Evening star., 1941-11-09
Huge Increases
In Taxes Held
Inevitable
Congress Is Cautious,
But Treasury Hints
What Is to Come
By PAUL GESNER and JOHN
BECKLEY,


Mrs. Average American this week
got a glimpse of Treasury ideas on
new taxes to come.
Official Treasury quarters dropped
hints that solution to 1912 revenue
problems might be found in enact
ment of a is per cent tax on in
comes over and above normal ex-
emptions, with the levy in the case
of workers deducted weekly from
their wages or salaries, as social Sc
curity assessments are collected.
The House Ways and Means Com
mittee SHE'D gingerly away from
immediate consideration of the pro-
posal-part of a Treasury request
for immediate study of an anti
imitation tax program-but, sooner
or later, it was believed, new broader
revenue-getting laws were a fore
gone conclusion.
The whole 1912 tax program is neb-
ulous. Trial balloons are being
f1oated daily to prepare the public
for sitter demands from the tax
collector but Congress may make
haste slowly on the exact methods
of gathering in larger bags of tax
money.
Two Purposes Seen.
Purpose of higher taxes, of course,
is twofold: 1 To siphon off part
Of the rising national income and
thus prevent the bidding up of
goods which abets an inflationary
spiral of prices, and (2) to raise
money to pay for the big defense
program, which before long may
grow into a $1,000 000.0OO,000 affair
The Treasury proposal of a new
source deducted IS per cent income
tax was the biggest thunderbolt Of
the week in tax talk. If such a tax
should become law, with deductions
beginning next January l as Treas
ury officials suggested, Mr.. and Mrs.
American would find themselves
scratching together money not only
to pay l94l income taxes next
March Is, but also concurrently
turning over TO the Government
their 1912 income taxes on a pay
as-you-go basis
In Wall Street considerable doubt
was expressed that Congress would
enact Is per cent 1912 deductible
income tax. There is limit, bank
ers reminded, to which Congressman
often sense they can go in revenue
raising legislation without arousing
the ire of constituents. After all,
taxpayers are voters.
Many Wall Street ANALYSTS held
to the view some legislators might
prefer to raise additional Treasury
revenue through diversified tax pipe
lines. For instance, favor may grow
for, say, a 5 per cent pay roll tax, a
sitter upsweep in normal income
and surtax rates. larger social Sc
curity tax and heavier taxes on such
things as cigarettes, gasoline, liquor,
movies or what not.
Checkoff Favored.
On the other hand, there will be
strong pressure for deduction of a
substantial income tax from pay rolls
from the Internal Revenue men.
They contend that with income tax
rates as high as they are, the only
way they will be able to collect ex-
panding payments from unthrifty,
easygoing individuals is by deduct
ing it.
There is no doubt, however. that
no matter the form, you will con-
tribute substantially more to the
Government in 1912 than now. Some
sort of broader revenue-raising law
is certain. Also fairly sure is some
sort of deductible feature.
Warnings were given a month or
so ago that defense spending might
equal "a per cent of national income
in 1912, but most people then failed
to recognize the early hints as the
bugle call for more armament dol
lars.
Now. with the Treasury suggest
ing methods by which defense money
may be conscripted from your pocket
and mine, the tax-raising program
is becoming more realistic.
Foreign Burdens Cited.
Grim as a "a per cent contribu-
ton to defense might be. should
armament building be placed on a
pay-as-you-go basis, statisticians re-
mind that even with such loa d. Mr..
and Mrs. American would be better
of than the people in Great Brit
ain or Germany.
Armament costs take so per cent
Of England's national income, while
in Germany the take is so per cent.
The so per cent arms cost is only
half the Reich story. On top of
that, with everyday goods being ra-
toned tightly. the people don't have
many things to spend their remain
ing 40 per cent of income on, so
deposits in German banks have risen
to the highest levels in history.
And now the Reich government
is planning to block withdrawal of
a part of savings from banks to Q)
raise arms revenues, and CD curb
inflationary tendencies.