Evening star., 1936-03-11
Moley Fight Reveals Tax Plan
Is Modified Brain Trust Child
Surplus Leuy Said to Haze Been
AdUanced as Redistribution of
Wealth PROGRAM.

the A. A. A. Mr.. Roosevelt then said
there must be new taxes.
There was first the picture that he
didn't know just exactly what to do
about this, but something would be
done, 1t was assured. Then, finally,
he had the House and Senate leaders
up to visit him and the announcement
was made that he had laid in their
lap the problem of raising additional
revenue to pay for new farm pro-
gram and also to take care of the
payments incident to the bonus. He
did not want to be put in the light
of suggesting another sock the rich"
program, 1t was agreed. The new tax
program must originate with the peo-
pies elected representatives. It very
soon developed, however, that Mr..
Roosevelt did have suggestion" Just
a suggestion, but as the House Ways
and Means Committee has waded into
the matter, this suggestion from the
White House has come to be most
persistent.
The suggestion" was an average
tax Of 331a per cent upon corpora
ton surpluses. with a view, as 1t was
explained at the White House, of get
ting the corporate surpluses out
among the stockholders. who, in turn,
would spend it-if the larger ones
didn't, the income taxes would hit
them severely-and a trade boom
would result.
Cnn7icf St;r~aS Tn
The program has met with con-
ficting responses. In the memory of
the Oldest political observers it is the
only tax-producing program that has
ever sent the stock market up. The
stock market went up on the theory
that holders Of stocks would get larger
dividends from now on. Many news
papers. recalling the advertising spree
they enjoyed under the old excess
profits taxes, wondered whether this
was not good tax after all. Some
influences in Congress, notably Rep
resentative Vinson of Kentucky, in
slst that corporations should be per-
mitted to build up at least a certain
reserve for lean days, but the admin
istration is pressing to have its "sug-
gestion' adopted without change.
1t develops, aside from how the
present program will work out, that
in Its original state it was tic brain
trusters' idea of redistributing wealth.
They had In mind. however. after ali
the expenditures that have been made,
to seize the corporate surpluses to
pay on these expenditures. That was
one particular point where their re-
distribution of wealth promise came
in. They have been severely ques-
toned on this business of redistri-
button. Even some of their followers.
observing the vast expenditures, have
asked: Just where does the redis-
tribution Of wealth come IMP" If
they could have seized, as apparently
was originally planned, the corporate
surpluses of the country, they might
have been successful.
Under the present plan, however.
emphasis has been given to the fact |
that only surpluses arising from now
on are to be taxed. With a view to
taxing these. Mr.. Roosevelt is willing
to forego the present taxes on cor
porate levies, excess profits and capi-
tai levies.
The funny thing about 1t Is that
here was a tax program, originally
planned by the brain trust, and which
Is finally sought to be put into effect |
in modified form, after a lot of "delib- |
Grafton on the part Of Congress"
1t is apparent that Prof. Moley did |
not stand with the other brain trust |
ers In the original planning of this. |
In Today he says the tax is analogous
ITO levying prohibitory tax upon
individual life insurance premiums"
He adds: 'Surpluses are the life in
surance policies Of business firms"
The biggest firms could not have
survived the depression under the
proposed tax plan. he says. But the
New Deals philosophy is that the
depression is over and that the turn
Is upward. In agreeing to a program
to tax future surpluses, the Presi-
dent seems to have hit a compro-
mise between Moley and the school
of thought which urged the seizure
Of existing surpluses for the purpose
of paying the New Deal debt.
incidentally. the idea of taxing sur
pluses was advanced under Harding
in 1921, but was laughed OF. That
was another day.