Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-08-01


public relief efforts. At the same
time, he continued, community charity
efforts are hampered by the common
attitude that the Government relief
Is adequate for all needs.
The difficulty Of making up % per
cent now contributed by corporations
would force practically every charitable
enterprise to curtail its budget, Baker
said. Private sources simply would
not meet this need
81 Per Cent Held High.
Baker agreed with Senator Barley,
however, that exemption up to per
cent of net income might be too high
since no corporation is likely to donate
that percentage to such purposes.
H. w. Prentis, Lancaster, Pa, the
next witness. opposed the graduated
corporation income tax on the ground
the slight graduation now proposed is
merely an opening wedge In future
attempts to increase the graduation.
ouCIl OH AlC SoAo' 40 oAAASN 80
the share the-wealth dreams being
circulated at present.
In addition to voicing this opposi-
ton, Prentis called for administration
efforts to balance the budget and aid
in restoring business confidence.
The hearing then recessed until
tomorrow morning.
Text Of Statement.
The full text Of Secretary Morgen-
thau's statement follows:
II am pleased to respond to your
invitation to appear before you and
to discuss briefly pending tax pro-
posals. On July 8 had an oppor-
tunity to make a statement to the
WAYS and Means Committee OF the
House of Representatives. which was
then about to begin preparation of
a tax bill to give effect to the rec
concentrations contained in the Presi-
dents message to the Congress OF
June 10. That statement summarized
the Treasury's position with respect
to the Presidents recommendations
and I should like to have you regard
1t as a part of my statement here to-
day
The President. in the message to
which l have referred. stated that his
recommendations were based on stud
les of our tax system carried on in, the
Treasury Department as well as the
excellent research work done by the
staff OF the Joint Committee of Con-
gress on Internal Revenue Taxation.
All of the data gathered by the Treas
ury Department will of course be made
freely available to your committee. !
should like to refer particularly to
studies carried on by Mr.. Robert H.
Jackson. counsel Of the Bureau of In
ternal Revenue. Mr.. Jackson has
summarized and analysed a great deal
of data from income tax and estate
tax and returns which bear directly
on the Presidents recommendations.
He is prepared to present this sum-
mary and analysis to you.
Scope of Data Shown.
IT shall not attempt to review the
data that has been gathered, but
only to indicate its scope. 1t deals
with such questions as these:
The extent to which our national
revenues are now derived from taxes
laid directly on the consumer and
the extent to which they are derived
from taxes based on the ability to pay
The changes in the balance of
taxation as between these two classes
that have been brought about by the
depression and other causes within
the last few years.
THE distribution of income and
the degree of concentration of high
incomes.
The effectiveness Of income tax
rates as modified by various devices
for escaping taxation.
Whether existing surtax schedules
are fully consistent with the principle
of ability to pay.
The actual yield of present estate
taxes as related to the size Of estates.
Devices for avoiding estate taxes.
Problems of administering and COL
lecting an inheritance tax.
Stability of yield of graduated
corporation income tax as compared
to stability of yield of fiat tax rate.
Extent of the concentration of
income and Of assets in the hands Of
large corporations.
Willingness to Aid Cited.
81 cite this material merely to
indicate the willingness Of the Treas
ury to offer such assistance to your
committee as you may desire.
in conclusion, I want to add an
earnest word as to the Use Of which
any additional revenue that the pro-
posed new taxes will produce should
be put. Ordinary expenditures for
the general purposes D: government
have been held within the revenues
We have incurred ard are mourning
large emergency expenditures accord
ing to a carefully planned program
for the sole object of caring for
the urgent needs of our citizens and
promoting recovery.
Additional revenue which will nee
eSsarily fall short of meeting our full
needs will not warrant new or addi-
tional expenditures outside our budget
plans. Any such new or additional
expenditures would not conform to
the best interests of the national
credit. hope the Congress will pro-
WHERE To DUNE