The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1941-08-28
FINANCING A WAR

"a turning 10 excess profits taxes
after voting to dip down TO the
S750-a-year income level for single
persons and 10 the $500 level for
married couples for new revenue.
The committee vote. 10 to 9, to
broaden the federal income tax
base as recommended by the Treas
ury. will bring in tax returns next
year from 23,o0oO0o persons-about
100000 more than at present
- and will increase federal revenue
an estimated s30S,0OO.o0O annually
above the estimated yield OF the
House-approyed tax bill.
The new sS0S,OO0.000 will be in
addition TO the already-increased
lsyies on individual citizens. Only
$4,000 900 of the s303000,000 in
new revenue will come from per-
sons who do not now pay federal
income taxes.
One other change affecting the
bills yield made by the Senate
Committee instructs the Treasury
10 draft an amendment designed TO
eliminate the tax advantage exist
ing in eight community property
states. Such an amendment would
bring into the Federal Treasury an
additional S51 100000 annually.
These two changes-the low
cred personal income tax eXemp-
tons and elimination OF the com
munity property tax advantage
would raise the total OF the House
tax bill to 1880, 700, 0Q9 Secretary
Of the Treasury Henry Morgenthau,
Jr. originally asked for more than
$500. 900 600 in new revenue.
TIE tax base In existing law and
under the bill as passed by the
House reaches down TO single per-
sons earning more than $500 year
and married couples with an in
come Of over $4,000. Reduction OF
the exemptions TO $3.50 and $500,
respectively, will have these effects:
Bachelors earning more than
s14.42 a week will have TO pay
taxes; married men will be subject
10 federal levies IL they earn more
than $2s.s4 week.
The extra burden will fall heav-
lily on married men. For bachelors
now paying taxes the reduction
means an automatic increase OF al
least IS; for married men at least
$50, and in the higher brackets as
much as 1915.
The committee also arranged TO-
additional income by merging the
10 per cent defense tax into the
permanent rate schedules. Under
present law an individual pays a
four per cent normal tax. and II his
taxable income Is above $4,000, sur
taxes beginning at four per cent OF
the excess, then he adds 10 per cent
10 the total for defense
Under the House bill the surta1es
begin at five per cent on the first
dollar Of taxable income. To absorb
the defense tax. the Senate Com
mittee voted TO retain the normal
tax at four per cent, but increase
the surtax TO six per cent on the
first dollar OF taxable income "a
compensate for the elimination oil
the final 10 per cent.
The two-step computation Of tax
es in the Senate bill compared with
the three-step process in the House
bill, involves slight differences in
the amount an individual taxpayer
would pay. but not in the total yield
10 the Treasury.
In addition 10 these changes the
Senate Committee has ruled on
consideration in the pending bill o.
proposals for a manufacturers eI
else or sales tax, Withholding Of
payroll tax, and any requirement
for mandatory joint returns.
The House tax rate on corpora
lions is 10 be retained al "a pc
cent, and present House rates ant
exemptions will prevail on estate
and gifts
There may be other changes il
the present income tax law. but Il
general the opinion OF the commit
Zee represents about what the fina
result will be. Il means more Ia
payers and higher taxes for thos
who are still in the paying bracket
OF past years. And this is only III
beginning II we get into the war W
may expect rapid increases. II vi
escape actual fighting we shall stil
have an enormous debt 10 pay. an
taxation seems to be the only meth
cd of raising the money. Payment I
duty that cannot be avoided UT
less We follow the German cours
Of cancellation by currency infls
ton. Some people argue that .thi
quick way out Is the best, but sue
arguments are not at all in keepin
-Uith- American ideaS-af-e coanmi
security Certainly they won't hel
in the. sale Of preparedness bonds
We have job now Of rsisin
huge amounts OF money. Regardless
OF what the future may bring. "
must look TO the present and swim
intellectually into the parade 70
unity and strength 10 preserve a
much as we can OF our progress
toward civilization.
Not only should we not slip bacl
but In the process Of mai
tanning our present status "
should recognize the fundamenfs
principles OF thrift and enterpris
upon which American prosperity
founded. and strengthen those foul
dations. We must also realize tina
our natural fortresses Of water o
either side have been vastly veal
ened by modern science. that n
world Is coming closer and close
20 a unit rather than a miscellai
eous assembly Of nations and th'
IL must be controlled as such wit
more generous consideration for III
.