Evening star., 1941-04-23

gency is over, it will simply mean
that the day of reckoning will bring
an economic depression in the
United States far more perilouS than
that OF 1929-1933.
It seems almost incredible that,
with Congress in session, plans are
actually being made to spend an
other S450,0G0,00 on farm subsidy
payments, which the Senate has
voted. This is boost of S238000 900
over last year and certainly the
farmers didn't suffer in 1910. Also
the administration is getting ready
to lift up farm prices through COM
modify loans. The guarantee here
tofore has been So per cent OF parity
and now the plan of the House Is
to move this up to rs per cent and
the Senate is trying to move 1t still
higher to 85 or 100 per cent. This
will, in the end, cost the taxpayers
hundreds of millions of dollars more
through the increased prices of
food.
Though the administration IS
talking about freezing the prices of
industrial products, it is for some
strange reason allowing the prices
of food products to rise and IS &C
tually furnishing the subsidy money
bo bring about such result.
Then there's the 81 900 100000 still
being spent for relief at time when
employment is at the highest level
f. our history. While the whole sum
doubtless could not be eliminated,
It is significant that there is no
talk of any material reduction.
Defense as an Excuse.
Apart from the moneys already
being spent, the administration is
talking in eXtravagant terms about
five T. V. AS, which means the st.
Lawrence waterway and electric
power development and similar prof.
ects in other parts of the country.
Scarcely a week passes that there
isn't some added impetus given by
the administration to projects being
planned on a big scale which have
relatively little to do with defense
but which are being dragged into the
picture with defense as an excuse.
Little has been done to cut down
the non-defense expenses of the
Government. The pay rolls for en-
ployeS for extra work here are being
increased without a thought being
given to whether clerks and officials
IN non-defense bureaus and depart
ments could be drafted to do the
same work.
The American people have up to
now been indifferent to the waste
and extravaganza of the New Deal
spending program. But with the
coming taxation schedules, things
may be different. The penetration
of the new tax rates is pretty deep.
1t will not merely affect those with
incomes above $4,000 a year but it
will begin to take a heavier levy
than ever before from those with
incomes below $1,000 year.
Biggest Tax to Date.
The forthcoming boost in excess
profits and corporation taxes will
mean in some instances that even
small business will pay SO to 60 per
cent of their net incomes, especially
those without long earnings record
or high capital structure. AS for
individuals, the tax rates are mount
ing and it is planned to start the
surtax at II per cent on the first
$4,000 of taxable income and the
normal tax of per cent would be
added to this so that Is per cent
tax would have to be paid on that
$4,000. But on all income above
$4,000 the rates would jump pro-
gressively till IA per cent surtax and
per cent normal would be paid on
higher incomes.
Up to now these high rates have
applied only to persons above
$4,000, but now not only have sur
tax rates been boosted for incomes
above $50,000 but those with in
comes below that figure will pay
If the Treasury plan is approved
the biggest tax they have ever
known. In many instances this Is
but the beginning, because the State
taxes are likely to be raised, too.
The only consolation in the pic
lure is the possibility that the war
emergency may be over in two or
three years. What is more discon-
certing, however, than the high tax
rates is the tendency of the New
Deal to keep on spending on nom
defense projects as heretofore,
which leads to the suspicion that
once the New Deal collects $l2 2000,-
100000 or more a year from taxes,
the temptation will be to keep on.
This may seem an unjustifled sur
mise but until there is some evi-
dence of economy in New Deal quar-
ters, the belief will grow rather
than diminish.