The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1941-10-16
Economic . . .
eM9hA9hA
National and International Problems
Inseparable from Local Welfare

Next March l, a good many Ameri-
cans will have a rude awakening.
They will learn, for the first time
that war and defense are an incredi-
bly, costly business. For, on that date
the highest income taxes ever levied
i'm this country will be due and paya-
BILE. Everyone knows that the new tax
bill is severe-but it is probable that
relatively few know just how much
of their income it will take.
A comparison of the old tax bill
with the new tells the story. Under
the old law, single person with
$4,000 net income paid the Federal
government $S4 in direct taxes
under the new law he must pay $197
Under the old law married person
with no dependents and a $4,000 in
come, paid $528-under the new law
he must pay $1,305. And the new tax
bill reaches down into income levels
which were never touched before. Fol
instance, under the old law married
person earning $4,000 a year was not
taxed at all. Under the new law, he
must pay $37.
In the upper income brackets, very
substantial increases have also gone
into effect. A married man, for ex-
'ample, without dependents and earn
ing $4,000 year, paid $3,S43 under
the old law. Next year he must pay
|$6, ,S64-an increase of more than sc
per cent.
In the highest income brackets, the
increases are proportionately much
less-and for sound reason. That
treason is that people with incomes of
great size have long been taxed to
the very hilt. An example: Under the
Iold law, married person with an in
come Of $1,0O0,000 a year had to pay
THE Federal Treasury close to three
quarters of it-$717000. Under the
new law, he will pay something over
'$732, 600.
The heaviest burden of the new law
however, falls on corporations, rather
than on individuals The regular cor,
poration income tax rates have beer
Iupped, and, in addition, very large in
Icreases in corporation excess profits
taxes have been enacted. A corpora
ton with a net income Of $25,000 a
year or more must pay a regular tax
of "a per cent. On excess profits OF
I$50,O00 it must pay as per cent in
addition, where the old rate was 35
per cent. When excess profits pass
$4,000 it must pay 60 per cent
Furthermore, the new law contains a
provision which makes the burden on
corporations considerably higher than
the percentage figures indicate. To
Iquote the U. S. News, "Under the old
law, the normal taxes came out first
and the excess profits taxes were
levied on what was left. The new law
provides that the Excess profits taxes
come out first, and the normal taxes
Iapply to what is left. Since the ex-
cess profits rates are much higher
than the normal rates, the corpora
ton fares much worse by the
change
Heavy as this tax bill is, the
Treasury estimates that it will mean
an increase in Federal revenue of only
I$3 $50, 100000 year. So far, we have
appropriated about 100000, 100000 for
military purposes-of which $50,000,-
600 COO is for our own defense, and
! I$10,0 ,000,0 900 is for aid to Britain
In short, the revenue produced by the
record breaking new taxes will be
only a drop in the bucket in relation
to the cost of our arms policy pro,
gram. The general opinion is that 6
| far tougher tax bill will have to be
lenacted before very long--possibll
next year. Current English income
taxes, which are three or four times
as heavy as ours, indicate what hap,
pens when a nation goes to war il
the mechanical modern manner.
The individual will not have met
his share of new taxes when he signs
his check for his income tax anC
sends it in to the Collector of In.
ternal Revenue. In addition, the new
bill levies a large number of com
modify taxes. Liquor, automobiles
household machinery, amusement en-
terprseS, etc, are to be substantially
taxed. And the consumer, of course
will have to pay.
As this column has pointed out be
fore, there are two facets to heavy
taxation. One-the obvious one--is
1 lA Il,
other is to reduce the public's pur
chasing power and so help prevent
or slow price imitation. But some be
lieve that the new tax bill does not
80 far enough so far as the last goa
is concerned. They believe that {
System of compulsory savings vii
have to be put INTO effect during thi:
period of rising incomes and declining
supply Of commodities. Whatever