Evening star., 1943-10-06
Taxes Thut Hurt

y
adoption of tax program that would
impose an unprecedented burden on
! the people of this country during an
election year. This attitude, in many
respects, is commendable. The i'm
mediate reaction of members of the
| Ways and Means Committee, which
eventually will write the new tax
bill is one of hostility. however Po-
lltical considerations may have in
f1uenced some of the members in this
reaction. But it does not follow that
! the committee members are thinking
! only of election day. There is
very serious question. as Chairman
Doughton has said whether the tax
payers. or some of them, can bear
the burden which the Treasurys pro-
poSals would impose.
There is one thought that must be
. kept in mind as Congress begins its
/ consideration of the bill. We are at
war, and war demands heavy sacri-
fees Of all. The probabilities are
that hundreds of thousands of men
will be called upon to give their lives.
Many more will come home with
manned bodies and minds damaged
beyond repair With such sacrifices as
these in prospect it is no time to be
talking of what the taxpayers can
comfortably contribute. They must
be prepared to pay taxes that hurt.
But the problem lies in writing
the tax bill SO that the burden will
be distributed with some approxima-
ton Of equity, and that is very
dlfflCult thing to do. Mr. Morgen-
thau IS asking for an additional
SlO,560 100000. The money unqueS-
tionably is available; the question is
how to reach those who have it with
out crushing those whose incomes
have remained relatively stable, or
have even declined since the begin
ming Of the war. This is the Job that
cOn1rOntS the members of the WAYS
and Means Committee, and it is a
job in which they are entitled to the
firm but sympathetic support of the
administration and of the people.
The treasury is looking to much
higher personal income taxes for the
greater part Of its new revenue, and
the story Of what has happened to
this levy in recent years is interest
ing. AS pointed out by Representa-
tive knutson Of Minnesota. personal
income taxes produced 1882 600 900
in 1910. 1t is estimated that the
revenue at current rates will be about
$4,000 100000, with some s7,OOOOO0,-
900 more to come from the new pro-
poSalS if they are adopted In other
words. since 1910, the revenue from
personal income taxes would have
risen by about $500 per cent.
Under the Treasury's plan. what
happens to the rich man, concerning
whom there has been so much dema-
gOguery? Take the case of the in
divdual with S500.0O0 net income.
After paying his Federal income tax
he would have S34 106 left. Then he
would have to pay half of the 25 per
cent due on his 1912 income tax. BY
the time he pays his insurance pre-
miums and other irreducible ex-
penses he would probably have to go
to the bank for a loan. Certainly
there would no longer be any juSti-
fication for CHASING him with the
idle rich"
But the rich man is not the only
one who is going to be hit hard if
the Treasury gets the money it
wants. 1t is estimated that national
income during the next fiscal year
will be about $157 100000, 900. OF
that total some $96,3O0 100000 will
go TO persons with incomes Of 50 900
year and less. 1t is this group that
has the bulk of the excess purchasing
power that Government officials talk
about, and this group, as we'll as
those with higher incomes, will have
to be reached if the new tax bill is
to have the desired revenue raising
and counterinfationary effects.
This is the nub of the highly COM
plicated and delicate problem facing
the Ways and Means Committee. If
the members can solve it equitably
on the basis of the Treasury's pro-
posals, well and good If not they
should, and probably will, go to a
combined sales and income tax.