Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-20
Presidents Tax Message
Congress Is asked to adjust System So as to Impose
Greater Share of Burden Upon
Large Fortunes.
Large Fortunes.

states:
AS the fiscal year draws to It's
close, it becomes our duty to con-
slider the broad question of tax
methods and policies. I wish
to acknowledge the timely efforts
Of the Congress to lay the basis
through its committees for admin
istrative improvements, by careful
study of the revenue systems Of our
own and Of other countries. These
studies have made it very clear
that we need to simplify and
clarity our revenue laws.
The Joint Legislative Committee,
established by the revenue act Of
1926, has been particularly helpful
to the Treasury Department. The
members Of that committee have
generously consulted with admins
trative officials, not only on broad
questions of policy, but on impor-
tant and difficult tax cases.
On the basis of these studies and
Of other studies conducted by
officials Of the Treasury, am able
to make a number Of suggestions
of important changes in our policy
Of taxation. These are based on
the broad principle that If a
government Is to be prudent its
taxes must produce ample revenues
without discouraging enterprise;
&c 20 ha i1rc a. die.
tribute the burden Of taxes equi-
tably. I do not believe that our
present system of taxation COM
pletely meets this test. Our reve-
nue. laws have operated in many
ways to the unfair advantage OF
the few, and they have done little
to prevent an unjust concentra-
ton of wealth and economic power.
With the enactment Of the in
come tax law Of 1918 the Federal
Government began to apply effec-
lively the widely accepted principle
that taxes should be levied in pro-
portion to ability to pay and in
proportion to the benefits received.
Income was wisely chosen as the
measure of benefits and of ability
to pay. This was and still is a
wholesome guide for national policy.
It should be retained as the gov
erning principle of Federal taxa
ton. The use of other forms Of
taxes Is often justif1able, particu-
larry for temporary periods; but
taxation according to income is the
most effective instrument yet de-
vised to obtain just contribution
from those best able to bear it and
to avoid placing onerouS burdens
upon the mass Of our people.
Production and Markets.
The movement toward progress
sive taxation Of wealth and Of in
come has accompanied the growing
diverSifcation and interrelation Of
effort which marks our industrial
society. Wealth in the modern
world does not come merely from
individual effort; it results from
a combination of individual effort
and of the manifold uses to which
the community puts that effort.
The individual does not create the
product of his industry with his
own hands; he utilizes the many
processes and forces of mass pro-
duction to meet the demands Of
national and international market.
Therefore, in spite Of the great
Importance in our national life Of
the efforts and ingenuity Of un-
usual individuals, the people In the
mass have inevitably helped to make
large fortunes possible. Without
mass cooperation great accumu-
lations of wealth would be impos-
sible save by unhealthy speculation.
AS Andrew Carnegie put it, Where
wealth accrues honorably, the peo-
pie are always silent partners"
Whether it be wealth achieved
through the cooperation of the
entire community or riches gained
by speculation-in either case the
ownership of such wealth or riches
represents a great public interest
and a great ability to pay.
I.
My first proposal In line with
this broad policy, has to do with
inheritances and gifts. The trans
mission from generation to genera
ton of vast. fortunes by will,
inheritance, or gift is not consistent
with the ideals and sentiments Of
the American people.
The desire to provide security
for ones self and ones family is
natural and wholesome, but it Is
adequately served by reasonable
inheritance. Great accumulations
of wealth cannot be justified on
the basis of personal and family
security. In the last analysis such
accumulationS amount to the
perpetuation of great and unde-
sirable concentration Of control in
a relatively few individuals over
the employment and welfare OF
many, many others.
Such inherited economic power Is
as inconsistent with the ideals Of
this generation as inherited po-
litical power was inconsistent with
the ideals of the generation which
established our Government.
Creative enterprise is not stimu-
lated by vast inheritances. They
bless neither those who bequeath
nor those who receive. As long ago
as 1907, in a message to Congress,
President Theodore Roosevelt urged
this wise social policy:
"a heavy progressive tax upon
q very large fortune is in no way
such a tax upon thrift or industry
as like tax would be on small
fortune. No advantage comes either
to the country as a whole or to the
individuals inheriting the money by
permitting the transmission in
their entirety Of the enormous for
tuns which would be affected by
such a tax; and as an incident to
its function of revenue raising,
such a tax would help to preserve
q measurable equality Of oppor-
tunity for the people Of the gener-
ations growing to manhood"
Tax on Static Wealth.
A tax upon inherited economic