Evening star., 1942-10-19
VICIOUS PERSONAL TAX SPIRAL


The proposed bill creates 900 Federal taxpayers
2sOooooo of whom before paid Federal taxes
The tax in lower brackets, ranges from $685. In
come of $780, to $3.50, income of $50 Marred
man. no dependents-not including State income tax)
Thousands in these brackets cannot pay these taxes
which they have not expected nor prepared to pay.
Thousands of Others including the socaed rich,
not pay except from income expected in 1943.
To make THE NECESSARY DENT on the pending war
BILL tax rates 1943 income will have greater than
the high rates of the current bill
Thus rich and poor face vicious spral-HARDER
WORK to produce MORE income to pay PAST tax with
HEAVIER TAX DUE CURRENT income, with which the
past tax is paid.
Thus each year the taxpayer, large and small MORT
CAGES FOR THE NEXT YEARS TAXES the income with
which he pays the tax of the year previous.
The Treasury for years encouraged the policy pay
ing taxes In installnaents in the year following.
TT NOW is COMING HOME TO ROOST-
in the pantry of the poor in the payroll deduction plan
Of the Treasurs bond saesand in prvaon and prostra
ton of people AT WAR
stark analogy of this vicious tax spiral in
cient penal torture the water cure"
In the water cure the ncorrgble prisoner placed
In tank with water rising
To keep from drowning the prisoner must pump until
exhausted
The tax spiral goes the water one better.
For under the proposed SYSTEM the harder the taxpayer
pumps" to get the money for the past years tax
THE MORE HE OWES FOR THE CURRENT YEAR.
Inevitably there year when the income will not
pay the past years tax.
THIS VICIOUS TAX SPIRAL WILL END IN CON-
PLETE EXHAUSTION AND DESPAIR
UNLESS PROMPTLY RECOGNIZED AND REMED1ED.
EXCESS PROFITS" TAXES
We have said the tax bill is a dishonest tax BILL
The public taxpayer Federal State, is the financial
support OF the state in peace
He is not public enemy"
Whether person corporation he is entitled to fair
and honest treatment
HE SHOULD NOT BE LIED TO.
NOR SHOULD THE LAW LIE" TO THE PUBLIC
ABOUT THE TAXPAYER
Legitimate excess profit" when the term is tr1thfuy
used, is term dating from the First World War.
It designated the profit which company earned beyond
its prewar profit ratethe profit due in theory TO WAR.
In arriving at the profit, the normal profit
deducted from the profit of the war years
What remained excess, properly taxable at higher
rate than normal profit"
But in the pending BILL and in the 1941 BILL trick de-
vice pulled out of the hat
Proft Of corporations and partnerships was effect
declared to be that which earned BEFORE Federal
taxes deducted.
Excess profit" was that amount by which companys
income, BEFORE FEDERAL TAXES WERE DEDUCTED,
exceeded pre-war years.
Thus, in effect, the bigger the REGULAR FEDERAL
TAX norma and surax the greater the "excess profit"
Under this tax trick many companies and partnerships
making far less profit than in years. paying Tex
cess profits" taxes
Most OF these companies those never engaged and
not now engaged, in production Of war materials.
They the backbone of the Nations industry in time
ofpeace.
But "lying tax might be justified in war-if 1t
produced revenue.
The 90 per cent socaed excess profits" tax of the
pending bill, will not produce revenue.
For corporation can afford to produce income Of
which 80 per cent is taken for taxes.