Evening star., 1942-10-07
Wartime Tuxotion

VOIl1tlS OAOTIOU
The Senate is scheduled today to
get down to consideration of some
Of the thornier aspects of the new
tax bill, which, when combined
with State and local levies, is ex-
pected to cost the American people
$36, ,537 100000 But the end is not
yet in sight, for the Treasury De-
partment has served notice that it
will be back with request
for the raising of an additional
$6,0o0,00O,oO0.
Standing alone, the Federal tax
bill is expected to raise about
$25, 1000, 100000. OF this sum, $S,O00,-
100000 will be derived from new
taxes, and the most important ques-
tion awaiting determination is how
this can be increased to the
$4,000 100000 total desired by the
Treasury.
The approach to this problem
must be undertaken with a clear
understanding of the purpose of
wartime taxation. One purpose, OF
course, Is to raise revenue-to put
the financing of the war on a pay
as-you-go basis so far as that can be
done without crippling our produc-
tive capacity. And the second prin-
cipal purpose, though hardly a less
important one, is to make the best
use OF taxation as a weapon in the
fight against imitation. It is primar-
lily to serve this latter end that
the proposal to raise an additional
$4,000, 100000 of revenue has been
advanced. The question is how best
to get it.
Both Chairman George of the
Senate Finance Committee and
Chairman Doughton of the House
Ways and Means Committee, in
commenting on Secretary Morgen-
thau's proposal, indicated extreme
skepticism. Senator George said that
he thought the collection of $14,00O,-
100000 in one year in new taxes
would place too great a strain on the
American taxpayers. Mr.. Doughton,
Tor the time being, was content
with the observation that the Nor
genthau proposal was astounding. ;"
Yet, despite the great weight which
must be given the views of these
experienced committee chairmen,
there seems to be good reason to
believe that the controls which have
been set up to stabilize living costs
cannot function successfully unless
the mounting volume of purchasing
power Is curbed to a greater extent
than would be the case under the
pending tax bill.
In his presentation of the bill to
the Senate yesterday, Senator George
defended his victory (gross income)
tax plan with the assertion that the
Senate would have to choose between
this device and a retail sales tax
There are only two ways, he said, of
tapping the vast reservoir of national
income In the hands of low-income
groups-through gross income tax
or through general sales tax, which
is not yet in the bill.
There can be little doubt that
Senator George is right in this con-
tention. But if this is true of the
pending tax structure, if we must
have either gross income tax or a
sales tax to raise $4,000, 900, 900 of new
revenue, 1t would seem to follow in
controvertibly that we must have
both to raise $4,000, 100000.
Certainly, the time has come to
consider sales tax realistically as a
wartime measure. We ought to give
due weight to the fact that it has
been adopted, and is operating sue
cessfully, in most Of the other war
ring countries. Furthermore, it is
we'll adapted to the dual purpose of
raising revenue and discouraging
consumer purchasing. And, when
linked with income tax schedules
such as those contained in the new
bill, the argument that it ignores the
principle of taxing in accordance
with ability to pay loses validity.
II the Treasury is in earnest about
raising an additional 5000, 900 900, it
is to be hoped that it will abandon it's
outworn prejudices against the sales
tax, for this, under existing condi-
finns is the nnlu feo shi1a no,,rsa laf4