Evening star., 1942-04-28

VOWED within Jay U. hayden
the administration circle and be-
tween the President and his con-
gresSional leaders. The overwhelm-
ing weight of opinion, including
Chairman Mariner s. Eccles and
all other members of the Federal
Reserve Board, Vice President Wal
lace, Price Administrator Henderson
and Budget Director Harold D.
Smith, held that either heavy taxa
ton or enforced saving, applied to
the lower income levels, is the very
first and most vital essential.
Secretary Morgenthau originally
felt the same way about it, as indi-
Gated by the fact that he once
broached the idea of a Is per cent
Withholding tax applicable to all
pay rolls. But Mr.. Morgenthau
subsequently changed heart, possibly
after sounding out the White House.
In the final analysis, of course, it
was Mr.. Roosevelt who cast the die.
He agreed to a fixed ceiling on
prices and rents, limitation of farm
prices to parity, and a somewhat less
definite stabilization Of "remunera-
ton received by individuals for their
work" Profits, he said, must be
taxed Ito the utmost limit consistent
with continued production" and all
individual incomes in excess of
SIS; 1000 net should be taken COM
pletely.
Wage Garner Untouched.
But there is not one word in the
message even remotely suggesting
that the four-fifths or more of the
total extraordinary war expenditure,
which goes to wage earners, should
be drawn upon, beyond such pur-
chases of War bonds as they volun-
tarily may make.
AS all of the Governments fiscal
advisers, excepting Mr.. Morgenthau.
seem to agree, this attitude Is utterly
inconsistent with both the desire to
control imitation and the cost of
living, and with extraordinary need
for cash with which to meet the war
cost.
AS now calculated the total Gov
ernment expenditures in the coming
fiscal year will be in excess OF $70,-
900, 600 900. OF this, the experts say,
$50, ,0O0, J, ,o00, 900 or more will find its
way inte pay envelopes. 1t is vari-
ously estimated that Of the latter
sum from $4,000, 900 900 to $3o,ooo,-
600, 900 will 60 to wage workers in
excess of what they received prior
to the war boom.
It is contended that, unless at
least a substantial portion of In
crease industrial earnings is drawn
back by taxation, enforced saving
or some other process, inf1ationary
price rises are inevitable.
Canada's Case Cited.
On this point a statement as to
Canada's experience by Floyd S.
Chalmers, editor of the Financial
Post of Toronto and one of the Do
minion's foremost economic anal
ysts. Is interesting. In substance,
it says that Canada's price-wage-
rent ceiling would have failed ex-
cept for the accompanying heavy
taxation In the lower income brac-
kets and intensive promotion of
| Government bond sales.
"The big thing Canada has
learned Is how to mop up civilian
purchasing power" Mr.. Chalmers
said.
Canada has both pay roll tax
ranging from 5 to 7 per cent and
starting at a $500 annual income.
and a general manufacturers sales
tax of per cent, with much higher
rates applicable to specific luxuries.
Great Britain has sales tax of
II per cent on seminecessities and
"a per cent on luxuries, plus an
enforced saving provision applicable
to income tax payers in the lower
brackets.
Present American Treasury rec
concentrations call for raising only
$27, 900 900 900 In taxes to Offset the