The Western news. [volume] (Libby, Mont.) 1933-current, 1934-10-04
SEEN~d HEARD
around the
National Capital
5By CARTER FIELD


Washington.-A definite program
Tor new taxation TO be recommended
to congress In January is being worked
out by experts In the Treasury depart
ment despite the bland assurance Of
Senator Pat Harrison Of Mississippi,
chairman Of the senate finance COM
mittee, that no new taxes will be
needed.
In fact, the program, with few ex-
cepti0ns, is almost frozen" already.
The goal Is half billion dollars more
revenue annually-or at least until
the present need passes. It will be
recalled that President Roosevelt
pointed out months ago that 1t was
the drought relief cost, estimated then
at $525,00O,0O0 that upset his budget
balancing program.
One OF the striking features of the
new tax program Is 4 new excess prof
Its tax, graduated on much the same
line as the income tax brackets, SO
that 1t will hit the big profit makers
harder than those corporations max
Ing smaller profits. This, of course,
will be In addition to the already very
heavy corporation income taxes.
An interesting feature of this pro-
posal Is the theory behind II, involv-
Ing regulation by the government of
business. prices, labor costs and
profits. Not long after the war
the government deliberately strapped
the then existing excess profits
tax, which had been imposed with
view to getting at war profiteers.
1t had been thought too difficult
and tlnewastlng In the rush of war
preparation to battle too much over
prices paid for supplies. SO this tax
WIS devised with 4 view of catching
any contractors or manufacturers who
made too much money as result OF
this more or less open-handed buying
by the government.
But after the war 1t was discovered,
In very careful Investigations made
under the direction of Senator Arthur
Capper OF Kansas, that the thing just
didn't work the way 1t had been In
tended. Especially when the ordinary
citizen and not the government was
the buyer. 1t was found that prices
were pyramided to include the excess
profits tar and still give the seller en-
tirely too large profit SO the tar
was repealed.
Now 1t h to be reinstated, but with
the conviction that government regula-
ton Will prevent any such results.
To Cut Exemptions
Another provision of the new tar
program, the writer learns. would re.
duce the present exemptions for mar
ried persons from $500 to $1,000 and
for single persons from $500 to ST..
600. Still another Is sharp raise In
rates on the lower income brackets,
the rates on the higher brackets hav-
Ing already been stepped up consider
ably from the low to which they had
been reduced under the Mellon regime.
In fact practically back to war levels.
This new tax on the "lower middle
classes" as 1t was called by a sena-
tor who learned about the program
by accident, Is apt to produce real
fight In congress unless President
Roosevelt cracks the whip too hard.
1t Is the one detail Of the plan that
may find rocks ahead, In the private
views even of the experts framing 1t.
For 1t Is not regarded as particularly
good politics, however sound may be
the economics. There are too many
voters In these classifcations.
Incidentally, some of the old heads
In the revenue service always have
contended that the difficulty and ex-
pense of collection In the very low
brackets did not make up for the bur
den imposed.
Taxation on corporation surpluses
Is another feature of the proposed pro
gram This Is an old hobby OF the
President. He indicated his thoughts
on this subject as far back as In his
acceptance speech before the Chicago
convention, and has made frequent
references to 1t since.
He believes that this piled up sur
plus" was very close to the genesis OF
the depression. Had 1t been paid out
In wages. In reduced prices. or even
In dividends, 1t would have produced
greater buying power, he has pointed
out.