The Waterbury Democrat., 1941-08-15

RAeon collect fir o m
 various gents = the new ones who haven't been touched so heavily before, but more particularly the ones whose business may be subjected to considerable curtailment of production by pri- critics or price control and the other hazards of a wartime econ omy.
 What the tax bill sets out to do, of course, is to raise an additional $3.5 billion by increased or new taxes on about 40 items. To arrive at this figure, considerable head scratching, pad scratching, research and statistical estimating had to be done by treasury and congressional tax experts. And while their figures are as good as any, the fact re- mains that so uncertain are the ef- fleets of the defense effort on bus mess that the tax bill itself may be obsolete before it is passed by the Senate some time in September or October and signed by the Pres ident.
 Consider, for example, the tax on new automobiles The rate has been doubled. bringing it up to percent, and the base has been revised to take into consideration the fact that the production of new passenger cars for civilian use has been cur tailed by approximately 20 per cent so as to divert more productive cap acity and more raw materials to de- fense industries. On that computa- tion it is figured that this new tax bill will yield an additional $74.9 million.
 DIMINISHING
 RETURNS
 You may have heard a few rumb- lings about the necessity of curtail- ing auto production by approxi- mately 50 per cent. If that program goes through, the whole tax bill es- innate is shot galley west, and the yield, instead of being $74.9 may be cnly $45 or $50 million. Bingo! There's another $25 million that has to be raised by borrowing.
 This commentary is made here not in any effort to be disparaging of the efforts of the tax boys, who have enough headaches as it is, but simply to point out another of the bedevilments which must be en- dured in times like these.
 What goes for automobiles goes for some other items on the bill. On refrigerating and conditioning machines, the tax has been raised from 5.5 to 10 per cent, to yield an additional $21 million. On washing machines is manufacturers excise tax of 10 per cent, estimated to yield $11 million. An radio sets, an increase from 5.5 to 10 per cent, es- timated to yield $9.4 million
 The Office of Price Administra- tion and Civilian Supply, however, has under consideration with these industries, programs for curtailing the production by perhaps as much as 20 per cent, just to divert their basic materials to defense. If those cuts should be made, tax revenues from those sources will be cut pro- portionately.
 MORE SHUTDOWNS
 MEAN LESS REVENUE
 A more serious aspect of the situ- ation might come from curtailments ill industry such as those referred to. Supposing shutdowns do have to come in some non-deferlse indus tries because they aren't able to get materials. That means reduction of corporation tax, reduction of profits tax, perhaps reduction of surtax and excess profits tax.
 There is, of course, one mitigating factor to all this bear talk. Defense authorizations and appropriations are now over the $50 billion mark, and unless all signs fail the nation al income might hit as high as $95 billion in 1942. In that case, the money is going to be paid to some body, somehow, and it will be spent.
 If you can't spend it on new cars, maybe you'll spend it on jewelry, furs, photographs and records or perfume and powder. They're taxed, too, and what can't be collected from one source may be collected from another.
 So the tax experts figure that while their calculations on individu- al items may be sky-whift, the total may not be far of the $3.5 billion estimate after all. They think it will be fun seeing. All this proves, if anything, is that you can't keep ahead nf the fax cnIlActnr