Evening star., 1941-05-03
322-Bi||ion Goal
Tax Minimum,
Says
Letter Leaves Specific
Form of New Leyies
Up to Congress
z, the Associated Press.

earnest for additional revenue after
hearing from President Roosevelt
that "a minimum" Of SO SOC, 900 900
in extra taxes would be needed TO
pay part of the extraordinary de-
fense costs.
The goal. announced by the Pres
ident last night in letter to Chair
man Doughton of the House Ways
and Means Committee, was the same
as recommended previously by
Treasury Secretary Morgenthau.
However, the stress which Mr..
Roosevelt laid on the duty Of every
American to contribute to the Ma
tons defense in accordance with
his talents and trea sure" emphasized
the administration determination
not to lower its sights in seeking
additional funds.
Minimum Requirements.
In letter made public at Char
lottesville, Va, where he is visiting
at the home of his military aide,
Maj. Gen Edwin NJ. Watson, the
President told Mr.. Doughton:
MY Dear Mr.. Chairman:
Secretary Morgenthau has rec
commended that three and one-half
billions of additional taxes should be
levied during the coming year to
defrav in part the extraordinary
defense expenditures.
This total represents the mini
mum of our revenue requirements.
I hope that you and the other mem
bers of your committee will act
favorably on this goal.
You will recall that in my budget
message this year, I suggested a
financial policy aimed at collecting
progressive taxes out of higher
level of national income I urged
that additional tax measures should
be based on the principle Of ability
to pay. This still is my view.
II am confident that your COM
mittee will recommend legislation
specifically aimed at making the
Federal revenue system evasion
proof and so devised that every in
dividual and every corporation will
bear its fair share of the tax burden.
Every American Must Contribute"
The income tax cannot fix the
tax liability of individuals and corr
porations with equity as long as the
tax basis is defined to exclude sub
stantial and significant elements of
income.
Il hope your committee. with the
help of the Treasury. will formulate
a tax bill which will convince the
country that national defense pro-
gram intended to protect our dem.
ocracy is not going to make the rich
richer and the poor poorer.
It am sure that you and I are
agreed that defense is a national
task to which every American must
contribute in accordance with his
talents and treasure and that the
people of the United States are
gladly willing to make whatever
sacrifices may be necessary to
strengthen the common defense
Very sincerity yours,
FRANKLIN D. ROOSEVELT"
Some tax experts here thought
the President might have reference
to tax exemptions on public securi-
ties. Others observed that the sem
tence might point toward possible
lowering of income tax exemptions.
Stephen Early, presidential secre-
tary. who handed the letter 10 re-
porters Oh the Watson lawn, de-
clared I'm not going to make any
interpretations"
Flexible Tax Plan Opposed.
Meanwhile, in the House Ways
and Means Committee, where the
new tax legislation will originate.
sentiment appeared developing
against adoption of mtried eco
nomic devices such as the flexible
income tax system advocated by a
group of ITO economists.
The flexible tax system. under
which the rate would f1uctuate with
living costs, was advanced chiefly
as a means of offsetting the infla-
tionary effects of the Nations
multi -bilIon-dollar defense spend
ing program.
Committee members said private
ly. however, they did not believe the
imitation danger was sufficiently i'm
minent to warrant the Government
embarking on any experimental
economic policies such as the flex-
ible tax system or compulsory di-
version of savings into Government
securities.
Several members indicated they
favored sticking to the fundamen-
tails of proposals made by the
Treasury and the staff of the Joint
Congressional Taxation Committee,
including higher surtaxes on indi-
vidual incomes and imposition Of
more and higher excise taxes.
Complaints Received.
There were indications, too, that
the legislators were thinking OF ways
to make the new taxes less burden
some on persons in the lower and
middle income brackets. One mem
ber suggested that this would be
possible to some extent because OF a
prospective increase in the national
income as a result of defense spend
ing.
Committee members reported re-
ceiving complaints from various
groups who would be affected by
proposed increases in excise taxes
among them soft drink manufac-
turers, cigar makers and brewers.
One member said a soft drink
maker told him many firms in that
line would be forced out of busi-
ness by the Treasury's proposal for
a tax of l cent per bottle, unless
competitive products such as ice
cream and chewing gum were taxed
a similar amount.
"All these people take the atti-
tude," the legislator said, that they
have no objection to paying in
creased taxes to finance the defense
program, but they don't want the
taxes imposed in O manner that
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