Evening star., 1942-04-30

selves without management.
The men who earn big salaries in
America are those who have been
successful. They are the men, by
and large. whose genius and skill III
handling large enterprises must be
utilized effectively to win the pres
ent war, in which industrial man
agement and production are as vital
as military operations. For armies
without planes, tanks, ships and
guns back of them not only have
been defeated, but will continue to
be defeated.
While 1t Is considered expedient
to keep the morale OF the workers
generally intact by telling them that
their wages will not be restricted by
legislation, the administration does
not hesitate to tell the entire man
agement class that its wages must
be reduced drastically.
Commitments Large. =,
Most Of the men who have salaries
above $25,000 have commitments.
They have obligations already
pledged to support churches. schools,
colleges, hospitals, etc. They have
insurance policies on which they
pay premiums 50 that their children
and families will not be left de-
pendent on public charities. They
have various expenses which they
do not charge to their companies
because the income tax rulings will
not allow 1t but which have been
deemed by them to be essential to
their business operations.
All Of this has to be Topped OF
II the $25, 900 limit is enforced and
nearly every important management
man must rearrange his entire
scheme Of things. 1t is q safe as
sumption that most Of the business
men will not complain and that
they will make the sacrifices needed.
But 1t Is important to note that no
such drastic readjntment Is being
required of any other class in the
community, with the exception OF
the soldiers and sailors who have
gone to war. The vast body OF
citizens will, Of course, ultimately
be affected. Whatever the man
agement class ceases to earn-and
there will be tendency to reduce
incomes by accepting less salary
will have to be paid eventually by
the other taxpayers.
Under the present tax structure
a married person with two depend
ents would need an average net in
come OF $38,250 in order to retain
e25,0W Of net income after taxes.
The corresponding amount Of gross
income would be $45, 400.
Under the Treasury's tax pro-
posals 1t would require $6s, ,4s0 OF
gross income or $4,000 OF net in
come to retain SIS, 900 OF net in
come after taxes. The Treasurys
plan is not far away from what the
President has proposed.
Eliminates Tax Revenue.
II all citizens in the high brack-
cts were able to hold their net in
comes down to $57 1900 there would
be eliminated about $787 900 900 of
taxable income. The number OF
persons with net incomes in excess
Of $4,000 is about 12,545
Thus, If the incentive to earn is
taken away the Treasury stands to
lose q substantial part of the $751;
000O0 unless it can be reached In
other ways. The result OF the heavy
tax will be the giving away of prop
erty TO other members OF the fam
Ny, TO relatives and institutions so
that dividends and interest and
what Is known as unearned income
will be diminished and hence taxes
reduced.
Unquestionably. If kept after the
war, such a plan will keep enter
prising individuals from starting
new businesses because private cap
ital to be raised among friends will
be virtually non-existent. There
will be little incentive to buy stocks
or bonds II ones net income is
already at the s57 200 mark.
Maybe a nation of management
men without any incentive can be
developed. Maybe management men
have a higher sense of duty than
labor union leaders and admins
tration officials who have insisted