Evening star. [volume] (Washington, D.C.) 1854-1972, 1942-05-08
Sales Tax Proponents
Spurred by Proposal
To Cut Exemptions
Other Drastic Plans
To Curb InfIution
Also Suggested
By the Associated Press.

By the Associated Press.
A host of new and drastic anti
Initiation proposals emerged to-
day on the heels of a sudden
Treasury decision to ask Con-
gress for cut in personal in
come tax exemptions.
High administration sources said
that since one of the purposes of the
intimidation program is to soak
up" excess purchasing power, con-
sideration had been given to such
ideas as a Federal retail sales tax
Gin addition to all other tax in
creases), doubled social security
taxes and compulsory purchases of
War bonds.
Those steps were advocated pri-
vately by some influential admins
tration leaders before President
Roosevelt sent his cost of living
message to Congress last week. The
President did not mention those
items, but promised further legisla-
tive recommendations If necessary"
Morgenthau Reverses Stand.
That pledge started to take shape
yesterday when Secretary Of the
Treasury Morgenthau, reversing a
previous stand, asked the House
Ways and Means Committee to cut
personal income tax exemptions. He
suggested that the exemption for a
single person be cut from $3.50 to
5000, for family head from 1880
to 81 200 and for a dependent from
$500 to $500. The Secretary esti-
mated that this plan would add
$l,1O0, 900, 900 to the $500, 900 900
annual revenue expected from other
recent tax proposals.
Informed sources said the Treas
ury plan was compromise Of the
Recommendation of other admins
tration leaders that the eXemp-
tions be cut to $500 for single per-
sons, $1,000 for family heads and
400 for dependents.
Secretary MorgenthauS new pro-
posal took committeeman by SUP
prise, and few were willing to pre-
dict what the result would be.
Sales Tax Seen Assured.
One sales tax prepayment said,
This assures a sales tax" because
Congress would not dip 50 deeply
into individual income. Another
committeeman said the recommen-
dations, if adopted, would kill senti-
ment for q sales tax.
Chairman Doughton of the COM
mittee, asked which he preferred.
sales tax or lowered exemptions, re-
piled, 81 don't like either"
Representative Knutson, Repub-
lican, of Minnesota, another commit
teeman, said, You can bank on it"
that Congress would vote for sales
tax in preference to the low exemp-
uons. Representative Reed, Repub-
lican, of New York agreed, remark
ing, You can get too low on ex-
emptions and possibly ruin a seq
ment of society,"
Representative Doughton said it
was not likely that any major de-
cisions would be reached today.
, we WlRllt pray over tlllS SATURDAY
and Sunday" he remarked. -..
Income Hits Record High.
Officia11y, the administration is
opposed to sales taxes, but unofi-
cially, large group of high officials
believe that under war conditions
there should be such tax, disguised
as a war consumption tax"
Perhaps the most controversial of
the other unadopted proposals would
ask Congress to require every one to
put at least fixed portion of his
income-probably IS or 20 per cent
into either taxes or bonds. Thus If
a citizens allotment came to 500
and his taxes were $50 he would be
billed for $50 of bonds. Some ex-
emptions might be allowed for other