Evening star., 1936-05-26
COUzENS ADVISES
CAUTION IN TAKING
Forum Speaker Says New
Levies Needed, but Hits
Administration Bill.

needed. but opposed the method pro-
posed by the administration.
In an address on the National Radio
Forum, sponsored by The Star and
broadcast over Station WRC and a
Nation wide network of the National
Broadcasting System, the Senator ad-
vocated graduated tax on individuals
and corporations, based on their abil-
tty to pay.
The administration proposal to
raise revenue by taxing the undis-
tributed profits Of corporations Is un-
timely, immaturely considered and
'the most carelessly drawn and un-
developed of any proposal have ever
seen" Senator Couzens declared.
Would Injure Business.
The chief fallacy of the idea, he said.
Is that it would injure hundreds OF
thousands of corporations, mostly
small, who have been required through
the long years of depression to use
up whatever surplus they had accrued
in earlier years"
Z" 1t seems obvious that an
opportunity must be given to them to
accrue earnings to take care OF the
losses in previous years and to restore
impairment in their capital" he said.
Conceding there was some merit in
taxing undistributed corporate earn
ings, Senator Couzens added, however,
that the question should be studied a
wear or two before the Treasury pre-
sented its facts to Congress.
Hits Tax Evasion.
The Senator expressed belief there
should be no tax-exenpt securities OF
any kind.
Hitting tax evasion, he said great
industrialists" and private men OF
power who devise ways and means to
avoid taxation ARE really in the same
class as politicians who adopt expedi-
ents to be reelected"
Text Of Address.
The text of Senator Couzens' ad-
dress follows:
Taxes are never an agreeable sub
feet to discuss, but the assignment
given me by the National Radio Fo-
rum, under the auspices of The Wash
tngton Evening Star and through the
courtesy of the National Broadcasting
Co. necessitates my tackling the job.
We may first raise the issue as to
why new taxes should be imposed at
this session of Congress. We may lay
aside discussions OF extravaganza and
waste in government and assume
for the moment that all this has
e+i
taxes to take care of debts and obliga-
tions already incurred On April 80,
1896, We had a gross debt of s3l ,425,-
44O,396. From this should be de-
Quoted loans the Government has
made, secured by adequate assets, in
the amount of s4.32s,055,114, leaving
a net debt of s27,oe7. .3s5,2s2. We
should also consider that on April 80
we had in the Treasury s2,441.9 .97o,5l9,
while ordinarily the general fund In
normal times runs around $3.50 0000, 600.
If we deduct this Treasury balance,
which would be the practice in ordi-
nary commercial accounting, we would
show a net debt of S24,655, ,414,763.
This does not take any account OF
what some persons call the profit
through gold devaluatlon Of approx
fnately s2,oO0,000,o 900, which is now
maintained in a stabilization fund.
This large debt has been brought
about, according to the testimony OF
the Secretary of the Treasury. by a
deficit for the fiscal year Of 1884
amounting to about $4,000, ,000. 900; in
1885 of about s3,50o,0O0,oo0; in 1886.
after considering revenue lost through
the decision of the Supreme Court in
the A. A. A. act and putting the whole
of the World War veterans adjusted
compensation certificates into this
year. aggregates about $4,000, ,oo0,0 900;
in 1887 it is estimated the deficit at
about s2,5o0,0oo, 900. the total aggre-
eating approximately $4,000. .o0o, 900.
Interest Rate Slashed.
After considering all of the factors
above enumerated the national debt is
approximately $4,000, 10000 less than
the highest postwar debt, which was
on August 81, 1919, which amounted
to 1886 ,701 SAB. We might at this
time consider the interest rates paid
on this enormous outstanding debt.
In 1920 the average interest rate was
4.178 per cent. During the first nine
months Of this fiscal year the average
interest rate was 2.6 per cent very
substantial reduction in interest costs
to the Government due to the plenti-
fulness of money.
To the cost of debt service we
must add the current expenses Of our
Government. Congress did not con-
template enacting new tax legislation
at this session and undoubtedly new
taxes may have been avoided at this
time had it not been for the Supreme
Courts decision declaring unconsti-
tutional the agricultural adjustment
act and had Congress not enacted
legislation for immediate payment of
the World War veterans adjusted
compensation certificates. The loss
Of revenue through the Supreme
Courts decision in the case Of the
agricultural adjustment act and $780,
100000 this year to amortiZe the ad-
ditional debt created by the payment
now, some 10 years in advance Of the
due date, of the adjusted compensa-
ton certificates to World War veter-
ans, necessitates the additional taxes
and therefore the first problem that
arises is from what source this ad-
ditional revenue can best be collected
There are multitude of ways, but the
difficulty arises from what source
the new taxes should come 50 as to
do the least possible harm to the
country. There are many, many
arguments advanced with respect to
broadening the base Of the income
taxes. This, in theory at least, Is
sound, but it can only be secured
by two methods. namely, reducing
the exemption allowed to single and
married persons with or without chill
dren to support, or by raising the
rates in the $4,000 to $1,000 income
group. Whatever is done in this
connection obviously to some extent
lowers the standard Of living because