The midland journal. (Rising Sun, Md.) 1885-1947, 1936-01-10
THE TOWNSEND PLAN

The Townsend Plan--to tax every
business transaction in the country
2 per cent, and from the proceeds
pay each American citizen, under GER
tain stipulations, 5000 per month
is probably being discussed more
than any other as means of solving
our economic difficulties.
This plan appeals to the magma
ton as no other proposal does. 1t
Immediately stirs the sympathies, for
few there are who begrudge those in
declining years comfort and ease. 1t
arouses hope of relief in those who
are heavily laden and upon whom the
care of the aged falls. There are
also millions to whose avarice the
plan silently appeals-to children.
and grandchildren who would well
come an opportunity 20 help "Pa"
and MA" or Grandma" and
Grandpa" dispense of their $500,
each, monthly pensions. Perhaps
the greatest applause for the plan
comes from this group, for among
The older generation there is yet that
sense of thrift and independence OF
character which would revolt from
such an unnecessary orgy of taxing
and spending as the Townsend Plan
would entail for their ostensible
sakes.
Although the Townsend Plan pro-
poses 60 Cdx transactions in forms of
wealth, there are yet other trans
actions arising out of earnings and
incomes which the plan would scarce
~ touch in proportion to the magni-
lude of their returns to their owners,
such as: unearned increment from
real estate holdings, profits on water
ed stock in public utilities, COM
mercial and industrial corporations,
jpeculations, the immense profits
made in manipulating our credit sys-
EN- of financing, and the enormous
salaries paid the officers of our great
corporations Comparatively little of
his wealth could be recaptured by
he Townsend Plan, it is claimed,
renee its futility in accomplishing
my constructive results.
According to students of tax prob
ems, over $4,000, 100000 in taxes
vas collected from people of small
Incomes since the depression. These
people had little or nothing left for
awnings accounts. In this period
hose with incomes of over $4,000
per annum had an aggregate net in
9ome, above income taxes and sur
axes, of nearly $4,000 1000.
While it is probably true that a
considerable proportion of the taxes
needed to cover the $780, 900
monthly pension fund would come
from those who could afford it, the
bulk of it would be likely to come on:
of those whose salaries and incomes
we're much lower than those of the
pensioners. In other words, the load
Of carrying the pensions would be on
he backs of the people who work for
small incomes, and according to the
.aw governing the pyramiding of
taxes the system would shortly break
down, leaving the whole of society
bankrupt and demoralized.
In 1929, according to the figures
Of the Department of Commerce, the
national income reached an all-time
peak of $50, 10000, 1000. Since the
Townsend Plan provides for a pen
sion of $2,400 per year, each, for
some 100000 persons who have
reached the age of sixty, it will be
seen that each pension would absorb
The equivalent CT the per capita in
comes of four persons on the 1929
basis of 1851. While it is admitted
that prices would go skyward and
the national income reach fictitious
heights, the 2 per cent on the. total
transactions could never exceed the
total income, and that, as indicated
for 1929, was $4,000, 100000
According to the statement of one
analyst who based his figures on the
1929 level, about &c per cent of that
income would be set aside for old
people. From the experience tables
ON tax pyramiding. hit declares that
As per cent of the earnings of the
workers would, when the plan was
established, be absorbed in taxes-a
thing which cannot possibly be es-
capped for tht reason that the plan is
based on a sales tax.
Many contend that some plan must
be inaugurated to capture the fruits
of monopoly and excessive profits.