Evening star., 1942-04-29
BY OLIVER MCKEE.

taxes required 10 nnance the tOtal
war program and the possible i'm
position of a ceiling on individual
incomes in the new war revenue
legislation. millions of American
families face sharp reductions in
their present living standards-re-
ductions which will make necessary
drastic revision in their budgets
How will the new tax burden
affect the life insurance protection
enjoyed by the American people?
Unlike expenditures on consumer
goods, recreation and non essentials,
life insurance payments are a fixed
item in the family budget, repre-
senting commitments made in most
instances, before the war. 1t seems
likely that the upping of income
tax rates will make it difficult for
many Americans to maintain their
life insurance protection at present
levels.
Because of the vital Importance
of life insurance in our national
economy, both as a stabilizing social
influence and as a savings institu-
ton, the problem of maintaining
insurance protection without i'm
pairment, during the present ma
tional emergency is commanding in
creasing attention.
Social Value Recognized.
Great Britain and Australia have
long recognized the social value of
insurance as an instrument of ma
tional thrift by allowing credits or
exemptions for premiums paid by
taxpayers on life insurance policies,
Canada, too, has followed the same
principle in allowing a credit for
payments made to pension or retire
ment funds.
Though permitted to deduct in
terest payments on Indebtedness
and contributions to charity within
liberal limits, American taxpayers
in computing their Federal taxes,
under the present law. can claim no
deduction or credits for premiums
paid on life insurance policies.
In appearing before the House
Ways and Means Committee on
April 9, Charles J. Zimmerman of
Chicago, chairman of the Law and
Committee of the Ma
tional Association of Life Under
writer's, urged that credits be au-
thorized in the new tax law for pay
ments on life insurance premiums.
The broadening of the tax base
and the higher rates on individual
income taxes and surtaxes, Mr.
warned, may not only
bring about certain hardShips and
but will make it difficult
for the individual to provide for
himself in the event of old age and
for his dependents in the event of
premature death. In realistic study
Of our entire income tax structure,
it would seem most desirable for
your committee to examine the
social and economic benefits to
society as whole through extending
to the taxpayer income tax incen-
tives for the purchase of life in
to protect the home"
Sees Thrift Encouraged.
In a recent address at Akron,
Ohio, Claris Adams, president of the
Ohio State Life Co., strongly ad-
vocated the deduction of life in
surance premiums in reasonable
from income taxes.
The war effort has caused a great
shift in national incomes, Mr.. Adams
pointed out. THE chief bene-
ficiaries have been the lower and
income groups" he said
1T is of great public importance
that these people should be sold on
saving a portion Of their increased
incomes, as hedge both against
war imitation and postwar inf1a-
ton. A tax incentive for them to
save by making life insurance pre-
miums deductible for reasonable
amounts would cost little in the way
of taxes, but gain much in the form
of public thrift.
Even during this war emergency
charitable gifts are regarded as
proper tax deducations. Is not the
care of ones dependents through
sacrifice and self-denial involved in
the payment of premiums for life
insurance of as great social benefit
to the Nation and of much more
economic Importance to the country
than even contributions to the
worthy cause Of public charity?
Permits Creation Of Estate.
High taxes, necessarily imposed
as a consequence Of an all-out war
effort, will be with us for genera
tions Probably the only practicable
way for the average man to create
an estate for many years to come
will be through the medium of life
insurance. 1t will be manifestly i'm
possible for those of average incomes
to save large sums from ordinary
salaries and still pay the extraordi-
nary taxes which will be permanen,
in our time. Perhaps nothing will
contribute more to the strength OF
our economic order than the crea-
ton of estates by the great middle
class OF Americans which has al
ways been the bone and sinew o.
our Nation"
Under the tax proposals submit.
ted to the House Ways and Mean.
Committee by Secretary Morgen.
thau in March, a married man
without dependents, with a net in.
come of $4,000 would be required tt
pay $285 in taxes, as compared with
sl38 under the present law.
On $1,000 net income take.
would be increased from s375 u
AnnOlInCem