The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-06-07
phone-RIley b551
WEDNESDAY. JUNE 2. 1893.
A HALFWAY TAX BILL


a BETTER and fairer tax plan can be
passed by the senate than the one in the
administration bill reported out by the
nnance committee
In contrast to other parts of it's strong new
deal program, the administrations tax plans
have been weak from the beginning. None
of these Official plans has held to the Demo-
cratic platform pledge Of a tax system based
on the principle Of ability to pay.
1t is true that the President turned thumbs
down on the defeated general sales tax when
the Republican old guard and certain Demo-
Gratis tried to revive the fight in the house.
For this Mr. Roosevelt deserves credit.
lie has saved us at least from the worst
form Of an insidious. disguised and indirect
tax which rests heaviest on the poor and which
Is most difficult to repeal, once it has been
fastened on the country.
OF the four original alternative plans sub
mitted to the house by the administrator,
the three which did not include the general
sales tax were based on an increase in normal
income and special consumption taxes.
The normal income tax burden falls with
most weight on the salaried middle class. That
class should be made to carry a heavier load
only after the rich have paid more through
surtaX increases The proposed consumption
taxes whether on breakfast necessities or gaso-
line, OF course hit the poor man hardest, the
middle class next, and the rich least.
This system, in other words, is an exact
reversal of the platform pledge of taxing on
the principle Of ability to pay.
Fortunately, the expose of NIorgan's failure
to pay income taxes provoked so much public
resentment that the administration junked
most of the house plan in favor of a half way
reform now reported out by the senate COM
mittoe
This new administration bill would raise
$227OO0OOO as follows: Tax Of Ito Of / per
cent on capital valuation of corporations, plus
a 5 per cent tax on profits over 1919 per cent,
to yield $80000000; a per cent tax on divi-
dends, collected at source to yield $4,000 900;
addition tax of y cent a gallon on gaso-
line, to yield S620OOO00; administrative
changes in income tax laws to yield $15OO0,OOO
The administrative changes to plug some
of the holes through which the Morgans and
others have escaped all income tax payment
are admirable
The additional tax on gasoline is inexcus-
able 1t is sales tax already pre-empted by
the states and already worked to death, as
shown by the house report on double taxation
Automobile taxes of various kinds already
amount to more than $1OOOOOO,OOO a year
State gasoline taxes alone are more than half
a billion dollars.
In addition, there are the duplicating city
and county gasoline taxes and the duplicating
federal gasoline tax of S138,OO0OOO. The con-
sumner is paying. These combined taxes &C
count Tor 48 per cent of the retail price of
gasoline
On the wholesale price, these levies amount
to sales tax running in different parts of the
country from 1876 to $40 per cent. Under these
circumstances, to propose additional federal
gasoline taxes is absurd.
The provisions for per cent tax on divi-
dends the Ito of per cent tax on corporation
capital values and excess profit tax, are all
good as far as they go. But to raise enough
revenue and to carry out the Democratic plat
form pledge of taxing according to ability to
pay, all those taxes should be graduated up
ward progressively as in the case of the normal
income tax.
Not only should the excess profit tax be
graduated but it should begin with profits of
or 9 per cent rather than 1919 per cent.
Finally, the surtax on individual incomes,
especially in the upper brackets, should be in
creased.