Evening star., 1937-12-26
FIFTH Of INCOME
MAY co TO TAXES
An-Time Peak in '38 Is Pre-.
diCted by U. S. Chamber
of Commerce.
BACKGROUND

bAChGROUND-
Mounting governmental costs
and tares propide political fodder
and bid tar to be one OF the most
important issues in the 1910 elec-
ton President Roosevelt has er-
pressed concern and urged econ-
omy on Congress. Discussion of
tar relief. as Offset to business re-
cession, at recent special session
brought no action, but is expected
to be major item on agenda of I'M
Sional Investigation disclosed tar
loopholes and euasions.
Americans next year probably will
pay 81 out of every SIS of income to
Fedora. State and local governments,
the United States Chamber of Com
merce predicted yesterday.
This will represent an all-time and
dangerous tax peak, the chamber
stated
The forecast was contained in q re-
port of special committee, which es-
timated the total 1888 tax burden at
about sl3,500 900, 900, and urged over
hauling of State tax laws and con-
certed civic pressure for local economy
The 20 per cent ratio of taxes to
income was described as one which
has been regarded as the danger sig
nal"
Breaking down the predicted total,
the committee estimated that Federal
taxes would amount to $6,40O. .O00. 900
and State ana local taxes to S7,10o,-
100000.
National Income Prediction.
Government agencies it stated,
calculate that the total national in
come next year will be slightly below
the $4,000 00O, 900 estimate for this
year. On this basis, the Nations tax
collectors will dip into the national in
come and take about one out of every
five income dollars"
The report said the current business
recession emphasized the need for re-
tarding the rate of increase in govern
mental expenditures and taxes, Ito
the end that the restraints and handi-
caps which taxes place upon enter
prise may be moderated and business
given more freedom to cope with cur
rent difficulties"
The Federal Government, it pointed
out. Is taking steps to revise its tax
laws to eliminate inequities and dis
crlminatory features, and stated there
Is an equal need for similar action by
State governments.
Eleven State Legislatures will be in
regular session this winter and
spring" stated the report, "and a
number of special sessions are likely
to be called. In some of these States
there are outstanding hardships re-
sulting from inequitable provisions
of tax laws. If uniformly the States
join with the Federal Government in
efforts to remove or tighten those
taxes which are most oppressive upon
business operations it will have a pro-
nounced effect in encouraging eco
nomic improvement and increasing
employment"
Warn Against U. S. EncrOachment,
1t warned, however, that "any fur
ther encroachment by the Federal
Government" in its revenue-raising
efforts will handicap State and local
governments in placing their fiscal
affairs on solid foundation and
lead to a greater dependence on
Federal grants.
Using a three-year comparison to
show the tax load growth, the COM
mittee found:
The total volume of taxes in 1885
was about $1o,400, 600, ,O00-$3, ,90o,-
100000 of Federal and $500, ,00O, 900
Of State and local.
The total volume of taxes in 1887
may reach as high as $l1 SOC, ,0Oe, 900,
of which $5.00O.OO0 900 Is Federal and
$500, 100000 State and local taxes"
1t pointed out that total taxes for
1897 are well in excess of the pre-
vious peak of $4,000, ,0OO, 900 reached
in 1890 and are about 50, 500, ,OOO, 600
In excess Of the total amount COL
lected in 1920, when the highest war
time rates were in effect. The $l3.-
sJ0,000,000 total forecast for 1888
will be IS per cent above the 1896
total. 80 per cent above the 1890
peak and so per cent above the maxi
mum wartime yield in 1921.