Evening star., 1935-07-26
Fact and Fancy.

The tentative soak -the-rich' tax
schedule approved by the Democrats OF
the House Ways and Means Committee
is interesting now chiefly in comparison
with the Presidents recommendations
which prompted it.
The President alluded to the fact in
his tax message that studies have MADE
it very. clear that we need to simplify
and clarity our revenue laws" Any
efforts which the Ways and Means COM
are not yet apparent.
The President suggests that our rev.
enue laws have operated in many ways
to the unfair advantage of the few, and
they have done little to prevent an un-
lust concentration of wealth and eco
nomjc power, The ownership of
such wealth or riches represents a great
public interest and great ability to
pay"
The total yield from the tentative tax
schedule now proposed is estimated at
between sl50,0O0000 and s250,O00,000-
enough to support the Civilian Con-
servation Camps from five to nine
months.
The President asked for higher levy
on inheritances and gifts, and because
of the very sound public policy of en-
couraging a wider distribution of wealth
I strongly urge that the proceeds OF this
tax should be specifically segregated and
applied, as they accrue, to the reduction
of the national debt. BY so doing, we
shall progressively tighten the tax
burden of the average taxpayer and, in
cidentally, assist in our approach to
balanced budget
The committee tax schedule on in
heritances and gifts is estimated to pro-
duce about $l2l 100000 additional rev.
enue. The public debt now stands at
S29. .245, 1926, ,02503. Mathematically in
clined persons may find pleasant di-
version in estimating the effect on public
debt reduction and the tax burden of
the average individual" in permitting the
annual accrual of s12l 100000 toward
debt liquidation. There will be general
agreement that the assistance of this
sum toward budget balancing will be en-
tirely incidental"
The President stated that the dis
turbing effects upon our national life
that come from great inheritances OF
wealth and power could be reduced in
part by definitely increasing the taxes
on very great individual net incomes"
AS an illustration, he pointed out that
the graduated tax on incomes stops at
s1.O00,000. Above that amount the tax
rate remains the same The duty rests
upon the Government "to restrict such
incomes by very high taxes
The House committee found that if all
incomes over million dollars in 1888
were confiscated outright, the increased
Weld to the Government would be about
s55o0o.OO0 In 1893 there were only
forty-six incomes in excess OF a million
dollars; only one in excess of $4,000, 900.
So the committee had to go considerably
below 81 0OO, 900 to begin its higher levies.
It proposes higher surtaxes on incomes
greater than sl5o,000, graduated up to
seventy-five per cent of that portion OF
an income in excess of slO0O0,O00. And
the estimated yield is $40 400, 900 year
less than half the amount set aside for
the youth movement" under the newly
created National Youth Administration.
The President suggested the applica-
ton of the graduated tax to corporation
incomes in place of the existing fiat tax
of thirteen and quarters per cent,
with the imposition of an additional tax
on dividends received by corporations.
The President suggested the range Of the
graduated tax might be between ten and
three-quarters per cent and sixteen and
three quarters per cent.
The committee rates would range be-
tween thirteen and three-quarters and
fourteen and three-quarters per cent;
the yield would be approximately the
same as it is now and the committee
has apparently decided against an in
crease in the existing one-tenth of one
per cent tax on intercorporate dividends,
although a moderate excess profits tax"
may be imposed, with no estimate of the
yield yet available.
One difference between the House
committees proposed tax bill and the
Presidents tax message is the difference
between fact and fancy; the difference
between the abstract discussion OF
political theory and actual dealing with
hard realities.