Evening star., 1942-03-15
By FRANK MacMILLEN,
Wide World Business Writer.

Wlde WorlQ BUSINESS writer.
NEW YORK, March 14.-For the
first time in the history of the
United States, the national taxation
policy is being deliberately calcu-
lated to cut the living standards of
the people.
In the next year or two, some ana
lysts say it may be reduced below
the depression level of 1882.
Financial men are emphatic in
their opinion that in this time of
emergency, it is important for every
American to understand how the
war is being financed and why these
methods have been adopted
. Here is a quick overall picture of
the main factors in the war flnanc-
ing problem in the Governments
next fiscal year which begins July l:
l. The entire income of the coun-
try is expected to run to about $11O.-
100000 000-Some experts set the
figure a few billions higher.
2. The Treasury's taxation pro-
gram calls for raising about $27,-
600 100000 including social security
leVieS. The current fiscal years
total is expected to be about S16,-
600. .0000,0 ,000D A bit more than half
of this will come from individuals,
forty to As per cent from corpora
-tionS, authorities here think. These
are Treasury plans, and will prob
ably be modified downward, it is
thought here in whatever law Con-
gress passes.
8. The Presidents budget message
called for total expenditures of S59,-
000,000,OOO, all but about s6,O0O,0O0,-
900 for war.
4. The Government must borrow,
therefore, about ,00O,0OO,0O0 in
the course of the coming year-the
difference between tax income and
total outlay.
Framework is Clear.
These figures, highly simplifed,
still show the framework within
which the war finance problem will
have to be worked out.
How the huge taxation burden
ought to be divided as between cor
porations and individuals, and as
between the various income groups
of the country promises to provide
one of the hottest tussles of the
war period to date, as Congress
struggles to whip the Treasury pro-
posals into law.
So firm conclusions on these
points are impossible now, experts
here think, although they believe
they see certain obvious lines of
policy open.
They do not believe corporation |
income has been exhausted as
source of taxation, but they do |
think the point of diminishing re-
turns is near. especially if the war
has long to run.
AS straw in the wind, they |
pointed to the report of the Federal |
Reserve Board showing the profits
of 629 leading industrial corpora
tions in 1941 were s2.151, 100000,
compared with s1818000,000. Both |
figures we're after payment of all |
taxes, State and local. but before |
any payment of dividends to share
holders.
Actual Total Much Larger.
1t was generally. conceded that If
all corporations could be included |
the total would run to several times
this limited sampling. perhaps to
$4,000, 100000 or s9,0O0000,00O; but
tbs would include a great many |
small companies with little or no
connection with war work and so
not prepared to pay drastically
higher imposts.
If the primary dependence for
more taxes is to be on industrial
corporations, however, these observ-
ers said, then the obvious relation
ship of their profits to the S59,0O0,-
100000 clip Of next years Federal
expenditure cast doubt on how
much farther higher rates would go |
In producing large new revenue.
So these analysts naturally have
turned to the other great sources of |
the national income-wages, sala-
ries and the take of farmers-which |
altogether in a normal year run
about three -fourths or more Of the
total
They believe that here, because
of the sheer bulk of the total and !
despite the smaller individual ability |
TO pay, the Government must seek
a major share Of such war cost as Is
not borrowed They even count on |
this part of the population to do a
fat slice of the lending.
Tax and borrowing policies must
move in this direction, they contend, |
because the money is there, and be-
cause modern wartime conditions
demand that purchasing power that |
(See TAXES, Page C-9D