Evening star. [volume] (Washington, D.C.) 1854-1972, 1932-03-20
TAX ON EVERYBODY
SOUGHT IN NEW BILL
Revolt In House Shows
Stormy Sailing Ahead of
Finance Measure.
BY DAVID LAWRENCE.

The revolt in the House of Repre-
sentatives against the program of the
Republican and Democratic leadership
is symptom On other troubles that lie
ahead before g new tax bill becomes
law.
Inasmuch as the new legislation is
not to be made retroactive and will not
affect the payment OF income taxes on
earnings of 1881, there really Is plenty
of time for discussion. The only limi-
tation, or, rather, the reason, for early
action. is the desire to settle a major
question which has ramiications in the
whole legislative program.
The vote in the House to restore the
high surtaxes of war time was an in
evitable outcropping of sentiment on
the demand coming from various parts
Of the country that the Government
ought to soak the rich" This doc
trine has been SO widely preached that
1t Is especially popular in times of de-
preston. The only answer that has
been made to the proposal has not re-
ceived much acceptance. 1t is that
rates can be increased to the sky, but
that doesn't mean that revenue will be
forthcoming 1t is estimated. for in
stance, that a negligible number of per-
sons in America today have incomes
over 100000.
Present Tax Law Fails.
The present tax law, which is based
largely on income taxes, has failed by
so per cent to meet the necessary reve-
nueS of Government, and Treasury ex-
pertS insist that increases In Surtax
rates alone are not going to bring in
the revenue needed to balance the
budget.
It will be noted, however, that along
with the proposal to increase surtaxes
In the higher bracket, the plan of the
insurgents includes broadening of the
base so as to include many people with
low incomes who now are exempt.
The effort of the insurgents to place
their reliance once more on income tax
revenues is direct contradiction to
the evidence shown by declining returns
in the past, and is really counter Of
fensive against the sales tax. which Is
the center of bitter controversy.
The cry, Balance the budget" is, of
course, being needed and the only queS-
ton is what tax plan can be devised
that will surely do the job No group
in Congress is going to take the re-
sponsibility of contradicting the facts
as presented by Treasury experts who
have been studying income tax returns
for a decade. These experts are not
political and their estimates about re-
ceipts usually have been found correct.
Since the depression began they have
been particularly exact in their calcu-
lationS about the relationship OF the
tax rate to business conditions. They
now have in their possession virtually
all of the individual income returns for
1881, and all they have to do is apply
theoretically the tax rates proposed In
the House and see just how much in
come would have been forthcoming on
the basis of 1881 income.
Would Touch All Groups.
The difficulty comes in estimating the
indirect taxes, but here again data Is
available in most industries as to sales
and turnover. The debate at present,
and particularly the vote in the House
on Friday. reveals widespread demand
that no group or class shall be spared
the heavy hand of taxation. Even II
the wartime surtax rates are not pro-
ductive, there are lots of members OF
Congress who would like to record their
votes for it so as to be able to snow
their constituents how hard they strove
to tax everybody on the basis OF ca
pacity to pay.
The new tax bill will undergo many
changes both in the House and the
Senate before it gets into conference.
Public opinion in the meantime will
have an opportunity to express itself:
The Democratic leaders are somewhat
uneasy today because they could not
control their following in the House, but
this is due merely to the fact the hear
ings in the Ways and Means Commit
tee we're attended by relatively few
people, and the House itself is not bet
ter informed than the country as a
whole as to the lack of productivity of
income tax rates and the need for some
other method of taxation.
Copyright, 1922