Evening star., 1941-01-12

national income produced" show how
the income has varied from year to year:
1888, S42 ,430, 900 900; 1884, $50 BAT 900 900;
1885, s55 ,87O 900 900; 1886, s65, ,165 900 900;
1887, s7l,172 100000; 1888, s63 3,61O, 900 900,
and 1889, 500 378 900 900.
1t is estimated by the administration
that for the calendar year 1910 (for which
official figures are not yet available) the
national income rose to around $74I000,-
900 900, and that the curve will continue
upward to show a total of 100000 ,000,-
900 to s81 ,OOO. 900 900 in l941. If the rate
of progression continues as expected,
the income in 1912 will be around s90,-
900 100000
100000, 10000 Would Foot Bill.
Already the Treasury has proflted
greatly by the sharp rise in the national
income which began in 1889 after the
precipitous drop in the recession" period
the previous year. For the fiscal year
1910. Federal tax receipts rose to around
Sc 900 900, ,o0o For the fiscal year 194l
(the current year. ending next June 30),
the estimate is about $1,000 900, ,000-a
new record, topping even the figure for
1920 when many of the old wartime
rates we're still in effect. For the fiscal
year 1942-that for which the President
is now estimating-the expected total is
SO 900 00OO 900. or SO 900 600 900 more than
for 1910, the last year before the start
of the present defense program.
The Treasury estimates that if the ma
tional income were to achieve an annual
level of 5000 100000 for several years.
the existing tax structure Gas of last De-
cember 81, with the present defense taxes
included) would produce around s11 ,200.-
100000 in annual tax liabilities, and that
under comparable circumstances an an
nual S1O0 900 900 900 of national income
often mentioned by the President as
goal within reach-would provide s13,-
400000000.
This figure, as it happens, is practically
what the President has budgeted for the
fiscal year 1941-some $500 900 900 for
defense and $1,000, 100000 for other pur-
poses-so that if we were operating on
an annual s1OO,OOO,OOO of national in
come, we could meet the entire Federal
budget for fiscal 1941, as now outlined,
out of the tax rates as they now stand.
But we are still far from the happy state
of a 100000 900 900 income, and existing
rates leave us with the prospect of q
deficit of at least $4,000 100000 for the
fiscal year 1941 and, because of increased
spending for defense, deficit of at least
S9,200000,000 for the fiscal year 1912
the twelfth successive year of the deficits
that began in 1881 and have run the
national debt, up to now, to about s45,-
900 900 900.
Early Revision Indicated.
The national debt limit, which former
ly stood at that figure, was increased by
Congress last June to $40, 900 900 900.
Clearly, it will have to be further raised
at the present session. Some time ago
Secretary Morgenthau indicated that
Congress would be asked to place it at
$50 900 900 900 or s65 900 10000
Unless compensating new receipts are
obtained, the deficits will be larger than
the indicated SIS, 900 900 for this fiscal
year and the next, for the Presidents
expense figures did not include the COM
Elementary program" which he urged
should be adopted in aid of the nations
fighting the dictators.
The whole situation, in fine, points
to the necessity of an early tax revision
to meet in part the urgent new defense
requirements of the Nation. Senator
Barkley of Kentucky, the Democratic
leader of the Senate, has said that legis-
lation will be passed taking an additional
81 .000, 100000 to $4,000, 600 900 from the
taxpayers.
There will be, OF course, the usual an
guished cries of don't tax me; tax
that fellow behind the tree; but per-
haps, the need being what 1t is, they
will come from fewer quarters than
usual and on a less piercing note. For
the country as whole showed in 1910,
when it practically rose up and demanded
new taxes. an awareness OF the emer-
gency and heartening willingness to
dig down in its pockets Immediately for
a sizable part of the defense costs.
The situation points also to the need
for widespread and drastic reform in
the whole Federal -State-local tax sys-
tenn. That is job which the Federal
Government, in the interest of the sound
economic structure which the present
foreign challenge demands, should in
itiate at the earliest practicable moment.