Evening star., 1942-02-01
TX
Poyinq for the War


people some 1876 billion dollars,
in appropriations and r. F. c.
loans. This we have actually
spent for making weapons and
for training man power.
Two years ago such a prospect
of spending for arms would have
taken our breath away. After
month of war this huge sum does
not begin to approach the cost OF
ultimate victory.
We were relatively slow in get
ting started, reluctant to stop
producing the goods of peace and
to start producing the instru-
mentS of war. Yet the past IL
months have seen the highest
Government expenditure in our
history.
In the calendar year 1941 we
spent close to 19 billion dollars
AS much as we spent in the
previous record fiscal year OF
1919. Defense and war accounted
for 12.5 billions. OF this 1.8 bill
lions were spent in the last
month of the year alone.
Record Sum Spent.
This record sum of 1.8 billion
dollars, spent in the month OF
December, 1941, while it exactly
equals our defense expenditure
for the last six months OF 1910,
represents only about % per cent
of the rate Of national income for
that month.
For the fiscal year 1943 the
President has submitted budget
calling for s56,oOo, 100000 in war
expenditures, or more than one
half of our national income.
Britains war effort already is
consuming about so per cent OF
her income, while Germany has
diverted an estimated so per cent
to war. The high German figure,
however, is made possible by the
systematic looting of materials
and goods from the conquered
countries.
Those responsible for financial
policy have endeavored to work
out a sound program of taxation
and borrowing, which would not
only produce the needed funds,
but would also translate into &C
ton these fundamental prin-
ciples; to pay as you go, so far as
possible, to spread the burden as
fairly as possible, and to avoid
the dangers of imitation. Each
of these principles called for the
imposition of higher taxes.
Tax Structure Widened.
Year by year the tax structure
has been broadened to reach
millions OF Americans who never
before had been called upon to
pay direct taxes. The Revenue
Act of June, 1910, took step in
this direction by increasing the
rates or widening the base OF
almost every existing tax. Octo-
ber, 1910, saw the passage OF q
second Revenue Act raising cor
porate income tax rates and IN.
Producing a new excess-prof1tS
tax. Another, though not an
immediate source Of revenue, was
provided by the Public Debt Act
Of February, 194l, which made
the income from all future Gov
ernment bond issues subject TO
Federal income taxes.
The stepped-up defense re-
ouirements that came with the
months that followed were re-
f1ected in the Revenue Act OF
September, 1941. This act was
intended to raise 35 billion dol
lars additional revenue. A broad
er income tax base and increased
rates were expected to draw IL
billion dollars more from individ-
uals and IA billions more from
corporations. Capital stock, estate
and gift taxes were to yield
$50, ,o00, 900 more, and excise and
miscellaneous taxes to yield $780,
100000 more.
The trend Of personal income
taxes over the past two years has
been toward spreading the cost OF
arming among more and more
Americans. Under the 1899 Rev.
enue Act 1000 900 people had to
pay income tax. Under the 1910
act 100000 paid taxes. This
March, it is estimated, 13,200 900
will pay income taxes. This is
not quite a third OF our non
agriculturally employed civilian
workers in November, 194l.
Exemptions Lowered.
The 1910 act lowered the exemp-
ton of a single person from 81 900
to $500 and of a married person
from $4,000 to $4,000, while the
l94l act again lowered the ex-
emptions to $3.50 and 1,500, re-
spectively. At the same time, ma
tional income was rising steadily,
swelling tax returns. On July /,
1910, the national income pay
ments were at the rate OF TAT
billion dollars a year; on January
l, 1941, the rate was 81 billions;
on July l, 1941, the rate was 80
billions, and in October, 1941, the
rate was 95 billions a year.
Revenue from individual income
taxes rose from 1891 600, 900 in the
fiscal year 1910 to 1.3 billions in
1e41, Al per cent increase.
Corporation income taxes reached
l.6 billion dollars or 70 per cent
more than the preceding year. A
steadily rising yield from corpora
tions In 1912 Is suggested by re-
cent Federal Reserve figures,
which show that 4l6 corporations
earned about 80 per cent more