Evening star., 1937-05-02
BY JOHN c. HENRY.

A FTER years OF hiding their
n heads in the sand. the politi-
~ cal managers Of America S
a democratic form of govern
ment are finding themselves slowly
but surely being forced into a posi-
ton where they must soon make plans
to provide the necessary revenues
to meet the increasing costs" OF the
Government which they manage.
Realization of this condition, no.
where more fully recognized than in
the minds of these same managers.
is accompanied by growing convic-
tion that the day has passed when
appreciably increased revenue may be
obtained by quiet enactment of few
more hidden or indirect levies or by
vigorously ballyhooed measure to
SOAK some unpopular minority.
Putting aside, We hope, the possi-
billty Of attempts to raise the needed
revenue by speeding up operations at
the Bureau Of Printing and Engraving,
there seemingly remain two broad
alternatives
Aiop, anu lllOI uSSiI UiS II OIL n
long-term standpoint, is complete
overhauling of the Federal, State and
local tax machinery for the purpose
OF constructing co-ordinated and
effective system OF raising revenue.
Until this is done all other tax legis-
lation will be founded on an unsta BILE
base
Second, the enactment of legisla-
ton within the present rambling
structure which would greatly in
crease the Federal taxpaying popula-
tion Of the Nation.
Two Principal Possibilities.
This second alternative, in turn.
embraces two principal possibilities:
namely. an income tax with base suffi-
GENTLY broad to bring volume return
or sales tax which would blanket
virtually the entire population.
Admitting the political unpopu-
larity of both Of the latter proposals,
the wide disrepute which has at
tended recent impositions of State
and local sales taxes and the ex-
pressed distaste of President Roose-
welt for such tax indicate that
the lesser of the two evils" the
more widely applied individual in
come tax, is in the favored" posi-
ton if the administration decides to
carry on the crazy quilt of today's
tax laws.
Taxes That Failed to Produce.
That new and more effective means
Of obtaining revenue are becoming in
creasingly necessary is indicated by
President Roosevelt's own analysis of
the fiscal situation in his message of
April 20 this year.
At that time he estimated that in
come taxes, including both corpora
tion and individual, would produce
$267, ,200O less for the fiscal year
than had been expected. In the same
message he estimated drop of s337,-
100000 in returns from other sources.
Although this latter deficiency was
not broken down, examination of
Treasury Department figures indi-
Gates approximately where the loss
Of revenue will occur.
For instance, from gift tax pro-
vision that was calculated to raise
$4,000, 900 for the first nine months
of the fiscal year have brought COL
lections of only $20,0o0,00O. Since
the quarter ended in March normally
would be most productive for tax Of
this nature, it appears almost certain
that there will be shortage Of at
least ss5 100000 in revenue from this
source.
To continue, estate tax collections
we're estimated originally at s305, ,000.-
900 under the new law. Returns. how
ever, have been about $4,000, 900,
with q shortage of $4,000. 900 likely.
Another heavy loss looms In the