Evening star., 1942-11-25

analysis, If q s*$ssas$S1
$67 900 ceiling David Lawrence.
on salaries, for instance, were placed
In England, the British business
executive would have far more left
after paying taxes than anybody in
the United States would have.
Thus. life insurance premiums are
allowed as full-rate tax deduction
from gross income before taxes for
all persons who earn more than
$1,000 q year. The total allowance
cannot exceed one-sixth of the
policyholders total income from all
sources. Under the recent executive
order limiting incomes to $25 900, no
deductions Of any kind are allowed
on $67 900 salary so as to bring the
hnal amount remaining 20 $25, 1000.
Insurance premiums are not al
lowed as deduction in the United
States against gross income-not
even term insurance which carries
no cash or borrowing value and is
taken out solely for protection, in
many instances, by persons who
have no estate but wish to protect
their families against their sudden
death.
Taxes Deductible.
Also In Britain all foreign income
taxes and local taxes are deductible.
50 that when a man earns $4,000,
for instance, he can reduce that
sum considerably by the allowable
deductions. In America no deduc-
tions from gross income for State
taxes are allowed in complying with
the recent executive order limiting
net salaries to s25,000 a year.
1t Is true that insurance premi-
ums are being given some credit
as an Offset in the United States
against the victory tax, which starts
In 1943, but, in figuring the s25, 900
ceiling, no credit Is given for any
insurance deductions as against the
total gross income.
In America, because of the taxes
Of the several States, the taxpayer
who had had his salary limited to
. gross OF $4,000 by the recent exc
cutive order doesn't have $4,000
left but a very much diminished
amount. because he still has to pay
his State and city taxes out of his
$4,000.
Mrs. Roosevelt unfortunately was
away when the executive order was
issued. Judging by her comments
when she came back. she would have
preferred 10 bring about the reduc-
ton In big salaries by means of tax
alton. She evidently is under the
impression that the salary ceiling
was accomplished by law or by the
tax method, for she says she was
surprised to find that income from
Investment was not covered by the
recent limitation on salaries and she
added: But I was assured we would
tax that, too"
Mrs. Roosevelt apparently ex-
pected the Congress to do the limit
ing. She is credited with having
originated the whole idea, though
the CIO is claiming credit for it also,
and the reports generally circulating
around Washington are that the
President was afraid to put into
effect a freezing order on wages un-
less he accompanied it with the
salary limitation demanded OF him
by the CIO.
Specific Power Denied.
1t will be recalled that Congress
specifically refused to grant the
Presidents proposal for a s25,o00
limitation of salaries. but that the
Executive went ahead later anyhow,
claiming that he had the power
under the anti-infation law. just
how a reduction in pre-war salaries
of Americas most successful execu-
tives is a step to prevent imitation is
difficult to understand. and 1t is
quiet possible that the imitation law
was merely an excuse for an action
that was taken for political reasons
namely, to placate labor.
Not long ago James F. Byrnes,
director of Economic Sterilization,
said that only 5000 persons were af-
fected but that judging by the fury
raised 1t seemed as II 100000 were
affected. II the Government sud-
denly cut by two-thirds the salaries
OF all generals in the Army so as to
level them off to a point nearer the
scale Of enlisted men, there might
not be more than 500 persons af-
fected.
Maybe Americas managers of war
production plants aren't as impor-
tant as generals In the field, but,
judging by the way Americas man.
agement class is working day and
night to get planes. ships and NUM-
tions into the hands Of our men
quickly, they might possibly be re-
garded as worth some consideration
by their Government. They Ger
tainly will deserve distinguished
service medals when the war is over,
for they will have done their job
despite one of the most unfair ex-
amples of arbitrary authority ever
recorded In the relation of the exc
cutive branch Of our Government
to It's citizens.
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