of income tax or for the levy
ing OF additional taxes believe If the
Government received all taxes provided
in existing laws there would be little,
or no, difficulty in meeting current ex-
penSes. 1t has been recorded in the
press that returns from income taxes
this year will fall far below the amount
received last year. Can it be possible
there is less money in the country this
year than last? The obvious answer
TO this question leaves only one other
logical conclusion and that is money
on which taxes were paid last year has
IN the meantime been withdrawn from
channels wherein taxes would accrue
and placed beyond the reach Of the
lawn other words. has been with
drawn from industry and placed in
taX-exempt securities. such as Federal,
State. county, municipal and other Sc
curities on which taxes do not accrue
under present law. The only solution
evident to the casual observer is that
the present law should be amended to
remove the exemptions now provided,
either in part or entirely.
The result of such action would, no
doubt. mean that the interest rate on
such securities would have to be raised
to attract capital to them, but, If so,
so be 1.-THE Federal Government and
the governments of the States, counties
and municipalities would have to pay
out bit more in interest, but the addi-
tional taxes received would more than
offset the additional outlay. That prob
lem having been disposed of, let us
turn to another.
II, after having in the above manner
proVfded for necessary additional
revenues, II is still considered eXpedient
to reduce the salaries of Government
employees, let us go about 1t in the
following manner which, l am sure, we
employees would accept without Ques-
tion, and like it, Establish an exemp-
ton, similar to that in the income tax
law, on which there would be no deduc-
tion made-say $4,000 tmy salary Is
substantially above thaD. On salary
received above that amount provide for
reduction of 10 per cent to and includ-
ing $1,000; above $4,000 to and 1nclud-
ing $4,000, is per cent, and so on. In
other words, an employe receiving a
salary of $500 would be cut 10 per
cent on 81 900 and Is per cent on $500.
a total of SITS. One receiving S2,500
would be cut 10 per cent on $500, or
$50. One receiving $4,000, or less,
would receive no cut at all. 1t is true,
probably, that the amount Of reduction
under this plan would not amount to
much, but neither would fiat 10 per
cent on all salaries for that matter. If
some sort of reduction is absolutely
necessary, however, this Is the only
fair way to do 1t and If the necessity
can be demonstrated to us, I believe,
as have previously said, we would take
cut like this and like it. or at least
try to make ourselves like it. Any other
plan would create inequalities In pay
which would take years to iron out.
And now let me mt 1tsmSge3 gtrM8ht.