Askov American., 1942-06-11
WE ENDORSE:

1. The excess profits tax rates
proposed by Secretary Morgenthau.
But we believe they should be based
on invested capital and that all pro-
fit above per cent of invested cap
ital should be considered excess pro-
fit and taxed accordingly for the
duration of the emergency. 1t is
estimated that such a tax would
raise at least 4 billion dollars.
2. The closing of all loOphOles
now used by corporations and indi-
viduals to evade taxes.
(a) This includes the Treasury
proposal for the mandatory filing of
joint tax returns by husbands and
wives. We can see no basis for the
contention that such a law would
in any way affect the independence
or rights of women.
(b) It also includes the Treasury's
proposal for the taxing of all pres
ent and future issues of municipal,
state and government securities. But
we believe that all such securities
issued in the past should also be
subject to taxation at this time. In
this critical national emergency, any
tax exemption clauses appearing in
these past issues cannot be consid-
cred an unbreakable contract any
more than a work contract between
a draftee and his former employer,
or the marriage contract wherein
a soldier has promised to keep his
wife in sickness or in health. War
has called upon the soldier to break
these promises temporarily; the gov
ernment should do no less with the
holder of tax exempt securities.
: 3. The higher rates on individual
incomes in the middle and upper
brackets as proposed by Secretary
MOrgenthau.
WE OPPOSE:
AS does Secretary Morgenthau,
any general sales tax. A sales tax,
which is unjust and discriminatory
at any time, since it falls most heav-
lily on the low income groups whose
incomes are almost wholly spent on
consumer goods, would be today a
real danger to our national existence
The family food bill is up Is per
cent since the war began, the cost
of living is up Is per cent and shoot
ing upward at the rate of 1h per
cent month, rents have risen from
to 100 per cent in defense produc-
ton areas and hundreds of thou
sands of bread winners have been
taken into the armed forces.
Figures submitted by the U. S.
Treasury show that the sales tax is
the exact opposite of the ability-to-
pay income tax. The income tax
graduates upward from nothing on
lowest incomes to top of 80 per
cent on the biggest incomes. But
a 10 per cent sales tax, which starts
at 10 per cent on those making less
than $500 year, graduates down.
ward to 2.7 per cent on people max
ing more than $4,000 year.
People making $500 a year or less
already pay % per cent of this in
taxes of all kinds, according to a
TNEC report. A 10 per cent sales
tax would take 10 per cent more of
the income, bringing the total tax
bill of this group to 80 per cent of
its sub-standard income. Would this
contribute to our successful prose-
cution of the war?
The contention of some groups that
purchasing power must be drained
from the low-income groups to pre-
vent initiation is invalid, in our opin-
ion. The National Resources Plan
ming Board has recently published
figures which show that low-income
families spend most of their money
on food and clothing, which is plenti-
full, and buy comparatively few of
the consumers durable goods in
which there are now shortages. The
report shows that the average fam
ily making less than $1,000 a year