The Waterbury Democrat., 1937-04-26
BEHIND THE SCENES
 lN
 WASHINGTON AWv ROONEY DUTcHER-i Waterbury Democrat Washington
New Federal Taxes Considered 5O-5O Bet Despite Roosevelt's Re- assurance to the Con- trary.
.WV ROONEY DUTcHER'

assurance 10 the Ion"
 trary.
 Washington, April 26. = New fed- eral taxes within the year, despite reassurances from tr, White House and Capital Hill, still look like a 50-50 bet.
 The President of the United States has a delightful talent for diver gency in his remarks as to the bud get and the federal finances from time to time. His best friends have to agree with his worst enemies on that fact, although they point out that the picture, of course, also changes.
 T am convinced" MT. Roose-
 welt has now said, that success
 of our whole program and the per-
 manent security of our people
 demand that we adjust all ex-
 penditures within the limits of my
 budget estimates" On the other hand, there are these points:
 | There is no assurance what A' ever that Congress can be kept within the budget figures. It will be an unusual Congress if it is.
 To Roosevelt has asked for $l,- G' 500, 900, ,O00 for 1937-38 work re- lief and experts agree that he will feel compelled to ask for more later to get through the fiscal year, .un- less the federal relief policy is to be radically changed.
 ? The administration is now O' more deeply concerned with the need for balancing the budget than ever before. There is reason to believe it will prefer to tax rather than borrow further beyond present anticipations.
 A Conservative Democrats favor
 F. keeping the WPA appropria- ton down to a billion dollars in- stead of billion and half. RooSe- welt has insisted he will not com- promise on that point. The indica- tion is left that the conservatives, who prefer to cut relief expenses rather than other costs, will be stubborn about holding down those other costs and try to place the blame on the President and his in- sistence on maintaining the WPA policy.
 k Nearly all Rooseveltis closest 0e advisers. except Secretary Mor- genthau and the Treasury group, are convinced that the wisest policy is to raise income taxes. They will continue to insist to the President that the only way to keep the ec- onomic system in balance is to si- phon off a larger share of big profits and big incomes in order to pour them back into the bottom economic levels. This may be the most im- portant factor of all.
 e The First Circuit Courts de- V' cision holding the federal old age benefits payroll tax illegal al- ready has begun to stir up those who believe a federal old-age ben- eft system should be financed from the proceeds of income taxes. If the Supreme Court should now up- hold the lower courts adverse de- cision, the demand for the latter method of financing might well be- come overwhelmingly strong, re- sulting in legislation requiring hun- dreds of millions of dollars il new revenue at once. Insist on Tax Hike
 David Cushman Coyle, through publication of hundreds of thous- ands of his little books - Brass Tacks," Common Sense," and "Age Without Fear"-has become perhaps the most widely read of economists. He is among those who urge high CT income taxes at this time, and insist that the old age security sys- tenn should be financed in that manner.
 Governor Mariner s. Eccles of
 the Federal Reserve Board, prob
 ably is the most conspicuous ad-
 wiser on the inside of the New
 Deal who urges higher income
 taxes and exceSS-prOfitS taxes as
 a means of keeping what RoOse-
 welt has called the economic cir
 culat0ry system" working. But
 there are several others very
 close to the President who keep
 telling him the same thing.
 The argument of this influential group is that the cycle of higher prices and higher profits inevitably means drain which will dry up the "circulatory system" unless ma chinery is used to keep pumping in come and purchasing power back into it from the top. The situation, they insist, calls for much heavier taxes on the higher income brackets and somewhat heavier taxes on the lower brackets. Some members of this group have fought other mem bers bitterly in the past. But when you take them all together, united as they are now on this program, vou have a force which many in- siders believe is bound to win sooner or later.
 Repeating Own History If Roosevelt comes back next Feb ruary to ask Congress for more re- lief money, he will only be repeat ing his own history. Some of the $l 500 .OO0, 900 asked for next fiscal year probably will have to be ap- piled to WPA for the tail end of the current fiscal year. The U. s. Con- ference of Mayors year ago estl- mated 1e36-37 WPA costs at $2.- $40, 900 900. Actually the costs are running somewhere over $23OO, ,000,- 900. This year it has been said