Evening star., 1936-10-23
The American Way?

The American Way?
In his speech at Worcester Wednes-
day evening the President rested much
of his defense of the administrations
tax policy on two points. One of these
was his philosophical discussion of the
democracy in taxation" and the fact
that taxes, after all, "are the dues we pay
for the privileges of membership in an
organized society" The other was his
declaration that "taxes shall be levied
according to ability to pay. That is the
only American principle"
No one can quarrel with either of the
doctrines thus set forth. The President
invites criticism, however, by his mani
fest attempt to indicate, by his picture
of the tax burden distribution, that his
administration has solved the problem
OF raising the revenue to wipe out the
the rich-the rich individuals and the
rich corporations who, he suggests, yell
like stuck pigs because the honest Demo-
Gratis have found them out and are
merely making them pay what they
escaped paying under the Republican
administration.
The direct tax imposed by the Federal
Government and for the most part dis
cussed by the President is the individual
income tax. If we strive toward a "democ-
racy in taxation" on the sound theory that
taxes are the "dues we pay for the privi-
lege Of membership in an organized So
ciety," how many due-paying members
do we have? In 1885, the last year for
which the complete data are available.
there were 3,723, ,558 individuals who filed
income tax returns, representing po-
tential due-paying membership of about
per cent in the organized society of
the United States.
This relatively small proportion OF
the population which pays Federal in
come taxes in the United States marks
one of the great differences between our
system and the British system Of taxa
ton. The married man in the United
States whose income is all earned and
has no children does not have to pay
an income tax until his income reaches
about $50 week, as compared with the
corresponding citizen OF Great Britain
whose income tax begins when he earns
$40 week. The rates themselves are
correspondingly higher in Great Britain.
Because Of this difference the British
tax is the more dependable as a revenue
raiser, shows less huctuation in time Of
depression and is more in keeping with
the Presidents allusion to democracy in
taxation than our own.
The President boasts that hiking the
taxes on the higher brackets-those Of
incomes over $4,000 a year"-was the
American thing to do" But it would
have been more in keeping with the
Spirit of '76 to have broadened the in
come tax base, as Senator La Toilette
urged, and thus to have brought more
due-paying members into the organ
same time have produced needed addi-
tional revenue. How many of these
''higher brackets" were affected by the
tax boost, accomplished in "the Ameri-
can way? Only 8,O72, producing O218
per cent of the total in income taxes.
How many were affected by the increase
d., 10 of
of over a million dollars-this particu-
lar tax boost being another example Of
our American way" of doing things?
Only fifty, yielding o0o16 per cent of the
total of income taxes collected.
. The courage demonstrated in boosting
rates on incomes Of $4,000 and more
sand reducing the rates on incomes Of
less than $4,000 is the sort of courage
that it takes to offend s,o72 taxpaying
voters instead of 3,7l5486 taxpaying
voters.
= One Of the things that makes govern
mental extravaganza easy is the small
proportion Of direct taxpaying voters.
And one of the best ways to prevent
governmental extravagance-which the
administration has not had the courage
to dds to increase the number of
direct taxpayers and let them know the
cost of the privileges of membership in
an organized society" by paying for
such membership. That, as a matter
of fact, would be more in keeping with
the best traditions of the American way"
than putting up front Of Soaking the
rich" and making up the difference by
: borrowing, by punitive taxation on busi-
ness expansion, by using the taxing
power to take property from one group
and give it to another, or further to cen
tralize control of business policies In q
Washington bureaucracy.
Sauatnr COuZpns.