Askov American., 1942-03-26
Townsend Plan
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Who Would Receive the Annuity?

Who WOulQ Receive the annuity
All citizens who have reached the
age of sixty and who retire from
remunerative work would be eligible
to receive the annuity.
No matter how meager a person S
wages may have been throughout
his productive years, or how extended
his unemployment, upon attaining the
required age he could receive the
annuity.
If man is married, his wife would
receive in her own right the same
annuity providing she has attained
the age of sixty. Widows and single
women would receive the same con-
sideration given men.
Under the Townsend Plan there
would be absolutely no discrimina-
ton because of race, color, creed,
sex or class.
The Townsend Plan assumes that
no person desires to spend the best
years of life in idleness, suffering
the privation and misery of such an
existence. 1t assumes that all per-
sons do not have equal ability or op-
portunity to obtain decent work and
wages. It assumes that all persons
do the best they can throughout their
productive years. And so it gives
equal protection in retirement years
to everyone.
How Much Would the Annuity
Amount To?
The Townsend Plan has a twofold
function: First, to provide our sem
ior citizens with dignified and secure
old age. And second, to direct a
strong and steady flow of purchasing
power into trade channels. To achieve
this twofold function it is necessary
to have an adequate monthly annuity.
But at the same time it is equally
important that the amount be based
on sound economy. 1t must there
fore be an amount adjusted to our
national income.
Worked out on this sound basis,
the Townsend Plan at first would
provide a monthly benefit of approx
imately $4,000. But as this annuity
money flowed into trade channels our
industrial machine would start to
function properly. The national in
come would rise, and with it would
rise the amount of the annuity until
it reached the maximum of 5000 per
month.
BY providing for flexible annuity
the Townsend Plan reveals that ii
recognizes the welfare of the nation
as its primary concern. 1t uses the
elderly population as a means to
achieve functioning economy. Only
when this is done do these senior citi-
zens receive an amount sufficient to
allow them a comfortable old age.
Where Would the Money Come From?
The Townsend Plan proposes a
per cent gross income tax to be as
seSsed against all salaries and income
over $3.50 per month or $4,000 per
year. This includes wages, compen-
sation for professional services, in
come arising from the transaction of
business and all moneys derived from
rents, interest and securities.
Gross incomes up to So, 900 per
year are exempt. No one earning
less than $3.50 per month would pay
the tax, nor would any professional
man or business earning less than
$4,000 per year. In every case the
first $4,000 of wages or business in
come is exempt The heaviest bur-
den of the tax falls on those best able
to bear it.
Objection has been made that an
automobile dealer, for instance, might
have annual gross sales amounting
to $4,000 on which his profit is
only 81, 500. He would be liable, after
deducting his $4,000 exemption, for
tax of 2 per cent on $4,000, or
$400. Whereas, professional man
who might enjoy net income twice
as large, say $4,000 per year, would
pay only $50 a year. This objection
arises from a lack of understanding
of the tax system. 1t is natural that
the automobile man would add the
2 per cent tax on the sale price of
each car, as merchants have always
done; the buyer paying the tax and
the dealer acting merely as collector.
The operation of the tax would be
equally fair to business man, profess
sional man and worker. The in
creased circulation of money under
the Townsend Plan would result in
increased sales of automobiles and
this dealer, like all others, would
benefit in accord with his merchan-
dising ability.
It is conservatively estimated that
gross annual incomes in the United
States aggregate $365 billions at this
time; sos billions of this amount are
exempt from taxation since they rep
resent wages and salaries below $3.50
a month and exempt business incomes
under $4,000 a year. This leaves $500
billions subject to the per cent tax.
And that means a yield of Sc billions
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