The Western news. [volume] (Libby, Mont.) 1933-current, 1938-12-29

WASHINGTON Despite all the
propaganda for incentive tax re-
duction both for expansions which I
would make work and for profit
sharing with employees--no action
Of the sort will be taken. Instead,
income taxes will be i
fixed at Is per cent instead of the |
present range from l6l2 to 10 per /
cent. Congress leaders would like
to wipe out the last trace OF the
punitive tax on undistributed earn
ings, but any such move may not
succeed because of stalWart White
House opposition to elimination of
President Roosevelt's pet tax the
ory. But another step in that direc-
ton seems inevitable.
Congress is set on substituting
straight ID per cent for the present
sliding scale because the national
legislators are convinced that the
present system bears more heavily
on small business men and manu-
faeturers-tf1at the big corporations
are taking advantage Of the lowest
rate by paying out their earnings,
having adequate SURPRISES to make
this possible, whereas little fellows
are forced to insure their future by
building up SURPRISES, which makes
them pay 10 per cent as against l6i2
per cent for the big ones.
The treasury department is not
adverse to the straight 10 per cent
if it could 60 for il without irri-
tating- the White House. 1t believes
the straight 10 per cent would bring
in more money-alWays Secretary
Morgenthau' chief interest.
= Roosevelt will fight again for more
drastic capital gains taxes, but will
be defeated incidentally the tax
bill will be slow in passage as no
subcommittee we're left on the job
and start will have to be made
from scratch.
4rnly and Nary ire Noio
Spending Billion Year
No big boost in spending will
come from national defense, how
ever much the White House may
approve that picture for public con.
sumption. Actually the army and
navy are now spending at the rate
Of billion a year. A boost OF
about $500, 900, 900 between them,
plus their existing balances, is all
they can spend, experts say, no mat
ter how much more may be author
lied or appropriated
The real fear of the deficit Wor-
riers centers on the agriculture,
flood control and health programs.
No one can foretell- just how wild
congress will go On these three
Secretary of Agriculture Henry A.
Wallace wants processing taxes to
take care of the increased agricul.
tural benefits but congress will dis
pose otherwise. The money must
come from taxes--or increased debt.
Flood control threatens to take
the place of the old rivers and har.
bors pork barrel bills of unsavory
memory. Every creek in the coun-
try has become flood menace.
why should Tennessee get all the
bacon?" is a popular question.
Federal aid for health services
is nebulous but very menacing to
the treasury's red ink supply.
Tmo-Price System Blors
Up Wifh Resembling Bang
The subsidized export plan for
relief of the farm problem, better
known as the "tWo-price system,
has blown up with resounding
bang. One shipment of wheat to
England, and it passes into history
as another flop on the well Uttered
road to agricultural prosperity by
governmental eantrol. ==.=
What happened was precisely
what was predicted would happen
: 1t is also what was predicted would
: happen when the solution OF the
farm problem-back in the days oil
Calvin Coolidge-was the McNary.
Haugen plan,
In those days the McNary-Haug-
en- plan was regarded by most con
| servatives as crackpot But it had
a good many features which now
commend il to folks who were called
| conservative 10 years ago. For in.
| stance, the much talked about equal.
ization fee. That was the ingredi
ent in the plan which would have
prevented the farmers from going
hog wild on overproduction. Or al
least it was so argued
1t was the two-price system Of its
day, but it had brakes The equal.
ization fee was the brake. Theoreti.
cally Il would not cost the govern
ment anything. The loss on wheat
exported at lower price than was
charged inside the United States, for
example, would be assessed against
the wheat farmers, pro rata. So the
more produced, and hence the more
the loss on exports, the smaller the
actual price the farmers would get
for their wheat.
But it was predicted then, and
apparently with good reason in view
of recent developments, that the 9th,
er nations Of the world would no,
stand for this substituting Of ex-