Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-28

SENATOR
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graduated according to the size Of
corporation income in place of the
present uniform corporation income
tax Of 1884 per cent"
Small Corporation Rate.
The Presidents Interpretation of
this recommendation reads as follows,
quoting his own language:
THE rate for smaller corporations
might well be reduced to 1924 per
cent, and the rate graduated upward
to rate Of 1884 per cent on net in
come in the case Of the largest cor
porations, with such classifications of
business enterprises as the public in
terest may suggest to the Congress"
Fourth, the President recommends:
"a tax on dividends received by cor
porations to prevent evasion Of
such graduated tax on corporate in
comes through the device of numerous
subsidiaries or affliates, each of which
might technically qualify as small
concern even though all were in fact
operated as single organization"
Fifth, the President stresses the de-
STABILITY of investigation with view
to 1.-The Simplification of our corporate
structures through the elimination of
unnecessary holding companies in all
lines of business" and the discourage
ment of "unwieldy and unnecessary
corporate SURPRISES: and
Sixth, the Presidents final request
is for "a constitutional amendment
whereby the Federal Government will
be PERMITTED to tax the income on
subsequently issued State and local
securities and likewise for the taxa
ton by State and local governments
Of future issues of Federal securities"
BY and large we have here the
most notable, best balanced, funda-
mentally just and constructive tax
program in our history, having in
view the economic problems before
the Nation. The recommendations are
so consistent with American tax prin-
ciples and practices that various lead
ing Washington tax experts have well
coined the message. alike because Of
its aims and for its rational and I'M
derlying philosophy. Broadly speak
ing, the President seeks to equalize
and make uniform the tax policies,
which, since the ratification in 1913
of the sixteenth amendment to the
Federal Constitution, authorizing in
come taxes, have become an indis-
pensable and permanent part Of our
fiscal system.
Amendment Cited.
It perhaps should be mentioned
especially in these times when the
Supreme Court has been declaring
recent Federal legislation unconsti-
tutional-that our right to levy and
collect income taxes, as we are now
doing, was only secured by the adop-
ton in 1918 by the States Of con-
stitutional amendment, after the
Supreme Court had denied the prac-
tical exercise Of that right under the
Constitution as originally framed.
need scarcely add that without such
Federal authority under that consti-
tutional amendment, it would be i'm
possible for the Federal Government |
at this time, in any fair or reasonable
way to meet, through taxation, the
Nations unavoidable debts and cur
rent obligations. Income taxes, for |
instance, long ago outran our tariff |
revenues. Indeed, without such au-
thority our Nation would today be
financially impotent and demoralized. |
Passing by certain technical aspects |
Of the message, the public's vivid in
terest should first be drawn to the |
social detectives at which the Presi-
dents proposed changes in fiscal
policy are frankly directed. He men
tons and reaffirms his public purposes.
He subscribes to the growing convic-
ton of thoughtful men and women
that, without Government control,
wealth and its concentration are in
creasingly dangerous to freedom and
equality Of opportunity for the people
of this country. He insists that i'm
pressive gains will be recorded If the
Nation uses taxation to decentralize
concentrated corporate
power, the menace Of which springs
from the fact, as he says, that "size
begets monopoly" Nor is he content
with the implication that taxation
should be used to check corporate
growth when needlessly complex and
Industrial organizations when inef-
6NiaY0tlu nUarhyYf1f fYrct |
D far-reaching program Of graduated
taxation both on individual incomes
and corporation net returns, because,
under our economic system, though
energy and originality are occasionally
rewarded in their own right, even in
such cases, as he argues, luck and
other advantages are usually pro-
noted by Government, which thereby
largely and continuously contributes
TO the accumulation Of our modern
fortunes. It follows, as he suggests,
that those on whom the Government
thus confers economic power over en-
oloyment and unemployment, and over
|ar-reaching human happiness and
must stand ready to re-
'pond to the Governments reasonable
for appropriate taxes.
With similar analysis and insight,
The President also emphasizes that
use of individual effort
s far more the source Of individual
wealth than unassisted effort can
possibly be, and that 1t is this silent
Of the many, to whom
wealth does not accrue, to which are
argely due the enormous financial
'eturns received by individuals and
corporations from mass production.
The Presidents discussion also recites,
What all Of US know, that individual