Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-01-19
As-You-Go
ok Appeals
Hit Congress
Public Unresponsive
To March 18th
DeodIine Warning
BY DAVID LAWRENCE.

~ oNf1b LA w hEINSE,
Congress is beginning to hea
from home about the delay In enact
ing pay-as-you- go plan of taxa
ton.
The recent joint declaration b,
Chairman George of the Senat
Finance Committee and by Chair
man Doughton of the House Way
and Means Committee, warninI
taxpayers that they must pay OF
March 18th as usual, has been re
ceived with little enthusiasm iudg
ing by the letters arriving at tn,
Capitol. The people want to know
why Congress can't do something
about 1t between now ana March is
Congress has been here about two
weeks, and the country thinks the
two Houses can act promptly if they
wish to do. so. The citizens have
observed that Congress, when II
really wants to pass legislation
quickly, can do it overnight some
times. But Congress has to be con-
WINGED that the matter is urgent
and that the people want such &C
ton.
The pay-as-you-go idea has been
presented in various forms, notably
by the proposal of Beardsley Ruml
brilliant economist, whose work for
the New Deal agencies has been
consistently helpful. The Ruml plan
In It's essence, proposes that taxes
for the year 1912 be skipped and
that 1913 taxes be paid currently
instead Of a year late.
The Treasury Department for
reasons of its own, some expressed
and some uneXpreSsed, has been
opposed to the Ruml plan but has
limited that If some notifications
were offered, 1t might prove accept
able. But the Treasury isn't in any
hurry about 1t. If the Ruml plan
got lost in the shuttle of other mat
ters between now and March 18th,
the Treasury experts wouldn't be at
all disappointed.
Chief Objection.
The chief objection to the Ruml
plan from the Treasury viewpoint
and reflected recently by the Presi-
dent at a press conference-is that
the Treasury would be minus a
years revenues. The answer to this
is that such subtraction would &C.
cur over long period of years and
wouldn't be felt by the Treasury.
Perhaps the most interesting sug-
gestion yet made is that which the
New York Times recommended
editorially this week and which
Godfrey Nelson, its tax expert, previ-
ously has recommended, namely,
that individual incomes of 1912 and
l943 be averaged and that tax pay
ments be made currently on the
resultant amount. Thus, 1913 in
come would be estimated by each
taxpayer now and 1912 income is
known, and the two years would
be averaged and taxes would be
based on that average. II at the
end of 1913 the estimate proved high
or low, the citizen could amend his
return to adjust 1t to meet the ac-
tual figures.
The Godfrey Nelson plan meets
the objection of those who think the
skip-a-year proposal gives too
much of a break to the citizens. Ac-
tually neither plan gives anybody a
break, because the citizen will not
feel it while he is alive and when
he dies, his estate will be tax free,
but that merely means that the in
heritance tax percentages-usually
higher than tax rates-will take ap-
proximately the same or higher
amount from the estate.
The pay-as-you-go principle is
worth so much to the more efficient
handling Of the tax problems of the
citizen that it would be worthwhile
for the Government to adopt it,
even If the windfaH did benefit a
small percentage of the citizens. 1t
is fundamentally unsound for the
citizen to pay this years taxes out
of next years gross receipts, espe-
cially in times of uncertainty when
the Government is liable to be left
holding the bag.
Administration Costly.
The Treasury spends a consider
able amount of money to administer
the whole tax system and If the facts
could be gathered on the cost of ad-
ministration of taxes. it. would be
found that lot of official time and
energy, plus that of the citizens. Is
spent trying to take care of the
four inStallment payments on ar
income that is already year ole
when the fourth payment is made.
The dangers TO the Treasury If
time of sudden panic and depres.
sion are greater when taxes are paic
a year late Likewise financial prob.
lens of the individual are com.
plicated when he has to give thu
Government first cut out Of {
dwindling wage or salary in yea
that sees a severe decline in hi
income. The time when the pay.
as-you-go plan will be appreciated
most by the Treasury and by thu
people is when the next cycle o
depression begins.
The New Deal, which spends bill
lions in WPA projects in time o
unemployment, might find tina
bankruptcies and insolvencies tina
bring on unemployment when in
dividual finances go to pieces woul'
be fewer if the pay-as-you-go plal
is in effect during the boom years
Then. as incomes shrink, tax pay
mentS shrink coincidentally an
nobody will owe the Government
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