Evening star., 1941-05-01

be An offset TO the reduced Gov
ernment expenditures and help to
sustain employment and national
income"
The most important single means
of maintaining stability in the econ
omy and of preventing either gen.
eral inf1ationary or def1ationary de-
velopments, he said, in his opinion,
was taxation.
The Federal Reserve chief said
he was in accord with Secretary
Morgenthaus proposal to raise at
least two-thirds of the sums neces-
sary for defense out of taxation. The
rest, he recommended, should be
raised so far as possible by the sale
of Government securities TO the
public instead of by sale of secur-
tiles to the commercial banks. since
the latter method creates additional
bank deposits.
Earlier, Representative Dewey, Re-
publican. of Illinois proposed that
individuals be permitted to make
advance payments in anticipation of
estate taxes and that such payments
be deductible from the estate in fig
uring the final tax.
Repl eSentative Dewey, former
Assistant Treasury Secretary under
President Coolidge. contended that
the Government would derive an
advantage from the immediate re-
ceipt of money and that his proposal
also would aid thousands of small
businessmen to protect their busi-
nesSes from "the shock of sudden
tax liability"
In e statement prepared for pres
entation to the House Ways and
Means Committee, Representative
Dewey estimated that the loss to the
Treasury under the present inheri-
lance tax rate would be $4,000 900
annually, caused by reductions in the
size o. the estate through deducting
the advanced tax payments.
Would Limit Payments.
Adoption of the proposal would
mean still larger reduction in ex-
pected Federal revenue under the
Treasury's proposed plan to lower
estate exemptions to S25 900 from
the present $4,000 and increase the
tax rates. This was part of the
Treasury's program for raising So
900 ,000,0 900 additional revenue.
Representative Dewey said he
would limit the advance payments
to 100000 year and 10 a total of
81 600 900. The individual would
derive no interest from his advance
payments.
A plan embodying a similar pre-
payment idea for small income tax
payers was advanced by Represent
atiVe Sauthoff, Progressive, of Wis
conSin. He suggested that 81, So and
S. tay stamps be sold at post Offices
and accepted on March Is as tax
payments instead of cash.
Taxes on Broadcastiny
Representative Sauthoffs teSti-
mony also brought out that the staff
of the Joint Committee on Taxation
was studying possible special taxes
on radio broadcasting. He advo-
Gated such taxes, without making a
definite proposal, and Chairman
Doughton commented that the Joint
committee already was at work on
the proposition. Mr.. Sauthoff also
supported a proposal of the joint
committee staff to put the postal
rates on newspapers and magazines
on "a paying basis"
1t was disclosed also, that addi-
tional tax preference for persons
with children, as opposed to child
less couples, was being studied. The
deductible credit for children now
is $400.
Revise Profits Levy.
Lawrence A. Baker of Washington,
representing the National Associa-
ton of Life Underwriters, asked that
the present estate tax exemption
be continued at $40 1000 instead of
lowered to $4,000 as the Treasury
has proposed. Mr.. Baker said that
10000 invested would yield about
500 month, which he contended
was AL too little" for a man to
leave his family.