Detroit evening times. (Detroit, Mich) 1921-1958, 1941-04-24
80 Per Cent
Boost in Tax
Goes Higher
Suggest Some Increases
Up TO 100 Per Cent
By PAUL MALLON

" HoiiA4'NI O4'' nPi"
w Barred doors could not con-
ceal the shock of House ways
and means committee members
at the secretly submitted new
treasury tax program.
Chairman Doughton actually
stamped up and down the floor
talking to himself while the
Morgenthau aides were telling
Congress what rates to impose
on whom. Other members of
the committee were similarly
upset and worried.
Only a few days before, they
(including Republicans had all
promised TO restrain their per-
Sonal viewpoints for amicable
cooperation to raise $500, 000,-
600 more by a general one-thlrd
increase in taxes.
What floored them was the
failure of Mr.. Morgenthau's New
Dealers to stick TO the general
figure. The one-third increase
turned out to be a sevenfold in
crease in one instance at least.
"a committeeman worked out
one rate, claiming it would in
crease certain income taxpayers
from Sl1 to STU
One hundred per cent in
creases in excise taxes were fire.
quent, including the tax on au-
tomobiles. A GO per cent increase
on gasoline was suggested.
THERE was even some Sug-
L gestion of more reforming.
A breakdown on banks and in
Surance companies to make
them pay taxes on their tax eX-
empt bonds, seemed to be Of
fered in a complicated way that
all committeeman could not
fully understand at first hearing,
Mr.. Doughton's official excuse
for barring the doors was that
he did not want to stir up and
brighten the taxpayers because
-tAe-tFeasary- program only
tentative
Fact is Doughton had in his
sleeve another plan devised by
the non-partiSan experts of the
Joint congressional committee
on taxation. These experts have
been working with Mr.. Morgen-
thau'S New Dealers, apparently
seeking an agreement on a pro-
gram both could support. When
agreement was found impoS-
Sibld. the alternatives had to be
presented 10 the committee.
But the Democrats under Mr..
d ughton s wise leadership
voted 10 keep the doors closed
apparently in hopes the treasury
New Dealers would see their
mistakes and revise their plan
before presenting 1t in public.
L'fRSf SeT1OuS offender against
Leon Henderson's new edict
barring further increase IN
prices is the treasury depart
ment. Mr.. Morgenthau's pro-
posed hikes up to 1890 per cent
IN excise taxes will increase the
cost of gasoline, cigaretS, liquor,
automobiles and many other
daily consumed products. But
Mr.. Moegenthau is not likely to
be indicted by the defense com
mission or even receive a letter
from Mr.. Henderson. The New
Deal economists explain II this
way:
The increased taxes are on
what the government calls lux
ury goods. The government it.
self IS, therefore. only the worst
price increasing offender, in
lines upon which the economists
want to hold down consumption
in war-defense times.
The moderate one-third in
crease in corporation taxes
should not increase prices Cthis
is still the New Deal economists
talkingD because the corpora
tons will merely pay the in
crease out of net earnings. as
they are paying the recent union
wage increases. 1t is officially
doubted that profits of corpora
tons will be decreased by the
tax increase because of eX-
panded operations.
THESE taxes are not the end.
Il The treasury economists de-
VlSed them as expedients for the
interim period until the country
reaches full production and en-
ployment. At that time. they
say, it will become economically
necessary to levy taxes at the
source of income or impose a
system of forced savings.
This will be done not only to
finance the war but to keep the
increased national income out Of
the buying market in which il
would compete with government
defense buying.
The talk runs toward figures
OF 10 to 20 per cent as a tax on
pay rolls or a pay roll seizure in
forced savings. 1t will probably
be necessary next Winter if the
world situation runs along as at
present.
Under no conditions will a
sales tax be countenanced. The
only word Mr.. Roosevelt passed
10 the congressional tax makers
was that he did not want the
IL l..