Evening star., 1942-12-03

enue have been David Lawrence.
trying to write a decree reducing
the salaries of businessmen. There
has been much backing and filling,
much debate and much discussion,
but all of it has been secret.
At last the regulations" have
been issued. They have the force of
law and persons can be put in jail
for violations thereof. Congress re-
fused to put top limit on salaries,
but Mr.. Roosevelt disregarded the
will of Congress and permitted his
bureaucrats to twist the anti-int1a-
ton law into alleged power to re-
duce pre-war salaries on the ground
that this prevents imitation.
The new regulations are ambigu-
Gus. They do not clearly say that
citizen shall have maximum of
$4,000. They say that his maxi
mum salary shall be reduced by
taxes. without taking into account
the deduction written into the reve-
nue. laws. But the unofficial word is
that actually the Bureau of Internal
Revenue has been instructed to con-
strue the new regulations so that
S67, 200 Is the gross salary and that
If man has deductions he will be
allowed to keep more than a net of
S25,0O0.
Consciously Vague.
It may be asked why, if this is
the case, the regulations don't
frankly say so. The answer is that
it is very necessary to make the
CIO believe that its demand for
limit of S25 900 on salaries has really
been granted. When the experts in
the Bureau of Internal Revenue
tried to work out the original execu-
tive order and subsequent regula-
tions, they found it couldn't be done
without violating existing tax laws
which provide for deductions. So
secret instructions apparently have
been issued to use SGT 200 as the
basic amount and to permit allow
ances for deductions, so that, con-
ceivably, If man has $67, 200 of
deductions due to losses and other
credits, he could retain as much as
$4,000 and pay no tax at all.
The revenue laws permit such
result, but the regulations as issued
today do not. Doubtless the CIO
will be assured that out of the 5000
persons affected very few, indeed,
will have such deductions and that
certainly it may not happen in more
than one year, so that ultimately
the persons with $4,000 will have
somewhere around s25 900 left any,
way.
1t is important that the CIO be
placated, for ever since John Lewis
left that organization, the report
has been heard that everything must
be done to build up the prestige of
the CIO so that Mr.. Lewis will not
be able to undermine his brethren
in the organization he founded.
credited with the idea of limiting
salaries to S25,O0O, must be vindi-
Gated and that's important, too, to
those who are given the difficult
task of writing regulations, So
what has been written and made
public would appear literally to pre-
vent anybody from having any more
than $25,000 left after taxes are
paid, and deductions to be ignored
whereas actually the Bureau of In
ternal Revenue understands that, in
practical application of the regula-
tions, the deductions still stand
Secrecy Avoids Proof.
This technique of facing both ways
Is possible only because the admins
tration does not want to appear to-
day to have reversed its original po-
sition. 1t wouldn't like to announce
that it has agreed to a salary of
$4,000. It sounds better politically
to talk of "s25,0Oo net income"
Anybody with any sort of deduc-
tions-often running for legitimate
reasons to 10 or even 20 per cent
OF a gross salary-will in a number
of instances be permitted to retain
sums in excess of S25 900, according
to the latest word from inside
sources But 1t seems the regula-
tions mustn't say so. 1t must remain
secret, and doubtless, since indi-
vidual income tax returns are not
made public. there is no way of dis
proving the claim of the administra-
ton that s25000 net is the top limit.
Another thing which the regula-
tions do that seems at variance
with the act of Congress is in ref
erence to the wage and hour law
known as the Fair Labor Standards
Act The anti-inflation law spe-
officially says that nothing in the
measure is in any way to suspend
or affect the wage and hour law,
But in the regulations" just issued
will be found this amazing para
graph:
Payment for overtime will con-
stitute an increase in salary rate.
and thus will require the approval
of the commissioner, unless the Gus
tomary practice of the employer
has been to pay for overtime and
the rate has not been changed"
The rate specified in the law Is
time-and- half, and if an employer
has not paid for overtime in the
past he has violated the law. Under
the new regulations, he must con-
tinue to violate the law. Thus are
the star chamber regulations pro-
claimed without opportunity for the
public to be represented to challenge