Plentywood herald. [volume] (Plentywood, Mont.) 1908-current, 1936-03-19
DISCUSSING TAXES
PRESIDENTS SUGGESTION
NEW CORPORATION LEVY
TAKES CARE OF LOSS
ROOSEVELTsS THREE YEARS
CANDIDATES WORKING

for the Presidents message on taxes,
Congress found plenty TO work on at
ter the President recommended sweep
ing changes. Discussion continues,
with much difference of opinion, but
with Congress nevertheless impressed
by the fact that when appropriations
are voted, taxes must be levied.
Reviewing the fiscal policy of his
Administration, President Roosevelt
maintained lis fundamental soundness,
assuring the members that receipts OF
the Government are rising definitely
and sharply and that Federal expend-
itures can be reduced so that the in
crease in government income will be
able to pass the declining cost of re-
lief To maintain this policy, the
President insisted that it was neces-
sary to make good the loss of revenue
caused by the Supreme Court decision
and the increase in expenses caused by
the adjusted compensation payment
act
Breaking down the figures, Mr..
Roosevelt pointed out that the Su-
preme Court decision adversely affect
GU liS bQOSSl ny OIiC DilllOll, StNCll-
teen million dollars, as follows: ID a
deficit due to a failure to receive pro-
cessing taxes to equal expenses they
were expected to pay, 1921 ,0O6, 900; (2)
expenditures approved in appropria-
ton act, 1886, S296, 900, 000; 60 estim-
ated expenditures under soil c~onserva-
ton and domestic allotment act, S440,-
100000.
This sum of more thar a billion dol
lars, which must be raised to keep the
budget in line with earlier estimates,
includes a permanent annual cost Of
about S500,0O0,00O for farm relief pro-
vided and also the estimated net loss
to the government through processing
taxes which have not been collected.
However, in addition to the money re-
quired for the farmers, the Congress
has been asked to provide a sum to
meet the additional cost of paying the
adjusted compensation certificates of
the veterans this year instead of in
l945, when they would otherwise have
become due. To do this, in nine years,
will require an annual charge of $780,
100000. Therefore, the President wants
permanent taxation to provide $780,
100000 but he makes plain that the
money for the farmers is a substitute
for the old processing taxes and only
that required for the bonus payment
is new taxation.
While leaving to the discretion of
Congress" the method of raising the
revenue, President Roosevelt offered a
suggestion, which is the basis for the
widespread discussion now going on.
To begin with, the President would re-
peal taxes which have been counted
on to produce approximately a billion
dollars a year and in their place levy a
proper tax on corporate incomes lin
Guiding dividends from other corpora
tion) which is not distributed as
earned. He would repeal. ID present
corporate income taxes which are ex-
pected to yield S286, 900 900; (2) the
capital stock tax, estimated to yield
$3.50 900; CD the corporation excess
profits tax, estimated to yield 5 $780,
900; and, in addition, (4) eliminate the
present exemption of dividends from
the normal tax on Individual incomes.
The rate Of the tax, he said, should be
so graduated and fixed as to yield the
same revenue as would be yielded "if
corporate profits were distributed and
taxed in the hands Of stockholders"
Thus it will be seen that the new
tax on corporate income would be ex-
pected to raise enough to offset the
billion to be lost through taxes re-
pealed and the S620,OOO,O 900 required
for farm aid and to amortize the bonus
payments. There still remains to be
discussed the Presidents suggestion OF
methods to restore to the Federal
Treasury the amount lost through the
court decision throwing out the pro-
cessing taxes. Again, with Difference to
the discretion of Congress-" Mr..
Roosevelt suggests the taxation of the
"windfal received by certain taxpay-
ers who shifted to others the burden OF
processing taxes which were impound-
ed and returned to them or which
otherwise, have remained unpaid"
He points out that a tax on this "un-
just enrichment" would be only fair tc
the vast number who did not resort to
court action and have paid the tax
The return from this tax on wind
falls" would be received in this ano
the next fiscal year but would not
yield enough to offset the money losI
by the court decision. To make up the
difference, the President suggests the
consideration Of an excise on the pro-
cessing of certain agricultural prod
ucts. He points out that by increasing
the number of commodities, by lower.
ing the rates of the old processing tao
and by spreading it yer two or three
years, only a relatively light burden
would be imposed on the producers
consumers or professors"
The. third year of President Roose-
velt's administration ended last weel
with the scene greatly changed from
the day on which he took office. Their,
are abundant evidences of recover,
and a great argument is going on as t.
whether the Administration aided O
retarded the movement. However, n,
one can doubt the substantial i'm.
provement- Bank failures are few ana
deposits at the highest mark on record
Industrial production is increasing ant
no one thinks that capitalism is abou
to collapse. Business, employment
profits, payrolls, farm income and ur.
ban trade show substantial gains and
tendency to move upward. The gov.
eminent seems to be imbued with
retrenchment spirit and the Presiden
insists that the budget should be bal
- .-1 ro~ ~o1;of yoooJt,~oe