Evening star., 1943-12-09
0'M'ahoney Presents
Incentive Tax Views
On Star Radio Forum
Believes in Rewards
For Men Who
Create Jobs

Profits made after the war in new
independent enterprise should be
less heavily taxed than other profits
Senator O'Mahoney, Democrat, OF
wyoming said last night in explain
ing incentive taxation" on the
National Radio Forum. I'm other
words" the Senator said, II believe
that we should reward the men who
by their ingenuity and their money
create new jobs"
The Senator discussed incentive
taxation over the Blue Network from
Station WMAL in the weekly forum
feature arranged by The Star. He
brought G. w. Hazelett, author OF
Dynamic Capitalism, from New
York to answer questions on incen-
tive taxation before the microphone
Both were introduced by Edward
Boykln, who conducts the forum.
In the ensuing discussion, the Sen
ator and the author explained the
principle of taxation they were ad.
vocating thus:
1T has been my experience" Sen
ator O'Mahoney said. that many
owners of capital decline to invest
because, they say, under the presen,
system they take all the risk while
the Government takes most of the
profit. Therefore. they tend to hole
on to their money until they see q
sure thing Thus the willingness
to take risk in new enterprise is
reduced and we become dependent
on the Government or on monopoly
for the investment which provides
jobs. How would incentive taxation
promote investment?"
Would Put Money to Work.
Mr.. Hazelett's answer was. by
making it more profitable to invest
than not to invest. We would re-
quire every corporation and busi-
ness to use its money to employ men
to convert its plant, expand its pro-
duction, improve its facilities and
working conditions, do research or
to promptly pay it's profits out in
dividends, or temporarily lend its
funds to other businesses, in order
to lower its tax rate 1t would be
more expensive not to use money
than to use it. Thus we would put
money to work to keep our labor
force on the job and to re-employ
our heroes as fast as they are de-
mobilized"
Senator O'Mahoney asked if in
centive taxation applied to indivi-
duals as we'll as corporations.
Definitely" answered Mr.. Haze
lett If have money and I do not
use it to buy something. some one
is out of a job and is without money
to buy from another. Then the lat
ter is out Of a job and SO on. In
centive taxation requires me. you
and every one else who might con-
troll any substantial amount OF
money either to spend it promptly
thus creating markets for business
or to invest it directly or through
the savings banks or insurance COM
panies, in creating new business
new enterprise, new development
new jobs. In this manner the money
promptly and continuously flown
back to both big and little business
to provide them with capital to
convert and expand their plants"
Higher Taxes Advocated.
Irrespective of incentive taxation
Senator OMahoney. said, higher
taxes should be enacted Immediately
to increase the revenue of the Gov
ernment.
Il shall not take the time to dis
cuss the ways and means of in
creasing Government revenue" he
said. Il shall only say that a COM
pilation published in the New York
Times last Sunday of the earnings
of 287 industrial manufacturing
companies shows that in spite of
heavier taxes and higher costs of
labor and materials the profits of
these companies were IL per cent
higher for the first nine months of
1943 than for the same period OF
1912. They had a combined net in
come of 1868, 100000 in the l94a
period against 1858 100000 in the
1912 period. These were profits that
were made out of the Government S
borrowings against the future. 1t
certainly requires no argument to
prove that unless we make some
effort to pay the Government bor-
rowings back out of present earn
ingS, the task for the future will be