Evening star., 1936-02-07
'LEGAL|zED STEAL
BYu.S. QUESTIONED
Keeping Other A. A. A. Tax
Funds Seen as Fraud
on Consumers.
BY DAVID LAWRENCE.

p Debate in Congress over the So
called "legalized steal" Of processing
tax funds has done little to solve
the problem of what has happened
and is going to happen to the 81 ,2oo.-
100000 illegally collected as a tax.
When Representative Treadway,
Republican, criticised Secretary Wal
lace for accusing the Supreme Court
of having perpetrated a "legalized
STEAL" even the Democratic spokes-
men conceded that Wallace had used
a strong term, but they asked Tread
way point blank to whom he would
have returned the funds. He remained
silent.
Now the same question y to be pro-
pounded to Secretary Wallace. 1t
might be phrased this way
II the 100000 900 taken into tenn
porary custody by the court and later
declared to have been illegally i'm
posed by the A. A. A. had come into
the hands of Secreary Wallace for
disposition, would the Department OF
Agriculture have turned these funds
over to the consumers, who presumably
paid the taxes?
Refund Under Question.
Likewise there is another query:
If the $1,000 100000 of processing
taxes now declared to have been il
legally collected do not belong to the
Federal Government, what steps will
the administration now take to re-
fund these same taxes to the con-
sumers who paid them or to the pro-
cessors who absorbed them and did
not pass them on to consumers?
The answers to these questions be-
come tremendously important because
they relate to the illegal collection OF
taxes, one of the most vital problems
that can arise in a democratic system
of government For if taxes can be
Illegally collected and there is no pro-
vision for their refund to those who
really paid them, all sorts of indirect
taxes can be piled up and exaction'
levied which work hardship on con.
sumers
The s20OO0O.C0o impounded by ths
Supreme Court until the constitution
atty of the A. A. A. could be decided
was paid into the court by the process.
sors. Some of them had in thG interim
absorbed the tax in their own selling
price and others had increased theh
prices so as to make the consumer
pay the increased expense caused BY
the tax.
Theoretically for Consumer.
The assumption to which Wallac,
has, given expression is that tn,
processing taxes for the most par
were paid by the consumers and tha
to return the taxes to the professor.
issto increase the latter,s profits. As.
sunling that he is correct in that rea.
sofltng, then the consumers now art
entitled to their money back. Surely
there is no rule of law whereby the
Federal Government is entitled to use
the proceeds Of an illegally collected
tax.
But while the 5000, ,000,0 of tax
money-belonging either to the con-
sumer or to the professors but GER
tainly not to the Government-was
ordered by the Supreme Court to be
returned to the taxpayers who actually
paid it into the court, the s1,000,-
100000 of processing tax money,
actually collected by the Internal Rev.
enue Bureau before the courts began
to interpose their power to take charge
otsthe tax monies, cannot be restored
to its rightful owners unless the Fed
eral Government itself gives consent.
IT Is on this point that the influence
and power Of Secretary Wallace comes
directly into the picture. BY recon-
mending to Congress that arrange.
mentS be made to reimburse the con-
sumers for the $1,000,000, 900 in taxes
anlawfully collected, he can undo
whatever injustice has been done. The
fact that this billion dollars has al
ready been paid out to the farmers
does not affect the question of illegal
y collected taxes The Federal Gov.
ernment may wish to subsidize the
farmers-in fact, the new legislation
Is going to do that same thing-but
presumably without the Objectionable
features of regulation which were as.
ISOLATED with the A. A. A.
Ruling Made on Fraud Taxes.
But grants of funds to farmers on
the one hand are a separate matter
and have no relationship to the fact
that other funds were illegally COL
Iected in exactioris under @:le name
Of taxes"
The tax money belongs in large part
to the consumers. What machinery
will be set up to restore it to them
Justice Roberts, speaking on behalf OF
the Supreme Court of the United
States in a unanimous opinion rem
dered on April 20, 1885, said that for
the Government to get and keep taxes
collected illegally Oh wrongfully was
against morality and conscience" /"
and he added that it amounts in law
toa fraud on the taxpayers rights"
When this decision is read and it is
recalled that no effort has been made
as yet to return the $1,000, ,0OO, 900
illegally collected, the question of
which agency of the Government, If
any will finally be recorded as hav-
ing been guilty of "legalized steal"
remains to be determined by Congress
itself. either in agreeing or refusing
to let the consumers Of food products
have their money back.