Evening star., 1938-03-15

thrift and pru- S.
dence-the indus n.y,d I..n,.
try experts pro-
claim loudly that $40, 900, 900 in revenue
has been lost" and that it must be
made up somehow. Then the admin
tstration's procedure usually is to
propose some even more vicious tax
which will hurt business even more
not Intentionally, of course, but based
on some newfangled notion of So
called reform.
What is indeed puzzling is why the
administration does not say, well, if
$4o,000,0O0 in revenue is not going to
be available, maybe we had better look
somewhere inside of that $1,000 OOO, 900
annual budget and find out if we
cannot possibly lop off 10000 OOO."
After all, $4O0Oo.O0O is just little
more than one-half of l per cent of
the entire Federal budget for year,
and it is quite possible for economies
to be found which would take care of
bad clause that has been removed
from the tax revenue list.
Must Yield, WilIy-NilIy.
1t Is most disappointing to find the
administration, year after year. looking
et the subject of taxation through the
spectacles of an executioner of profits
rather than constructive helper of
employment 1t apparently doesn't
matter to the Roosevelt spokesmen
nov much damage tax does, so long
as 1t gouges the taxpayer and results
N q yield of a certain number of
collars and cents.
Thus the principal motive behind
the undistrlbuted surplus tax was not
ssvenue-getting at all 1t was puni-
tive. 1t was tax aimed at forcing a
cnange in the whole economic system.
) The real reason for forcing dividends
into circulation, even though it weak
ened the capital structure and re-
serves Of business. was to follow out
the half-baked theory OF certain
treasury officials on the subject of
how the American economic system
should be administered.
The undistributed surplus tax had a
great deal to do with bringing on the
present Roosevelt recession. 1t never
yielded the revenue which the spon-
sors OF the proposal promised and 1t
probably did many times the damage
IN dollars than came from the actual
receipts Of the tax.
Take also the proposed tax on what
are termed CLOSED" corporations
which are in reality famfly-owned af-
fairs built up by father and son or
close relatives. The House of Repre-
sentatives refused to countenance this
form OF tax insanity proposed by Mr..
HooseVelts experts and now the Treas
ury Is complaining that the expected
revenue from that tax must now be
made up somehow.
Policy Of Punitive Taxation.
, The whole procedure shows a lack
OF planning and a lack of understand
Ing OF the basic principle which Ameri-
can business considers is at the root
OF our present trouble in the business
world. namely, the difference between
incentive to make profits out of which
taxes can be collected, and punish-
ment for being successful. The ad-
mlnlStratlon denies the charge most
Vehemently, but its acts speak louder
Than Its words-punitive taxation is
ingralned in administration policy to
such an extent that rubber stamp"
congressman on Capitol Hill are quak-
ing in their boots lest they incur ad-
mlnistration displeasure by voting
against some of the newly invented
1orms OF torture for business through
so-called tax revision,
The record thus far in Congress has
been that the term destructive ts
probably too mild to apply. A sup
posedly responsible group of represen-
tative people has been meeting for
several months while the country has
been clamoring for some relief that
might help business get on its feet.
Business is in the throes Of one of
the most severe downward. curves
IN all American history. In some
respects. the precipitate nature of
the downward movement of business
within . given length of time has
no precedent or parallel And vet.
when business says it cannot 20 ahead
unless there is an equitable tax system
and better handling of Government
expenses, the administration shows n
remarkable indifference to such pleas
and deliberately introduces new kinds
OF taxes further to impair confidence
In the future.
Public Has Recourse,
Under such circumstances. the
american people are going to have tn
decide whether they want to clean out
the rubber stamps in Congress or
continue to suffer from the rayapes
OF depression which will not he
cured till the persons who have the
responsibility Of operating businesses
can see daylight ahead.
Handling Of the tax bill has revealed
that the administration really has not
taken seriously the advice of its own
friends in the business world, but has
insisted on forcing down the throats
OF the members of the House more
and more punitive taxation. There is
evidently no intention Of needing the
demands Of the Nation that the Gov
eminent exercise better business judg-
ment in the matter of its own expenses.
Some day there will have to be .
house cleaning in Washington or some
manifestation Of displeasure by the
country so pronounced As really to