Evening star. [volume] (Washington, D.C.) 1854-1972, 1942-05-14
Morgenthau Favors
Minimum Tax on All
Filing Income Returns
S., He Says, Would Pay
For Handling Papers
And Ruise 100 Million
BY the Associated Press.

Secretary of the Treasury
Morgenthau today advocated a
minimum tax of several dollars"
on every one who files an income
tax return.
Under existing laws, millions of
people whose personal exemptions
and other deductions exceed their
income pay no tax at all, even
though they have to file returns.
Secretary Morgenthau said his
experts were studying the constitu-
tionality of the proposal, and, If
they found a legal method of hav-
ing such minimum, he would ask
Congress to enact it.
Later, Randolph Paul, top Treas
ury tax expert, sent word to the
press there was mo question that
such proposal would be constitu-
tional.' Mr.. Paul said questions of
legality could be avoided by calling
the special minimum tax an lex
else" instead of an Income" tax.
Georges Backing Seen.
The Secretary pointed out that
similar tax has been proposed by
Chairman George of the Senate
Finance Committee, who calls it an
examination fee," because it would
reimburse the Treasury for the ex-
pense of examining otherwise nom
taxable returns.
At one point in the press confer
ence in which he revealed the pro-
posal, Secretary Morgenthau sug-
gested IS as a suitable minimum,
and estimated that the Treasury
could collect 100000 900 a year
through this method
That's a tidy sum and We can
use it." he commented.
MOrgenthau Converted.
Secretary Morgenthau said the
committees action yesterday in vot-
ing to reduce personal income tax
exemptions on scale differing from
his own suggestions were acceptable
to him.
He explained this sudden reversal
of position came after he saw secret
Labor Department studies indicat-
ing persons in low-income groups
had much larger proportion of the
purchasing power of the Nation
than he formerly suspected
This, he explained, made it seem
necessary to remove through extra
taxes some of the money that could
be used to bid up prices of commod-
tiles.
Although declining to discuss
further President Roosevelts pro-
posal to limit individual incomes
to $4,000 a year, after payment of
taxes, the Secretary revealed that
the Treasury is about to use some
existing powers to prevent corpora
lions from giving excessive salary
raises to their officials.
Would Prevent Abuses.
While this power could not, he
said, be used to reduce normal cor
porate salaries, regardless of their
level, Treasury could keep corpora
tions from decreasing their own
taxes by spending their profits on
big pay increases for their higher
OfhclalS
The Secretary also mentioned that
he believed it was unfair not to
require farmer to pay income tax
on the value of his produce that
he consumes on his own farm, just
the same as the produce he sells
at the market. He added, however,
that he planned no steps to change
this situation.
Noting that the House Ways and
Means Committee rejected his re-
quest for modification of the in
come tax law on depletion of oil
wells and other wells and mines. the
Secretary said he would renew his
request in the Senate.
Mr.. Morgenthau said sales of War
bonds so far this month were run
ming ahead of the $500 900, 900 quota
(See TAXES, Page A-4)