Evening star., 1934-04-05
The Political Mill
By C.. Could Lincoln.

with the idea Of being q revision Of
the administrative features Of the in
come tax law, plugging up the holes
by which much wealth escapes tax
alton, has assumed real proportions.
The bill as it was reported to the
Senate by the Finance Committee,
was calculated to raise an additional
| $3.50, 900 900 revenue. OF course, this
money does not come out Of the air,
but out of the pockets Of American
taxpayers. More revenue is needed.
because of the huge expenditures by
/ the Federal Government for relief.
The political side Of taxation is
usually bitter in the mouths Of the
politicians. However, If taxation can
be so arranged as to fall on the small
est number Of persons its political
effects are believed by many to be
minimized. Whether this Is true or
not is another matter, for the rich
usually have found some way Of pass
| ing the taxes on to the poorer, and
the net effect Of higher taxes is an
increased burden on the whole people.
Without criticizing the tax legis-
lation and admitting that increased
/ taxes are needed, it Is entirely pos
sible to estimate the effect Of addi-
tional tax legislation on the minds
of the people who have to pay the
taxes. They do not like it. This
pending tax bill may be wrapped up
I, in cotton wool, 1t may be made as
palatable to the great mass of people
as it can be, and still 1t has its po-
tential effect on politics.
The fight in the Senate has been
waged fiercely over income tax levys,
estate and gift taxes. The demand
has been made by Senator La Toilette
Of Wisconsin for higher surtax rates
on incomes. He demanded q normal
rate Of 6 per cent and surtaxes run
ming up to II per cent. And he
figured that his amendment would
bring in about $1S5. .000. 900. Dealing
with estate taxes, the Wisconsin Sena-
tor succeeded in putting in the bill .
compromise rate which boosts the
maximum estate tax rate to 60 per
cent, with the exemption lowered
from its present $4,000 to $4,000.
He would levy the same kind Of taxes
on gifts. Talk about redistribution
| Of wealth, these proposals II written
into law viii have something Of that
/ effect. The only dificulty about 1t
all is that the money Is taken from
| the wealthy and turned over to the
Federal Treasury. This does not nee
essarily mean that the money will find
its way into the pockets Of the needy,
except through the "doles," the direct
relief. 1t Is true that some of 1t will
60 out to workers engaged on public
work projects and to manufacturers
who are supplying materials.
Before the fight over the La Toilette
amendments was really under way the
Senate adopted some income tax
amendments offered by Senator Harri-
son, chairman of the Finance Com
mittee, which increased the surtaxes
in the lower brackets by per cent.
For example, as the bill passed the
House, the surtax on income over
| $4,000 was per cent, and jumped to
per cent above $4,000, etc. Under
the new amendment the rates is per
cent over $4,000 and 7 per cent over
$4,000 and so on. These rates will
touch the pocketbooks of the great
mass Of professional and business men
whose incomes range from 5000 to
| $4,000. Furthermore, the bill now
carries a per cent capital stock tax
and per cent excess profits tax.
These amendments, while they do
increase the taxes on wealth." do not
go nearly as far as some of the pro-
ponents of the redistribution Of wealth
and the leveling process desire. But
enriching the Government at the ex-
pense of business and individuals Of
great and lesser wealth seems q
clumsy way Of going about redistribu-
ton. which really means an increased
purchasing power for the poorer men
and women. II some plan could be
devised whereby the compensation for
actual services could be increased and
dividends on the investments of the
people could be raised, 1t would be
far better than merely putting the
money into the Government Golfers.
1t Is dollars to doughnuts that the
workers Of the country and the people
OF moderate means would not under
take to put money. If they had more
Of it. into q lot of public works for
which they have no particular desire
anyway. They would put the money
into better schooling for their children
and more comforts for themselves.
The excess profits tax, levied during
the war and Immediately thereafter,
did more to bring about greater dis
tribution Of wealth to the workers
than any other form Of tax, because
the money did not go into the Govern
ment Treasury. but the employers pre-
ferred to pay it to the workers in in
creased wages. The return to the
excess prof1ts tax now may have some
thing the same effect.
4 4
While the progressives in the Senate
and House are doing their best to levy
higher taxes on the rich in an effort
to raise money for the Government,
movement Is on foot to start a
Government lottery for revenue pur-
poses. Representative Kenney Of New
Jersey is the author Of such a bill
and there is to be Z hearing on the
measure before long. 1t is not likely
that any plan more likely to make it
possible for the rich to escape higher
taxes than Government lottery could
be discovered, although such an end
may be farthest from the thoughts of
Mr.. Kenney. But 1t seems quite clear
that the lottery tickets, sold by the
million throughout the country, would
not be purchased by the wealthy.
They would be purchased by the poor.
And the revenue raised by the plan
would come from the poor or the
people Of very moderate means. The
rich man or even the man OF suffl-
cient means does not need to take
any such gamble.
Despite public protestation by the
chairman Of the Democratic National
Committee, Postmaster General James
A. Farley. that the administration is
0n3rU RI ko~ L.