Evening star., 1938-01-06

cAoSlly lloW uluSll David 7
taxes have been
collected by the Federal Government
each year since 1881. 1t shows that
from $3,189,O0O,000 in 1881 the tax
receipts went down to low point OF
$2,oo5 900 900 the next year. and then
started up again slowly until for the
fiscal year ending June 30, 1888, they
are to amount to $5,749,000,000, ex-
elusive of social security or pay roll
taxes, which are supposed to be trust
fund.
Above All-Time Record.
Now this last figure represents a
peak and is slightly above the S5,726,-
100000 collected in taxes in the war
prosperity year of 1920, a record for
all time.
Having reached the peak in the fis-
cal year 1888, the estimates Of taxes
to be collected in the fiscal year 1889
now are shown in the Presidents
budget message to be $5,32l 900, 600,
which is also exclusive of social Sc
curity or pay roll taxes.
= This downward trend is not in it
self the only important fact, but what
it means in relation to the normal
expenses of the Government or what
Is expected to be normal as the Presi-
dent now characterizes budget of
$1,000 900, 900.
An analysis of the Presidents fig
ures, which, by the way, are the most
complete ever issued on fiscal affairs,
shows that the Federal Government
now has been running along on a
budget of about s5,3Oo,0000Oo more
or less for everything except emergen-
cy relief expenses.
This about equals the tax receipts.
What is needed is approximately ST.
66e, 100000 more in tax receipts, or
that same amount in economies.
Examine Expenses.
It is pertinent, therefore. to examine
the expenses over and above the regu-
lar departments and agencies. 1t will
be found that the Government has
been spending about 81 1913 ,O00,o for
Works Progress Administration known
as w. P. A., and about $500, 100000 for
public works through the P. w. A,
and about s50O,o 100000 for agricultural
and other subsidies. In the fiscal
year 1897 these extra items came to
about $2,783, 100000.
In the present fiscal year these items
are to be handled with somewhat
smaller expenditure variously esti-
mated at this time but it looks like
about $1,500,000 The deficit will
not reach that sum because there are
some miscellaneous receipts such as
repayment of old loans which will help
to cut 1t down, but the truth is the
Nation faces the fact that the tax
collections are not large enough and
will not be large enough under the
present system to offset these extra
expenses.
Certainly the item of relief will
have to be continued as long as there
are somewhere between 100000 and
100000 persons unemployed as re-
vealed by the recent census. This may
run around 0OO,0OO,OOO. Then there
Is the subsidy for the farmers which
Is becoming an annual or regular part
Of the budget, 50 that if we are ever
TO balance the budget and begin to
have a surplus with which to retire
debt some way must be found to add
st least about $500, 100000 to our
Treasury receipts.
Hopes For Income Rise.
The Presidents hope Is that the
national income will rise steadily.
This means that velocity OF transac-
tions or total volume must be in
creased. 1t means, too, that some way
must be found to multiply business
transactions through greater produc-
tvity or intensification of the home
market or the foreign market or both.
Judging by the tax curve, the impo-
sition OF more taxes on the present
national income will only mean a
breakdown in the national income
itself. In fact, if it were politically
feasible, the Government could well
ahord to revise the whole tax structure
downward and take . temporary loss
In receipts as an investment toward
actually stimulating q greater total
Of tax receipts the following year and
the year thereafter.
What the administration has been
unwilling to accept as yet is the rule
that the lower the tax rates the greater
the volume Of business and hence the
greater the total volume of tax collec-
tions and actually the smaller the
sums needed for relief, whereas the
higher the tax rates, the greater is the
burden on business, and on the con-
sumner who is asked to pay for the
osss In higher retail prices.
The future Of American prosperity
and. indeed, immediate recovery is
tied up with such = general revision
oe the tax rate system as to provide
nal incentive for the increasing of
he national income. Uncle Sam must
pat out low-priced model, so to speak,
and depend upon volume hereafter
instead Of depending on high tax rates
that have not and cannot produce
enough revenue because there are not