Detroit evening times. (Detroit, Mich) 1921-1958, 1942-06-01
Keep Business Solvent
By Assuring Tax Flow

CENAToR WALTER F. GEORGE of Georgia, chair
man of the Senate finance committee quietly rend-
erng patriotic service of immense value to the American
people.
Recognizing the need for unprecedentedy large tax
collections order victory against the Axis
Senator George trying TO modify the treasury plan
to make it conform with the continued solvency of Amer
lean business institutions.
The Senator is standing guard to avoid an I'M
whiting economic "scorched earth" policy, which would
destroy American productive power, a result of bu-
reaucratic fiscal blunders
Wanting to keep American companies alive
producers and as postwar employers of men in the
armed services in armament trades Senator George
insists that tax policy should not strip corporate borrow
of their capacity to discharge existing debt.
In recent speech delivered on the floor of the Sem
ate, the soon from Georgia ucdy stated the needs
follows
There is vital omission In our present income tax
law. say vital omission because, with rapidly rs-
ing tax rates, with exceedingly high rates. provision
must be made for deductions from the income of
taxpayers TO meet debts contracted for prior this
period.
sI AM pleased to say that repeated conferences with
i the treasury lead to believe that the secretary
of the treasury will recommend to the ways and means
committee of the House the inclusion suitable
provision allowing deductions of payments made
isting debts.
"Under the present law, deductions are permissible
only for interest paid upon debts and not upon any
amortization of the debts
THAT has been bearable long the general level
OF income taxes has remained reasonably low.
But that level advances, the debtor taxpayer Is
simply unable to Hquidate his debt unless some deduc-
ton Is allowed for payments upon existing debts
should like to say at this point also that the whole
American Industrial machine Is undergoing depre-
citation and ObsOescence at rate rapid than
before in the history Of American industry, perhaps in
the history Of industry In the world.
1T is therefore doubly necessary not only that pro-
vision be made for payments existing debts against
Of Init that
sion be made for reserves.
"These reserves essential so that there NAV be
some possible cushion after the Is over when the
whole industrial machine will have become obsolescent
In a degree higher than ever before"
Q ENATOR GEORGE has thus wisely proposed
~ formula for implementing President Roosevelt's
recommendation in his seven-point antinfation pro-
gram that strong effort be made in wartime to pay
of existing private Indebtedness.
In order that debtfree corporations would be SINH
lary encouraged to themselves for the postwar
provision with recommendation recently made by Clin
ton Davidson OF Fiducary Council for eXemptng stip
ulated percentage of corporate income from taxation
provided that amount is used for the purchase non
negotiable federal bonds to act for post
emergencies.
chnery whereby the American people produce and ex
change goods is to be perpetuated.
In levyng new taxes, which in the nature of things
must be onerous the Congress should be mindful
of Chief Justice Marshars dctum that "the power to
tax is the power to destroy"
Senator George has sensiby proposed Way to as
the uninterrupted flow of through the years
by preserving the taxpayers.
RAEPIklG OONJM an TILE hC\A/c.