Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1939-04-20

came before the House Ways and
Means committee, which for the past
nine weeks has been holding hear
ings on Social Security revision, and
advocated the very plan for which we
have so long commended. He admitted
that our criticisms of the full reserve
were valid and that payroll taxes
were unnecessarily high at the pres
ent time. He offered four alternative
suggestions for modification of the
payroll tax structure, one of which
would permit a deferment of the in
crease in the payroll tax which is
scheduled for next year, until 1943.
The secretary made it plain that in
his opinion the proposed increase in
the rate next year would have a
lettering effect on business recovery.
My greatest objection to the pay
roll tax is that it has created more un-
employment because the fewer per-
sons on the payroll the smaller the
tax, so the employer has every in
centive to keep the number en-
ployed at the lowest possible level.
Let Congress Do 1t.
The administration has hurled a
challenge at Congress to balance the
budget. In a statement that must
have had administration endorsement,
Chairman Eccles of the Federal Re-
serve board told a special Senate
committee that the majority of peo-
pie apparently want the budget bal
anced and that the will of the ma
jority should prevail. He therefore
urged Congress to get busy and bal
ance the budget.
Mr.. Eccles left no doubt that his
own views were unchanged, that he
still believes in the spending-lending
policy. He even went further than
that and declared his belief that a
cut in expenditures would be dis
astrous. But if the majority is con-
WINGED that a balanced budget will
aid recovery, why doesn't Congress
60 to work and balance it?
Probably the administration thinks
that this maneuver of placing the
job in the lap of Congress is good
political strategy. Then if Congress
should undertake to balance the bud
get and succeed, the Administration
could take the credit for having sug-
gested such an attempt. And if Con-
gress failed or its efforts proved dis
astrous, the Administration could say,
I told you so.
The fallacy in the administration
challenge is, as Senator Harrison has
said, that no one believes that the
budget can be Immediately balanced.
But the majority of people believe
that the present spendthrift policy
which the administration has followed
for over six years can be abandoned,
and that steps should be taken to
begin a gradual curtailment of ex-
penditures with the prospect of a
balanced budget within a reasonable
time.
Even the most conservative esti-
mates concerning efforts toward a
balanced budget have figured that
such a result would require at least
two years. Moreover, it is well
known that this result cannot be
achieved without the cooperation
of the President.
The administration is responsible
for the steady growth of Federal ex-
penditures which have doubled since
1888, and now it cannot sit back
smugly after it has got the country
into its present financial plight and
throw the problem of getting out on
someone else. To bring about a bal
anced budget it will be necessary that
the executive and legislative branches
of the government cooperate whole
heartedly.
A Fiction Dies.
In a few carefully chosen words,
the Supreme Court struck down
legal fiction which had resulted in
the setting up of a privileged class
among American taxpayers. For
nearly three-quarters of a century
the court had chung to the doctrine
that there was an implied constitu-
tional immunity which prevented the
Federal government from taxing SAL
aries of state employees and the
states from taxing the incomes of
Federal workers.
This doctrine had it's origin in a
statement by Chief Justice Marshall
in his famous opinion in the case of
McCulloch VS.. Maryland that "The
power to tax involves the power to
destroy" This observation found
ready nourishment in the lively jeal-
ousy with which the Federal and
state governments guarded their re-
spective perogatives, and from it
sprang the chain of decisions which
carried the principle of reciprocal
immunity from oppressive taxation
to absured lengths. The result was
that state, county and local municipal
employees were exempt from the Fed
eral income tax and Federal employees
were exempt from state income taxes.
Thus the respective governments
were denied access to a substantial
source of revenue in return for judi
cial protection against wholly fanci-
full impairment of their sovereign
functions.
In overruling the cases which had
established this immunity, the court