The Omaha guide., 1941-08-16
ECONOMIC HEIGHTS
National and International Problems
Inseparable from Local Welfare

IN ~ P1OOO11C CoA POl
icy has two distinct phases. First and
most obvious phase is the necessity of
raising more revenue. Second phase
is to reduce consumer purchasing pow
er. as one means of fighting initiation.
War ~priorities will result in a cOnsid-
cradle reduction in the amount of
goods available for consumers. War
spending, on the other hand, will re-
suit in a great increase in payrollls
and income. That situation, unless
corrected, must almost inevitably re-
suit in price initiation. And one e
of correcting it is heavy taxation.
Few authorities oppose these
purposes. But a good many authorit-
les are extremely dubious Of the wis
dom and justice of the new tax bill as
tentatively approved by the House Of
Representatives committee. Their op-
osition is based on varied grounds.
The new tax bill places it's heav-
lest burdens on the middle income
groups present rates of taxation on
big income groups make it impossible
to substantially increase revenue from
them. Persons and families earning
from $4,000 to $4,000 per year will be
forced to pay the bulk of the increas-
es in taxes. Writing in the New York
Times, Godfrey n. Nelson says that,
if the proposed bill passes in its cur
rent form, less than 4 percent of the
population will have to make returns,
and nearly one half of these will not
be required to pay a tax because of
their exemption credits. In other
words, the tax does not reach down in
to the smaller bracket incomes. Mr..
Nelson, like other economists, suggests
that it is advisable to reach these low
er incomes either by reducing AMOUNTS
OF exemptions, Or by levying a flat tax
payable at the source, on all incomes.
1T seems reasonable to assume" he
says, "that if the national debt is ever
to be paid, all earnings should be made
to contribute to the liquidation"
Furthermore, it is clear that the
middle-income groups which are COM
posed largely of salaried people will
share the least in war spending. Wag-
es for workers are going up far faster
than salaries for white collar help.
On these grounds alone, the new bill
seems definitely in%equitable.
Some are convinced that the bur-
den the new bill will place on industry
is dangerously high. No one wants
"war profiteering." But it is clearly
necessary for industry to earn suffic-
lent profits for expansion and to at
tract new capital, if it is to continue
as a healthy, progressive factor in our
national life. For this reason the
soundness of the excess profits tax
provisions Of the bill is gravely doubt
ed In many quarters.
Still another provision Of the bill
is now coming in for severe criticism.
That is the provision which would
force husbands and wives to lump their
income in n return, even though
each earned separate incomes which
were in no way connected. Govern
ment experts estimate that provision
would provide some $34O, 900, 900 of adj
ditional revenue. Commenting on this
FL. Lipman, outstanding Western
banker, said: "Such an important am
cunt as $4,000, 900 must not be sup
critically dealt with, but one would
scarcely argue that the size of the am
omit determines tho i11ctico ~. nronr;