Evening star., 1941-12-30

What will happen is that a new
set of taxpayers will emerge and
that a relatively small number of
businesses will pay the bulk Of the
taxes. There was a time when it
was commonly expressed that 20 per
cent of the corporations did so per
cent of the business of the country.
1t is believed that in wartime, 20
per cent of the corporations will do
close to 80 per cent of all the volume
OF business done.
This means that the tax collector
for the Federal Government will
find taxes in a small number of
business places and that the high
tax rates will bring back to the
Treasury 60 to 70 per cent, if not
more, of the money spent on de-
fense.
The fortunate few who are doing
war defense business will spend
money for tools and facilities and
services and thus spread their pur-
chasing power widely and this may
more than counterbalance the
losses in consumer goods and in the
purchasing power of the individuals
engaged in those consumer lines
that are curtailed.
Phenomenal Tax Increase.
Certain commodities in which
there are no shortages will find the
impetus of the increased buying
power. Tax collections as a whole
will increase by phenomenal
amounts. Thus it used to be con-
sidered very remarkable when
S6000,000O00 was taken into the
Treasury in taxes of all kinds. TEis
Wos when the New Deal was SDend-
irG at the rate of 100000 900 a
year.
Today the picture is very different.
The fiscal year which ended last
July showed tax receipts OF So
200 100000 and expenditures of S12,-
000,000,000 In the fiscal year of |
1912, which ends on June 80 next,
the tax collections will run about |
S12 800, 900, 900 and the expenditures
are expected to top S26,50O OO0,O 900.
One year later-June 30, 1943-
the Treasury hopes to have collected |
as much as 16,0OOOOO,OOO in taxes
in the preceding IL months and to
have spent s45,OOO,oOO, in that
same year. This is a rate of spend
Ing never before equaled, and some
thing unheard of in spending speed
will have to be accomplished. This
month the spending is at the rate of
$1,000, 100000. To attain IS billion
dollar rate for the coming year the
monthly expenditures will have to
be stepped up to about s3,7OOOOO 900,
which is just about double what it is
today.
The profits will disappear and so
will the tax expectations of the
Treasury from many businesses and
from many individual sources. But
this will be more than Offset by
other individuals and by other busi-
nesses. When the $16,0O0,OOO, 900 tax
bill Is collected, at least $4,000 0OO,-
600 will come from income and ex-
cess profits taxes, about $4,000 900, 900
from excise and miscellaneous taxes
and about s2,OOO,OOO,OOO from unem-
ployment pay roll taxes and customs
duties.
To Bring Bracket Shifts.
The Treasury is planning a new
set OF rates so as to extract out of
incomes earned in the calendar wear
1912 more and more money. Some
time in the first quarter of 1912 these
tax rates will be definitely estab-
liShed so business and individuals
can plan accordingly. The number
of taxpayers will increase. There
will be many who will move up from
the lowest group of brackets to
middle-income brackets and there
will be some who will move into the
very high brackets who have never
been there before. So far as the
Treasury is concerned, it will not
matter who has fallen by the way