Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-06-30
The Detectives.

The Objectives.
In his now-celebrated message to
Congress on taxation of wealth, the
President outlined five distinct under
takings in legislative consideration OF
"the broad question of tax methods and
policies"
Three of these related to imposition
of inheritance and gift taxes designed
to encourage wider distribution of
wealth" and to reduce the public debt;
definite" increase in the taxes now
levied upon very great individual net
incomes" in pursuance of what the
President considers is the duty of "the
Government to restrict such incomes by
very high taxes" and the substitution
of graduated taxes on corporations in
place of the present fiat rate of thirteen
and a half per cent.
Another proposal was to eliminate
unnecessary holding companies and the
encouragement of unnecessary cor
porate surplusses,' questions which the
be debated in the time remaining in the
present session of Congress" The fifth
proposal was the submission of a con-
stitutional amendment for future taxa
ton Of State and Federal securities.
According to the program now, Con-
eres is to undertake Immediately the
study of the first three proposals. The
fourth is definitely out for the present
session. The fifth-submisSion of
constitutional amendment - while 1t
might not take long, has received little
discussion.
But chief interest centers in the ulti-
mate objective of the three classes of
taxation now to be studied. The Presi-
dent suggested that the yield frcm
inheritance and gift taxes be specifically
Segregated and applied to reduction
of the public debt, tightening the bur
den of the individual taxpayer, and,
incidentally, assist in our approach to
balanced budget" But Senator Har-
risons tentative soundings in this field
indicated on the basis of proposed rates.
a yield of about s1OOOOO,0OO a year.
That is just twice the amount set aside
by the President only last week for an
experiment in aiding the youth Of the
land to find work and get through
school, one of the minor offshoots of
work relief. In view Of a prospective
deficit for the next fiscal year of about
$4,000, 900, raising one or two hun
dred millions year through inheritance
taxes does not offer much hope in re-
ducing the public debt or Tightening the
individual taxpayers burden.
Estimated yields from restricting high
incomes by very high taxes and from
a graduated tax on corporation incomes
are indefinite. But the total yield from
Senator HarriSon's tentative schedule,
inheritance taxes and all, was placed in
the neighborhood of $340 900, OO0-and
there are many who will question that
estimate, believing it is too high. In
the light of Government spending today,
$340,0000OO is drop in the bucket.
The impression grows and is strength
ened by such preliminary estimates, that
the Presidents proposed tax program
was based more on the hope of EN-
couraging a wider distribution of
wealth"-whatever the phrase may
mean-and on restricting high incomes
by very high taxes" than upon levying
taxes for revenue purposes only.
And If that is so, the question imme-
diately transcends the importance
always attached to revenue measure
and enters field Of social economics
wide enough for Congress to explore
all Summer without recrossing its path.
If the purpose Of the tax plan is to
produce greatly needed revenue, along
with more equitably distributing the
burden of taxation, Congress will find
strong support for its unpleasant labors.
If 1t is undertaken with the. main
objective of distributing wealth" or in
performance of what is conceived as
governmental duty to restrict great in
comes, another question presents itself,
which, reduced to fundamentals, is
whether to kill the goose that lays the
golden egg, or how hard the goose may
be hit without fatal results.
The question of detectives is one of
the first that the House Ways and Means
Committee will be called on to answer.