Evening star., 1940-05-29
Paying the Bill

The United States, faced with the
inescapable necessity Of building up
its armed forces as a safeguard
against the spreading menace of
totalitarianism, has reached the
point where it has no alternative
but to lift the $45,O00, 900 900 debt
limitation imposed by law on the
Federal Government. For those who
have been deeply concerned by the
successive years of large Federal
deficits, and The Star is among their
number, it is step to be taken with
deep regret. But 1t must be taken.
This is matter which goes di-
rectly to the question of insuring our
national security. At the present
time our defense equipment is wholly
inadequate in view of the demands
that may be made upon it in the
near future. The appalling fate
which has overtaken the unprepared
democracieS of Europe should con-
vince the most skeptical American
that our primary duty now is to
prepare for the worst that tomorrow
may bring, and neither resentment
aroused by past extravagances nor
respect for an arbitrarily imposed
debt limit should be permitted to
stand in the way of achieving that
objective.
AS a first step toward paying the
rearmament bill, the administration
has proposed that the debt limit be
raised to $48,OOO,OOO,OOO The ma
tional debt at the present time is
just under s43,0oo,OOO, 900, and when
the anticipated deficit for the next
fiscal year, plus the added expendi-
lures for emergency defense require
ments, are added to the present
Indebtedness, the existing debt limi-
tatlon will have been exceeded. AS a
matter OF simple arithmetic, there
fore, Congress has no choice but to
increase the total debt which the
National Government is permitted to
assume.
To a very considerable extent,
however, the undesirable aspects of
this necessary move are offset by the
accompanying administration pro-
posal to levy new taxes calculated to
raise s60O,OOO,000 a year for five
years. 1t has been suggested that
this new revenue be used to retire
the S3,O0000 900 in defense bonds"
which the Treasury plans to issue
when the debt limit is lifted, and, if
future circumstances permit, that
should be done. In any event, it was
highly desirable that a new tax pro-
gram accompany any relaxation Of
the debt limit, and the administra-
ton Is to be commended for taking
this normally unpopular course in an
election year.
In this connection, however, 1t is
important to keep in mind the neces-
slty OF enacting sound tax legislation.
The administration has not made
public any specific recommendations,
but there has been a suggestion at
the Capitol that the bulk of the
additional revenue be raised by i'm
posing a super tax" of ten per cent
on the present income levies. Adop-
ton of such a program, while offering
an easy solution of the problem,
would be both unfair and unwise.
In 1888 only 1871 900 persons
some two and one-half per cent of
the total population-paid Federal
income taxes. If the new tax burden
is to be saddled onto this relatively
small element of the population, it
means that the vast majority of
American citizens, although they
would share equally in the benefits
OF adequate national defense, would
make little If any direct contribution
to the cost of providing it.
In Great Britain, where the tax
base is broader than in the United
States by virtue of the fact that per-
sonal exemptions are lower, income
taxes were paid by seven and one
fourth per cent of the population in
1878. 1t has been estimated by
Senator La Toilette that broaden
ing of the base in this country by
reducing the exemption of single
persons from $1,000 to $500 and that
OF married persons from $4,000 to
$4,000 would create 1.4O0. .OO0 new
taxpayers.
1t is true that the added revenue
from this source would not be great,
but 1t would have the desirable effect
of distributing the total tax burden
over a larger segment of the popu-
lation, and it is to be hoped that
President Roosevelt will repeat his
recommendation of last summer that
some broadening of the tax base be
approved by Congress.