The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1941-09-18
Economic .
eM@hA5hA
National and International Problems
Inseparable from Local Welfare

Inc senate has approved and re-
turned to the House, for possible
amendment, the toughest tax bill in
American history. If it passes in it's
present form-and the odds are much
against any major changes - the
American people, next year, will real
ly learn at first hand just how in
credibly costly modern war is.
The bill is designed to raise $685.
,O00-$367, 100000 more than the
bill originally approved by the House.
And it plans to raise it partly by
reaching down into income levels
which have never been subjected to
direct Federal taxation before.
Most important change in the Sen
ate bill over the House bill was the
provision dropping income tax ex-
emptions to $1,000 for married per-
sons (previous exemption was $4,000,
and to $3.50 for single persons (previ-
Gus exemption was $500. This change
alone, according to Treasury experts,
is expected to yield an additional
$303,O0O,O00 annually. 1t is change
which has long been advocated by
economists, who believe that the bur-
den of government cost is now so
great that the middle and higher in
come brackets can no longer pay it.
Thus, they reason, the only solution
is to make the lower brackets feel
the bite of taxation too.
This change was suggested by
President Roosevelt when the tax
bill was still before the House. The
House revenue committee refused to
adopt it. 1t is, therefore, likely that
"a strong effort will be made in the
House now to up the exemption level.
The normal rate of income taxation
-four per CENTS retained. How
ever, surtaxes will be imposed in far
lower brackets than ever before. The
surtaX rates are very high, ranging
from 10 per cent (Which must be add
led to the normal four per cent? in
the lowest brackets touched, and
ranging up to 81 per cent in the top
brackets.
The existing normal corporation
taxes will be retained and, in addi-
ton, surtaXes of six per cent on the
first $4,000 of net income and seven
per cent on income above that
amount, will be levied. Further, ex-
cess corporation profits will be hit
hard First $4,000 of excess profits
will be taxed 35 per cent, as against
the present rate of rs per cent. The
rate will go up until it reaches 60
per cent on excess profits over $780,
600. Present rate at that level is so
per cent.
Lastly, the bill levies a number Of
Iso-called nuisance" taxes = taxes
which fall into Tie sales and excise
classifcations There will be a seven
per cent excise tax on automobile
manufacturers, plus a $5 annual use
tax on all automobiles provision
which amounts to Federal car
license fee. Wine taxes will be al
most doubled and hard liquor taxes
will be upped from $3 to $4 a gallon.
Ten per cent taxes will be levied ON
local phone bills, theater tickets,
radios and other musical instruments,
sporting goods, household equipment,
Photographic apparatus, etc, etc.
Heavy as this tax bill is, few be-
lieve that it will prove adequate Soon
our arms spending alone will reach
$3,000,0 100000 a month-nearly as
much as the new bill is designed TO
raise in an entire year. Total arms
and aid-to o-democracies spending will
probably reach and perhaps surpass
$3.50, 0,O00,000,0OO, depending on how
long the war lasts. Many an authority
is convinced that this bill is only a
| taste of what is to come-and that
next year or the year following, the
| Congress may have to pass another
tax bill which will make this one
seem mild by comparison.
! X X X
When the news broke that the Fed
eral Reserve Board was preparing
regulations to control installment
credit, buyers rushed in to buy cars,
refrigerators and similar goods before
the deadline, in fear that the new
rules would make installment pur-
chasing next to impossible. Now,
however, the rules have been issued,
and it appears that this fear was gen
orally unjustifed. All they do is to
prevent the issuance of excessive
credit, and to make illegal certain
credit practices which industry and
financial authorities alike have long
considered unsound and potentially
dangerous.
You'll have to pay a third down
when you buy your new car (the
trade-in of your present car may be
used for ali or part Of that third, as
in the pasD and maximum period of
payment is Is months. If you want a
new refrigerator, ironer, stove, cleo
trio dishwasher, washing machine,
room-unit air conditioner, radio set
or musical instrument you must pay
20 per cent down and the balance in
Is months. For furnaces, furniture,
water heaters and pumps and other
home items, only Is per cent need be
paid down, and 1S months credit
period is allowed. On materials for
house improvement or alteration,
-