Evening star., 1935-10-06

Supreme Court decisions of last Spring,
the industrial world had been SO scared
as to stifle employment. BY Destroy
ing confidence the administration has
retarded recovery.
Since those Supreme Court decisions,
the Nation is showing some hopeful
signs of progress. Every American
prays that it may be genuine and
come quickly-not alone because 1t
would end infinite misery, but because
with recovery would come an atmos-
phere in which the vast problems of
the Nation can be solved more ration
ally and more fully. They could be
solved in a spirit Of Americanism
rather than be dominated by the
spirit of Europeanism. But whatever
recovery we have is constantly en-
dangered by this riotous spending and
this unbalanced budget. We cannot
spend ourselves into real prosperity.
Certainly an artificial prosperity can
be created by borrowing to spend,
whether by individuals or governments
That is joyriding to bankruptcy.
These gigantic budget deficits must
inevitably be paid for somehow, some
time. There are only three ways to
meet the unpaid bills of a Govern
ment. The first is taxation, the Sec
ond is reputation. The third is in
f1ation.
Already our country is highly
taxed. Our total taxes today-Fed-
eral, State and local-are the hiEh-
est of any great country in the world
except the British, even in proportion
to our national income But the British
have balanced budget and are yearly
reducing taxes. We, even with our
burden of taxes today, must take on
the further load from budget about
so per cent balanced. We are on
the way deeper into the morass Of
more and more taxes. The British
are on their way out of the sitting
swamp Of taxation.
Points to Soak the Rich" Tax.
Who will pay these taxes? We
have just seen a tax bill estimated
to produce s300,000,000 per annum.
That apparently could not have been
designed to meet the regular annual
deficit Of S3,500,000.000 1t was put
forward with the slogan. Soak the
rich" But with the passage of that
bill the rich are now soaked" We
may, therefore, conclude that some
one else will have to meet the $780,
100000 remaining annual deficit if
the bill is paid. If it is paid by taxes,
those taxes must fall on the so-called
economic middle class and the poor.
There is no one else left. The poor
will pay out of indirect taxes, hidden
in the rent and everything they buy.
And when the price of the necessaries
Of life to those who have but living
wage is advanced by hidden taxes,
those people are not sharing a sur
plus with the Government. They
have no surplus. The poor must 60
without something in order to pay
the taxes wrapped up in the package
they take from the store. Every
butcher knows that today the poor
are depriving themselves of bacon and
meat. The economic middle class
whether they be farmers or workers
at the bench or the desk, profess
sional or business men-produce 80
per cent of the national income. They,
like the poor, will pay by indirect
taxes in the cost of living, and in
addition they will pay again and
again in direct taxes. No matter
where you place taxes, the bulk of
them must come from those who work
and produce.
The subtle process of issuing Govern
ment bonds to pay that deficit not
only leaves it to be paid from your
lifelong earnings, but it daily creates
new dangers. No doubt these unpaid
bills can be cancelled by reputation.
The New Deal form of reputation is
devaluation. We can further devalue
the dollar-which Is, of course, repudi-
alton on the installment plan. De-
valuation is a modern and polite term
for clipping the coin. Rome relied
upon this method during its decline.
If devaluation has the inflationary
effect that the New Deal claims, then
in the long run it raises the prices of
everything we buy and the cost of
living goes up to everybody, farmer and
worker alike. The loss comes out of
the people. But more than that, the
returns from your insurance policy,
your savings account for old age, and
your children, your veterans allow
ance, and your old-age pension, are
also depleted in purchasing power.
Who then pays? 1t is the same eco
nomic middle class and the poor.
That would still be true if the rich were
taxed to the whole amount Of their
fortunes.
1t is not my purpose to discuss the