Henderson daily dispatch., 1938-01-14
Federal Sales Tax Soon
Inevitable, Babson Says
CONTINUED from Page oneo

UdSS diil SutIiiiS UOWn on exemptions |
would have two important results: |
(a) 1t would make millions of, citizens
moro directly concerned with public |
spending. CD 1t would produce an adj |
ditional revenue of perhaps $500,0C0- |
600 per year.
( 2. Pare Down High Income Taxes,
The last bracket on the income tax
schedule takes rs Fer cent of an indi-
viduals earnings in that bracket. No
one claims that a rich man needs a |
81 ,OG0 600 annual income to live; hut
he does need much more than this to
keep his business up-to-date. He will
not borrow money. He cannot sell
stock. Hence, in most cases his only
source of new capital is from his OWL
income After paying taxes, large en-
ployers do not have enough money
left to keep their businesses running
as they used to run, or to employ As
many people as they formerly employ
ed. The taxes on high incomes should
be cut down. These same comments
apply to estate and gift taxes. Ger
tainly, provisions for payment of in
heritance tariffs must be altered
8. Reduce Capital Gains Assess
ments: II the Federal Governments
big source of revenue is to be the in
come tax, then incomes must be aid
ed in every conceivable way Hence.
my opposition to big capital gains
tolls. England has problem similar
to ours. But she bears down on the
incomes and leaves capital gains alone
Her theory seems logical: Encourage
the individual to make Investments
to start novel enterprises, to open new
mines, SO he will make more money:
then he can pay an income tax year
after-year. Assessing capital gains
heavily is like killing the goose that
lays the golden eggs.
t. Eli .ina.e Exempt Securities:
Under present tax schedules wealthy
mans capital is shunted from bust
ness into tax-free securities such as
government, state, and municipal
bonds This is bad policy. It makes it
difficult to secure new capital for bus
mess enterprises. There are aGou!
$56, 100000 in non-taxablc secui<-
ties outstanding today. Naturally,
these cannot be taxed but income
from new public bond issues should
,,e assessable. Besides forcing money
into business channels, eliminating
tax-exempts should also tap a steadily |
increasing source Of new revenue for
the Government On the other hand |
it would make public financing more |
difficult and more costly, and prices
of public bonds more unstable.
s. Tax Government Employees: A
rnong the unfair angles of the tax
muddla is the exemption of govern
ment employees from the income tax.
During the depression, the average
public official had his pay cut only
10 ger cent, while the average private
citizens salary dropped as much as so
per cent. Stability of income is ex-
emption enough for our vast army of
public office-holders. BY taxing them,
not only would the Treasury pick up
a good slice of new income but it
would make another group-and one
very much in need of it-more con-
scious of public expense.
6. Remove The Undistributed Pro-
fits Tax: Of all the legislation recent
ly written, the undistributed profits
tax is probably the worst 1t is 1ll-ad-
viscd, short-sighted, and contrary to
our ideals of thrift. 1t threatens the
stability of all industry. Although it
would be temp orarily deflationary
step, this tax should be wiped off the
statutes.
Z. Set Aside Social Security Funds:
contributions" to Social Security are
being tossed into the Federal Kitty
along with all other revenues. In re-
turn, the old age reserve fund is De-
ing given en- l. o. U. by the Treasury
The levy, therefore, is just an excise
tax on all employers and an income
tax on every employee. In my opinion
the present handling of these funds Is
lust short of public embezzlement. If
workers are to receive their old-age
pensions in sound dalloras, these 1unos
must be definitely earmarkad ana IN
vested in productive enterprises
which means in other securities tnan
government bonds.
8. Clamp Down on Special Local.
Taxes: The sharp growth in state and
city trade barriers is dangerous ten
dency. It means not only discrlmlna-
tory double assessments, but also the
hindarinq of the normal flow of ma
tional commerce. Today there IS
growing feeling among states tnat
thew place imposts on goods import
ed" from another state. In erect
state tariffs are being erected Chaln
store, "use," and special sales taxes
ports of entry, special truck licenses
are encouraging the growth OF evil
backward sectionalism. This must DC
stopped. IT.,
Q Lower Real Estate Taxes: The
backbone of national prosperity is the
building industry. Yet, real estate
bears the burden of 70 per cent OF our
local taxes. Municipal tax rates are
rising all over the nation. Assessed
valuations are almost universally TOO
biqh. In spite of vast sums poured IN
to local Golfers by Washington IN the
last five years, few communities nave
No, economies or taken up slack.
Pei estate lavies and high construc-
go, costs are choking building. NIL
nicinal expenses must be cut SO that
18th valuations and tax rates can be
10 CITY Public Spending Most i'm
nortant of all, we need courageous
= soTt-face in public fiscal policies
c,,rrnnt false-notions that the govern
rnentv has an unlimited reservoir OF
cash at it's disposal must be banished
L. G