Evening star., 1935-08-11
BY ALLEN RAYMOND.

TIME uncertainties of business
men in the face Of threatened
new Federal taxation, based on
"soak-the-rich'' policy are
seriously hampering them in their ef-
forts toward business recovery, in the
opinion OF H. Gerrich Smith, president
of the National Council of American
Shipbuilders. Not only would the pro-
posed Roosevelt tax program itself
prove blow to business were it en-
acted, but the very fear of the new
taxation is in itself detriment to the
Nations commerce.
Business In this country needs a
rest, right now, from uncertainties
about Government" he said. "If it
could know the conditions ahead of it,
it would be in splendid position to
advance very rapidly. There is great
stored-up demand for goods. There is
plenty Of money available. All bust
ness needs at the present moment is
more confidence about the immediate
future, and the prospect of this soak
the-rich' tax measure is naturally
damaging to confidence.
Finds Rich Soaked" Already.
II believe the whole theory of the
thing is fallacious 1t is certainly fall
lacious to think that just hitting at
large fortunes and large incomes will
suffice to pay the country's taxes. The
fortunes and the incomes aren't big
enough to do it.
THE rich have been soaked al
ready and soon they won't have any
thing left to soak What is really
needed as general policy in taxation,
I believe, is a broader tax base"
Mr.. Smith said he personally favors
adoption of a Federal sales tax, cou-
pied with graduated income tax, as
the soundeSt way to raise Federal
revenues. 1T is certainly just for the
people with the largest incomes to
pay the largest taxes" he said, but
there is danger in even taxing large
incomes too steeply. 1t discourages
commercial enterprise, which is the
real source of all the wealth there is
to tax"
He was sharply opposed, he said, to
stepping up the tax rate on corpora
tions, according to the size of their in
comes. In the case of the Nations
shipbuilders, he said, their profits on
Government contracts are so limited
that any real rise in taxes on them
would take all the profit out Of the
business. He said he considered that
the stocks in shipbuilding concerns
and in the concerns which give to
shipbuilding most of its materials are
among the most widely held of any
industry in the country, so that lift
ing the rate of corporation taxes on
these concerns, in accordance with
the size of their incomes, would really
affect great many people who
couldn't be numbered among the rich
by any stretch of Imagination.
The size of a corporations income
is no criterion as to whether it is doing
good business, or just scraping along,
he pointed out.
Sees Trade Revival Menaced.
may be making handsome profits with
no great bulk of income, while ar
income in the millions would be q
very small return for others. he said
1T is a serious mistake just now to
impose any additional burdens on in
dustry," he asserted ANY increase
in taxes will discourage business re-
vival"
The attention of the Federal ad-
ministration. he said, might better be
turned to the cutting down of ex-
penditures than to the raising of larger
governmental revenues. Il don't see
where we're ever going to get the
money to pay for the present rate OF
expenditures, he said. Certainly
that payment will have to be made
over a very long period of time. The
real answer to the Governments prob
lens is to stop this spending.