The Waterbury Democrat., 1942-01-07

curity system begin as soon as pos sible and that the new benefit plans be operative one year thereafter.
 Two of the $9,O0O, 100000 of new revenue sought would come from social security taxes. But whether payments of the many thousands of persons who would be newly brought into the system would pro- vide that entire $2,000, 100000 seemed to be in doubt. MT. Roosevelt, at his budget seminar, appeared to be- lieve that 1t would. Budget Director Harold D. Smith, however, said there would have to be some in- crease in social security levies.
 Booming Business
 Booming business combined with higher taxes imposed during the past two years will provide at existing rates treasury tax revenue of SIS, 900 100000 in the 1943 fiscal year of which approximately $l1.316,000,O00 will be derived from income, excess profits and unjust enrichment taxes.
 MT. Roosevelt,s message discussed taxes in some detail, emphasizing the necessity of taking into account revenue requirements, equity and economic necessities. He emphasized that the tax program was being de- signed in large part to combat in f1ation.
 "A number of tax measures have been suggested for that purpose" :" he continued, such as income taxes collected at the source, payroll taxes and excise taxes. urge the Congress to give all these proposals careful consideration. Any tax is better than an uncontrolled price riSe."
 President Queried
 Under questioning, MT. Roosevelt definitely limited the scope of that statement by explaining that by such measures" he meant only Tn the form of Selective excise taxes. He explained that these were especially useful because:
 1. They raise revenue.
 ?. They put a brake on imitation.
 3. They are brake which easily can be ::'emoved to head off post war deflation.
 And to that end--the quick re- moval of brakes or to facilitate further checks on imitation ten dencies-he urged Congress to ob- tain the greatest possible flexibility in our tax system" He suggested quick adjustment of the timing of tax cole ctions in emergency--a hint that income taxes may finally be taken on a monthly basis, or there aboutS.
 MT. Roosevelt explained that it was his desire to change the whole excess profits act.>
 Excessive profits undermine unity and should be recap.ured," MT. Roosevelt said. '"The fact that a corporation had large profits De- fore the defense program Started is no reason to exempt them now.
 Unreasonable profits are not necessar.' to obtan maximum pro- duction and economical manage ment. Under war conditions the country cannot tolerate undue profits.'
 SOIt DTAnk company
 In explaiaing that passage in his bucget message, the president cited d sott drink company and said on a basis of original investment re- turns might now be as great s.s 100 per cent. In short, he ap- pareLiJly intends to ask Congress to impose excess profits on basis of first or ,arly capitalization rather than on more recent capitalization computations.
 Proposing re-examination of "pri- vileged lr;aClrent" accorded certain types of bushes for corporate in- come tax purposes, MT. Roosevelt explained under questioning that there had been some scandalous situations under prevailing pro- ! visions for depletion allowances &C., coroed oil and gas producing con- panies. He intimated, also, that he would welcome abandonment of the community property" income tax policies in tr, few states which follow them.
 The president revealed to his seminar questionerS that he mad been appaIied in the past few weeks by the tremendous proportion of production still consumed by civil lanS. He took steel as an example. The country is devoting only 35 per cent of its steel output to war pur- poses in comparison with Great Britain's diversion of 75 per cent of steel output to war. He said that we shortly would be devoting 55 to 60 per cent of steel output to war.