Evening star., 1939-05-21
Believes Higher Toxes
Will Be Inevitable
By OUen L. Scott.

exClCe ana warm tlle neartS OF the Ma
tion's businessmen.
After White House visit, these lead
ers have proclaimed their intention to
push ahead with changes in tax laws
that will remove the shackles from
business, provide justice for every one,
produce sufficient revenue for the Fed
eral Government and result in indus
trial recovery.
There are suggestions that Congress is
about to provide prescription for pain
less taxation
All of this has familiar sound to
any one acquainted with the workings of
Congress and with the inexorable nature
OF taxes. Yet experience shows that
there always is novelty in promised pan
aceas, and the country once more is JUS
titled in wondering whether Congress at
last has found the formula for which
politicians have been searching through
the centuries
1t now can be revealed, however, that
taxpayers who have been banking on
this Congress to provide the long sought
formula are doomed to disappointment
in spite Of the high hope held out to
them by Senator Pat Harrison and his
senatorial followers. The hero role of
1889 promises to be of about the same
lasting value as the hero roles of 1888
and 1887 and of the years preceding.
Actually, taxes in this country-both
on business and on individuals-are 60
Ing to be increased drastically in the
years ahead, If disaster is to be avoided
The reason why this is so is that
members Of Congress, including the
same leaders who talk tax reduction and
tax adjustment, vote for constantly in
creaslng expenditures of Government
money at the very time when they are
demanding relief for taxpayers.
In the midst of the battle, President
Roosevelt is pictured as standing ada.
mant, determined to keep his present
taxes even If 1t means continued depres-
sion While Henry Morgenthau, Secretary
OF the Treasury, and members of Con-
gress are striving valiantly to end the
taxes that deter recovery.
Dit OF inquiry reveals that the Presi-
dent and his Secretary of the Treasury
nave been consistent in their tax stands
and that they have understood each
other on this subject for long time.
Two years ago, Roswell Magill, then
onoerSecretary Of the Treasury, COM
pleted much more comprehensive study
OF taxation than any recently made bv
the Treasury That study led to conclu-
SONS that called for important changes
IN the tax structure. Mr.. Magill took
his study to President Roosevelt at HYDE
Park.
Inc President according to those who
are acquainted with events, told Mr..
Maglll that his work was'excellent But
he insisted that taxation was a respon-
slolllty OF Congress. The Undersecre
tary could go before the congressional
committee and could answer questions
II congressman asked about his study.
ne could tell them his views. But it was
10 be understood that the White House
was advocating no tax program. Mr.
Roosevelt remembered that he had heen
called a dictator for suggesting taxes
in the past.
The President has not changed his
attitude on taxes since 1887 He has
simply insisted that Congress take the
responsibility for taxation-because its
leadership objected to White House re-
sponslolllty-and that tax revenues must
oe increased to cover the cost of any
unbudgeted items of expenditure
since that time Congress has gone on
increasing expenditures, but has baked
at providing taxes to cover those added
expenditures
AT this time the country is witnessing
another phase of that effort on the part
OF the congressional leadership to get
out from under the responsibility that
freSloent Roosevelt is striving to force
Inat leadership to accept The promise
OF the Congressman now Is to remove
the "deterrents" from this Nations tax
laws. There is no new promise to raise
taxes IN order to obtain additional dol
lars to cover the cost of larger appro.
prlatlons than the President requested
Nelther Is there any attempt to make
a scientific revision Of taxes along the
lines laid out in the study completed two
years ago by Roswell Magill.
The real fact of the matter is that
| from the point of view of recovery. the
| experts find two sets Of taxes and one
lack OF set of taxes as most vitallv
important. So far as can be discovered
Congress is very little interested in these
three fields
| Ihe greatest single tax deterrent to
| American business is found in the pav
roll taxes to support the social security
structure. That tax system produces
| more money than the entire income tax
levied against all corporations. Its Weld
is more than billion and a quarter dol
lars annually. Those dollars come from
employers regardless of whether or not
| they are making money. They come in
largest quantities from employers who
employ the largest number of workers in
proportion to the value of the output.
Ihey discourage wage increases and dis
courage employment.
Yet Congress Is showing no great
amount OF enthusiasm for restudying the
whole problem of pay roll taxes. Neither
is Congress rushing to perfect plans for
removing part of the deflationary effect
OF these taxes by providing for earlier use
OF the money to meet the problem Of un-
employment and of old age.
&*
The next greatest tax deterrent is that