Evening star., 1937-11-27


paid out lest penalty be incurred.
For the present law penalties busi-
ness for saving its money or for trying
to expand and give employment.
The undistributed surplus tax was
properly termed last year. during the
campaign, "cockeyed piece of legis
lation," but anybody who has studied
the effects of it would have difficulty
in using such temperate language.
For it is the very reverse of prudence
and the very opposite of common
sense.
Sentiment Unanimous.
Sentiment for the repeal of the tax
is almost unanimous, ye1 Congress
hesitates Chairman Vinson of the
House Ways ana Means Committee
has indicated to the press that he be-
lieves a law can be drafted to exempt
88 per cent of all the corporations. But
this is dealing with the subject by
halves. If the principle of the undis-
tributed surplus tax is wrong for some
businesses, it is wrong for all busl-
peSses. AS matter Of fact. SO per
cent of all the corporations might ac-
tually mean a small volume of the
total sums earned that could be put
into business revival. 1t isn't the total
number of the corporations. but what
they do and how much they earn that
counts in appraising the good or bad
effects of tax legislation.
Thus 88 per cent of the corpora
tions earn only about 10 per cent OF
the taxable income Corporations can
be formed very easily and there are lit
orally thousands of corporations that
do a small volume of business. To put
1t another way, u per cent of the cor
poratlons earn 80 per cent of the to-
tai taxable net income of American
business corporations
1t also would be found that the II
per cent employ most of the workers,
buy most of the raw materials and
generally constitute such a big factor
in the revival of business as a whole
that any change in the law which neg
lects the II per cent is virtually no
change at all.
Roosevelt Knows Facts.
President Roosevelt is aware of the
widespread demand for revision of the
undistributed surplus tax law, and he
told the press Friday that he wants
something done at the earliest possible
moment. But he is also saying he
wants a well-rounded tax program as
whole and this means that until the
whole program is completed the ad-
ministration doesn't want 10 do any
thing about the undistributed surplus
tax
This. however, does not meet the
present crisis What the business men
want to know is whether they must
count on the undistributed surplus tax
for 1887, 1t is true they have until
March IS to make out their tax re-
turns. but it is this very month they
do much of their budget planning for
the calendar year 1898, and they must
know how much cash they must have
left after paying taxes.
Senator George of Georgia, Demo-
rrat. says he wants the new tax re-
vision to be retroactive-that is, he
wants the calendar year 1887 to be
figured on the new rates Others in
Congress have expressed the same view
Representatives are pressing this
point.
Repeal Would BE Simple.
1t would be a very simple matter
Tor both houses to put through over
night repeal of the undistributed
surplus by joint resolution This
might also provide for a fiat corpora
tion tax or even a graduated income
tax with narrow brackets, because the
moment the tax is placed on mere
5tgneSs or size of profits. incentive is
killed and the unemployment situation
Is not cured.
The President is saying to the news
paper men that he does not want any
hasty legislation and that his admin
1stration has been criticized for JAM
ming measures through, but it seems
1ronical that a tax bill which was
tammed through without full con-
sideration cannot now be repealed lust
as speedily when the whole country
has given mature consideration to the
actual operation Of the tax and con-
siders it practically the most vicious
piece Of lawmaking and deflation in
the whole economic history of the
United States.
Not Pushing Revision.
The administration is not pushing
tax revision as earnestly or as effec-
lively as 1t might. The business men
OF America are entitled to know with
In the next 20 days how to plan for
1898 and the present business recess
sion will not be relieved by the in
eptitude of Congress or the unwilling
ness Of the Executive to make turn
about promptly. For the truth is
Congress, far from being the inde-
pendent institution it was reported
to be when the special session was as
sembled. is still controlled by rubber
stamp leaders and rubber stamp fol-
lowers and one-man government still
controls the destinies of our economic
system.
II the foregoing seems incredible to
some who still believe in Congress as
:. . truly legislative body let them note
this headline from Washington
morning newspapers front page with
In the last day or SO:
"House won't free tax aid bill until
Roosevelt asks for it: Ways and Means
Committee to adhere to wishes of
President; action scheduled for next
session"
In other words. the Ways and Means
COMMITTEE feels it can ignore the de-
mand for action now because it has
not suited Mr. Roosevelt to give Con-
gress the go-ahead signal That's one
man government with rubber stamp
Congress.
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