Evening star., 1937-06-04


way toward bal
anCing in { o m
and outgo these David Lawrence.
DAYS.
But what are the facts?
The latest figures derived from the
officially published data of the Bureau
of Internal Revenue show that all
persons with net income of more
than 100000 year had in the year
1885 gross income of $568,370 600.
Method of Figuring Net.
The net income was derived by
subtraCting a total of Sll2,l40,OO0 OF
deductions" from their gross income
Of s68O,5lO 900 Assuming that these
rich people had no right to any OF
these deductions and assuming also
that they would continue year after
year to work if they had 100 per
cent of their income ConfiSCated, II
still would give the Federal Govern
ment only S436 906 600 more than is
ROW being obtained in taxes from
that group They are already paying
S243 604 900 or about AZ per cent OF
LlClT llPJ lllCOllt III ldAtS,
Certainly s436 100000 hardly would
balance the budget. For the last four
years the deficits have averaged around
s3000,000, 900 or more and in the
present fiscal year the deficit will be
above S250O.OOO,OOO 1t would be
fantastic to suppose that 100 per cent
of the net income could be confscated
tn
much is embraced in the Presidents
campaign is to assume that, as he
indicates. most of the taxpayers are
honest and that a small percentage
sre irving various methods of evasion
and avoidance If 10 per cent are dis
honest and 90 per cent are honest,
This would mean that by adding one
tenth more to the gross income Of
the group above 100000 a year, or
about s68,O51 900 of income is actually
involved.
Average Tax Rate.
The average tax rate in these
brackets is 40 per cent, but if We use
so per cent figure it would mean
that half of S6805l 900. or about
S24 O25. 500, is the sum 10 obtain which
the President has decided that a con-
greSsional investigation should be
begun.
If the same method of calculation
IL applied to incomes OF S50000 a
year or over an additional $65 ,000,00
would be at stake.
1t is conceded in the Presidents
tot NF loa Nod
used to avoid taxes are legal Likewise
when the congressional investigation
is under way it will be discovered that
many Of the so-called tax avoidances
have been going on for several years
under every tax law that has ever
been written. What the adminiStra-
tion confesses is not that it lacks the
ingenuity of the tax avoiders but that
laws cannot be written which will
BE- so ail-incluslVe on the one hand
as to get in all the tax money and
yet on the other hand will not create
hardshipS to smaller taxpayers at the
same time For laws have TO be
written in general terms and ClaSSi-
fcationS for tax purposes and cannot
under the spirit of the Constitution
be arbitrary though, to be sure, tax
rates can be very high and burden
some and yet be legal
What. then. is the purpose Of the
congressional investigation? It is not
altogether to get new legislation be-
cause legal 'loopholes" have been
blocked before and still there are
some who avoid taxes. The aggregate
avoidance in dollars is too small COM
pared with the total tax return to
warrant the kind of campaign that
has been undertaken. The only
alternative purpose is that, being un-
able by legal means to collect the
taxes, the administration now seeks
IN attack the rich and the thrifty,
hoping that by unfavorabe publicity
they will be shamed into paying more
taxes than they legally are supposed
r. pay.
Charges Glass Warfare Waged.
This becomes part and parcel of
the class warfare which has been
vaged by President Roosevelt as a
primary part of his campaign for
ever
since he became candidate for the
presidency. Mr. RooSevelt's theory is
fhat the masses will accept these
sntagonisms and hold them only as
basis for proper legislative correc-
ton. Unfortunately, the President has
never given much consideration to
the effects OF war of hates and
class antagonlSm on the future peace
ano stability of the United States
such outburstS as are occurring in the
labor situation today, for example, are
regarded by him as merely the grow
ing pains of labor with its new-found
powers of collective bargaining.
In the final analysis the controversy
over tax evasion may prove BOOM
erang against the administration.
When the facts come out as thev
should, the public will want to know
why the administration for the last
four years has not been collecting
taxes from the obviously illegal evad-
ers and why it has not before this
recommended legislation to curb the
tax avoiders. The practices have been
known to the Treasury for years. while
the present administration has been
claiming it has been plugging leaks"
IF the loopholes can't be plugged by
law 1t might be dangerous thing to
start the custom of trying to stop
avoidance Of taxes through the simple
process Of publicity This form of at
tack would be a kind of extortion
which in private life is customarily
called blackmail.
Effect Of Campai ign.
Unless the Treasury is able to prove
clu Sjvelu that all ~, a,.o.