Evening star., 1941-08-08
in the ordinary non.defense expen-

payers ought TO know as soon as
possible" how much taxes they will
have to pay next year.
Joint Returns Discussed.
Discussing joint income tax re-
turns, Mr.. Morgenthau said,
families pay lower Federal income
taxes when both husband and wife
receive income than when the same
total amount of income is received
by only one of them. This Is a
discrimination of which many
wealthy people have taken advantage
by large gifts of income-producing
property between husband and wife.
Furthermore, in at least eigth
States of the Union, Federal income
taxes are made substantially lower
than in the remaining States because
the local law permits the splitting
of income (under community prop
erty laws) between husbands and
wives.
Here are determinations against
the rest of the Taxpayers which, I
believe your committee will agree,
must be eliminated if We are to
extend the income tax downward to
include millions of persons with low
incomes
Fostering" Taxpayer Deplored.
Describing the complicated process
of making out an income tax return
-favorite jibe of cartoonists every
March - the Secretary painted a
word picture of a small taxpayer
working over the sheets.
when he started to fill out his
return" the Secretary said, "he may
have been full of patriotic enthusi-
asm to pay his share toward the
defense program. but by the time
he has finished his last computation
his cheerfulneSS may we'll nave col
lapsed under the strain.
Furthermore, the checking OF
these tax computations by the ad-
ministrative authorities takes time.
Frequent errors are found which
must be rectified, requiring corre-
spondence and further annoyance OF
the taxpayer as well as expense to
the Government.
I'VE IN the Treasury do not enjoy
pestering the taxpayer any more
than he enjoys being pestered by
U.S."
Sees Offset to Price Rises.
Mr.. Moreenthau added that Con-
eress should not abstain from heavy
taxes with any idea of leaving fam
lilies more income to spend. He
cited statistics indicating that the
rise in prices of things people buy In
the last year already had reduced
the purchasing power of their in
come as much as the proposed tax
bill would take money away from
them directly.
On the other hand, he explained
the more money that is raised
through taxes the less the defense
program will have a tendency tc
cause prices to rise. ut Is cleaI
that rising prices tax the family
income just as surely as do income
taxes" he said, adding:
"If, in an attempt to protect the
incomes OF our people, We hold dowr
taxes and as a result the cost oi
living rises, we shall have taxed
them just as surely as If we hac
levied on them directly-and ",
still have the inflated costs Of de.
Tense to pay later from taxes"
Presidents Support Claimed.
Under questioning by Senator
'Barkley, Democrat, of Kentucky
Mr.. Morgenthau said that tn,
Treasury's recommendation for joint
tax returns was not in conflict with
the Presidents request for modifi.
cation of the joint return require.
ment originally approved by tht
Ways. and Means Committee. bur
rejected by the House.
The Secretary said the President
had backed up the Treasury ir
its proposal that substantial relief
should be granted for husbands anc
wives earning separate incomes Il
joint returns were required.
Frankly" remarked Senator
Barkley, II have not been very
enthusiastic about joint returns.
He added that long efforts had been
made Ito free women from control
of their property by their husbands.
He said the Joint return system
would tend to break down that
independence"
But unfortunately" Mr.. Morgen.
thau replied, "a great many wealthy
people have taken advantage of tht
separate returns to transfer income
to the women and thus avoid taxes.
Huge Transfers Cited.
A comprehensive joint return re.
quirement, Mr. Morgenthau esti.
mated, would raise approximately
s258, 900, 900 of additional revenue il
| special credits were provided fol-
husbands and wives earned income
Mr.. Morgenthau said that since
1882 about $7,500,0O0,O0O of property
has been transferred from one spouse
to another.
He estimated national income
would total between $88 900 900, ,0OC
and 100000, 1000, 900 this year, COM
pared with $4,000, ,00O, 900 last year
Senator Barkley suggested addi-
tional taxes should fall most heavily
on those who obtained the increased
national income.
Mr.. Morgenthau, in response to
questions, expressed doubt that the
increased income has had time to
get down into the lower tax
hra