Evening star., 1942-08-12
AH Opposes Proposal
To Place $4,000
Limit on Income
U. S. Chamber Urges 1923
Sales Levy and so
Withholding PIon

F. tht Associated Press.
The American Federation of
Labor notified Congress today it
was opposed to limiting net in
comes to $4,000 annually, as
proposed by President Roosevelt
and supported by spokesman
for the Congress of Industrial
Organizations,
Raymond G. Cranch of the Wash
ington research staff of the AFL
told the Senate Finance Committee
his organization realized that many
independent businessmen would flnd
1t necessary to restrict their actlvl-
ties, reduce their war work and de-
crease their employment of labor
under such limitation.
He commented
The Nation would indeed be
shortsighted to limit productivity
of it's businessmen by such an arbl-
trarv and infeXible rule
The Chamber Of Commerce of the
United States presented testimony
in favor of fiat 10 per cent retail
sales tax and a per cent withhold
ing tax
Wage Freezing Opposed.
Mr.. Cranch said the AFL approved
the levying of high taxes to win
the war, but can see no justice in
arbitrary wage freezing, either for
the worker or for the employer"
The AFL representative opposed
suggestions for an excess profits
tax on increased individual incomes
and urged postwar rebates for COR
porations paying over IS per cent of
total net income in taxes.
Opposing other pay roll tax deduc-
tions. Mr.. Cranch said the AFL be-
lieved social security levies could
he increased. He urged that indi-
viduals be permitted to take deduc-
tions from income taxes for medical
care and the payment of life insur
ance premiums. Mr.. Cranch eX-
pressed opposition to general sales
tax
Senator Vandenberg, Republican,
of Michigan, asked if the AFL
would favor a sales tax over a pay
roll withholding levy if forced to
choose between the two. The wit
ness replied his organization would
take sales tax in that case, so long
as it was not applied to food and
low-cost clothing.
The AFL representative urged the
committee to force all corporations
to compute their excess profits tax
on the basis of invested capital.
Would Raise IL Billion.
The Chamber of Commerce sub
mitted a program to the committee
which it said would raise $12,000,-
100000 in new revenue for war pur-
poses, as contrasted with the $6,27l,-
10000 provided for in the measure
under consideration. This would be
In addition to the $1,000 900 900
which it said was produced by pres
ent taxes.
Declaring a fiscal program based
on politics is as doomed as a war
program based on appeasement.
Ellsworth G. Alvord chairman of
the chambers Committee on Fed
eral Finance, said:
"A coura geous offensive is required
to fight initiation Victory on the
home front is vital There is no
place for appeasers."
Attacks House Proposal.
The program passed by the House
and now before the Senate commit
tee he said. tailed in both of its pri-
mary purposes--to raise the mini
mum amount required to finance the
war and to provide a control over in
fiation.
Describing the sales and withhold
ing taxes as the only two major,
untapped revenue sources" Mr.. AL
word said:
"a retail sales tax (eXempting Fed
eral State and local Government
purchases. with an effective rate of
10 per cent and per cent with
holding tax would produce more
than $4,000, 100000 of additional
revenue, and would produce this
amount currently, without delay in
collection.
The Treasury stands in the most
urgent need of this additional rev.
enue. If we avoid the issue in this
tax bill. We must face it in the next.
II is time to be realistic. The plain,
hard fact is that We must have the
money, and there in no other place
to look for it.
The arguments against both sales
and withholding taxes are the same,
that they fall more heavily on the
lower income group and curtail the
standard of living. But a realistic
appraisal of the present situation
compels the conclusion that these
are precisely the reason why we
should have sales and Withholding
taxes now.
Cites Increased Incomes.
"If 30O00,O00 families each had
Al 900 more income than last year
this would mean 100000, 900 OF
new purchasing power, competing
fpr a diminishing supply of civilian
articles. Taxes must cut down this
purchasing power Otherwise the
$50 900 900, coo will vanish. absorbed
lh the increased price Of goods. l.
We tax away portion of this pur-
chasing power, we may preserve The
balance. If not, it will be losI
through imitation. and every one, In
luding the Treasury, loses disas,
uously.
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