Montana labor news., 1933-05-04
WAR DEBTS AND THE TAXPAYER

Further revision of world war debts is at present on
posed by many public-spirited citizens on the ground that
an increased burden would be placed upon the American
taxpayer. 1t is true that the problem of taxation is one
of increasing concern to American citizens. National
income has been drastically cut and widespread umem-
poyment has greatly reduced the total number of tax
payers. The burden Of governmental expenditures,
therefore, which Congress and local governments have
thus far failed to reduce materially, bears with increas-
ing severity upon those who remain in the tax-paying
class.
On the other hand, it would appear to be false econ
omy to insist upon debt maintenance at a level at which
payment seems improbable, at the risk not only of re-
%pudiation of the entire obligation, but also of loss of the
beneflts which might accompany a reasonable COM
promise.
The premise that revision of war debts will increase
the problem OF the American taxpayer is wholly short
sighted and misleading, and political in origin. If the
debts were cancelled in full, the American taxpayer
would be called upon to pay less than 1925 per capita
for interest and amortization in addition to the conces-
siOns already made. However. the burden of taxation
lies not in the actual sum which must be raised, but in
the relation of that sum to total national income.
over the past three years the national income has de-
clined by fifty per cent. Government expenditures have
risen while this was going on, and there is not much hope
OF reducing them more than 25 per cent, even with the
utmost effort. The problem of taxation, therefore, is
one OF restoration of national income, both in the size
OF the individual income and in the number of individual
taxpayers.
We have attempted to bring out the fact in previous
articles that recovery of business in America cannot be
accomplished independently of the rest of the world; we
~ SPSiNSi NPOh IL OI Ca
port trade. The present status of war debts constitutes
a major impeachment to international trade, and hence to
renewed prosperity.
If revision of war debts would help to bring back our
lost world trade it would certainly constitute no burden
upon the American taxpayer. With increase in trade
and industrial activity national income would rise and
our own capacity to pay" be enhanced far beyond what
we can ever hope to receive from war debts. Stimulation
OF business activity would cause the problem of the in
dlvldual taxpayer to decline in Importance, and the bur-
den OF excessive taxation on the country as a whole would
be largely lifted.
The taxpayers Of America should understand that it
is OF no value to endeavor to collect a few hundred mil
hons yearly from foreign nations when by so doing a
train of economic catastrophe is set in motion which low
es by billions our own ability to raise taxes, reduce sal
aries and employment and may result in a permanently
c%urtailed standard of living. Refusal of Congress to
reconsider war debts in the light of their effect upon
international and domestic trade would constitute gross
negligence, and America cannot afford the type of DO
litical leadership which would pinch the penny and lose
the pound.
ID. B. Robertson, President,
Brotherhood of Locomotive Firemen and Eneinemen.