Evening star., 1941-04-17

dents budget estimates called TOR
expenditure OF S17,4S5,0 10000 in
1912 fiscal year, of Which s10,S11,-
10000 1Uould be for defense. In
addition 81 1000, 900 900 approprtd-
ton WdS authorized to implement
ledSe-lend program. Meanwhile,
estimate of tar revenue under er-
iSting laUS has been boosted by
billion dollars to 1922, ,000, 900,
due to income tar collections
heavier than anticipated.
By the Associated Press.
Secretary of the Treasury
Morgenthau announced today
that the administration and
both Democratic and Republican
congressional leaders had agreed
to ask So, 100000 of new taxes
to be raised in the next year.
He told reporters after comforting
with the leaders that President
Roosevelt had approved the program
and would, at an early date, discuss
the program with the American
people.
No details of how the money
would be raised were disclosed, but
the Treasury Secretary indicated
the Government would tap every
possible means of raising dollar in
taxes.
Despite former policies of the ad-
ministration, he indicated that such
drastic means as a general sales tax,
paw roll taxes and other heavy
money-raising ideas were under
consideration.
For the first time in Treasury
congressional tax conferences dur
ing this administration, Republican
leaders as well as Democratic leaders
were called in.
Unanimous Approval.
Mr.. Morgenthau said: II am happy
to say that the combined Demo-
cratic and Republican leadership of
the Senate and the House gave
unanimous approval to this pro-
gram"
1--WE reached this figure" he said
"on the basis that we ought to raise
at least twe-thirds of our expendl-
lures by taxation and one-third by
borrowing.
1--WE figure expenditures in the
coming fiscal year, beginning July l
will be about S19,000,000, 900. Two
thirds of that is S12 ,667 900 900. We
figure that existing taxes, after add
ing sl,0OO,O00,000 to previous estl-
mates on account of better business
will bring us S9,223, 100000, leaving
us S3,444 100000 short of the amount
of taxes we ought to raise"
The Secretary said he did not
know how the tax program COM
pared with previous ones, but he
felt it was safe to say that it might
be the largest in the world.
Congressional leaders at the meet
ing told reporters that Mr.. Morgen-
thau would speak for them and
gave no independent comments.
Bid Surprises Vandenberg.
Senator Vandenberg, Republican
of Michigan, however, quipped that
he was "breathless" over the fact
that he had been invited to the
meeting.
Others present were Senators
George, Democrat, of Georgia, and
Walsh, Democrat, of Massachusetts,;
Chairman Doughton of the House
Ways and Means Committee and
Representatives Cooper, Democrat,
of Tennessee; Cullen, Democrat, OF
New York; Treadway, Republican,
of Massachusetts and Crowther,
Republican, of New York.
Even after the unprecedented
new taxes are levied, Mr.. Morgen-
thau continued, the Treasury will
have to borrow about S500,000, 900
month to keep up with the huge
expenditures for defense and the
lease-lend program.
An ideal way to raise this
money" Mr.. Morgenthau said,
would be to increase everybody S
tax by one-third."
He indicated, however, that a
portion of the new taxes probably
would be raised from persons who
paid no Federal taxes this year.
Initiation Threat Factor.
While the major purpose OF the
new taxes will be to pay for eX-
penditures, Mr.. Morgenthau said
another and very important rea-
son" was to prevent rapidly rising
prices and a consequent imitation
He meant that the more money the
Government takes away from people
In the form of taxes, the less money
people will have available for com
petitive purchases which might
cause price rises.
This brought up the question
whether the administration no long
er would oppose forms of taxation
which restricted consumer pur-
chasing power, such as sales taxes
The Secretary declined to answer q
direct question on this point anc
asked that he not be pressed on the
point at this time.
OI1CldlS lllOiCdVCu ~ wac ooAC w
assume that existing forms OF taxa
ton would be increased, as well
as new forms of taxation imposed
Income Tax Jump Due.
A stiff jump in the income tax,
the basic levy of the Federal reve-
nue. system, was taken for granted
Based on past practice, this would
mean that Congress would decree
new tax rates to apply retroactively
to 1941 income of individuals and
corporations. Boosts in excise taxes
such as those on liquor, tobacco and
gasoline, would apply only to pur-
chases made after the new tax
legislation is enacted.
The administration also is known
to desire a sharp upward revision
of the excess profits tax on corpora
tions and has been discussing higher
rates for estate and gift taxes.
Mr.. Morgenthau declined spe-
.{see TAXES. Pags A-a1