Evening star., 1941-07-12

ltSeH. Many per-
sons. forin- David Lawrence.
stance, have in past years trans
ferred property to their wives or
husbands and paid a gift tax on
the transfer. This was a proper
thing to be done under the law, but
now, a gift tax having been paid,
the Government will not reimburse
individuals for what they have paid
but will penalize them by forcing
joint return on the property.
which will be considered hereafter
as if it were in its original status OF
single ownership.
If the Government. moreover,
were to decree that all married per-
sons must pay taxes on joint re-
turn basis, the proposal would not
be so vulnerable, but to establish as
8 classification for tax purposes only
husbands and wives who live to-
gether, while exempting vast num-
Der who do not live together and are
not divorced, is to raise questions
of constitutionality as they relate
to historic principles that require
equal application of the laws as
between citizens.
Classification Attacked.
There are clasSifications for tax
purposes of married persons as dis
tinguished from unmarried and the
principle Is based on the economic
fact that married persons are given
certain exemptions due to the costs
of their families. But there is no
justification for division within
the ranks of those married. Yet
one of the proposals is to make the
joint return applicable only to per-
sons with joint income of more
than $1,000 a year-a wholly ca
PRECIOUS and arbitrary classification.
Many business transactions also
have been consummated during the
present year by married women,
such as sales of assets calculate on
what has been the tax policy here
tofore, but now it is planned to
make higher tax rate apply. 1t
would be fairer if the joint return
applied as of January l next to
incomes received by the citizen dur
ing the calendar year 1912.
The so-called objective of the law
is to gather income from citizens
In the community property States"
of which there are several. In those
States the husband and wife may
pay taxes on half of their joint in
come irrespective of whether one or
the other earns 100 per cent of it.
If the Congress intended to elm
mate this discrepancy it could legis-
late to the effect that earned in
come should be the income of the
person who earned it and income
from a trust created by a husband
for wife would hereafter be deemed
his income. Plainly some exception
should be made in any event for
income from the separate estate Of
a wife which existed prior to the
time of the marriage or which ex-
listed prior to January l, l94l.
Roosevelts' Income Cited.
One of the aspects of the joint re-
turn which is causing some discus
sion is its possible effect on the
income taxes of the President and
Mrs Roosevelt. Under the Consti-
tuition, the Presidents salary can
not be diminished during the term
for which he was elected. Thus any
tax bill passed during Mr.. Roosevelts S
third term would not affect his in
come. But Mrs. Roosevelt is not
exempt from tax bills and if her
income were Jumped with that OF
the President, it would mean that
she would pay the higher tax.
Doubtless the Presidents salary
would be exempt from any reduc-
ton by taxes but what would be the
status of Mrs Roosevelt's taxes?
Would the Presidents salary be
Jumped with hers and cause her
portion of the tax bill to rise?
Justices of the Supreme Court and
Federal judges are in the same boat.
Obviously it will not sit we'll with
the citizens to see some of the
highest officials of the Government
exempt from the operations of the
joint return.
The principle of capacity to pay
is we'll understood doctrine of tax
alton but discrimination as between
citizens equally able to pay is not.
The mandatory joint return may
have some curious social effects in
delaying marriages or in encourag-
ing separations because of the flnan-
eial advantages therein to one
or the other of the parties. But
the principal reason for abandoning
1t is that the Government will not
have played fair with the citizen.
The people do not object to heavy
taxes as much as they do to taxes
involving discrimination and I'M
fairness. To disturb existing rela-
tionships in which the Government
itself played a part by accepting a
gift tax is to deal inequitably with
the citizen. If the joint return is
deemed to be an essential part of
our taxation system hereafter, the
Government ought to reimburse the
citizen for gift taxes paid by hus-
bands or wives IN the last decade