Evening star., 1943-05-19

ment, together ~
with some one David Lawrence.
sided advice from those who op-
posed the Ruml plan, and that he
issued the statement without really
looking into the matter or finding
out what the sentiment of the coun-
try or OF Congress really is on the
subject.
For when the President says there
is a cancellation or forgiveness of
1912 taxes, is he really stating the
case~ as it has developed over the
years? When the Ruml plan is re-
ferred to, for instance, as a Skip
a year" plan, the question may well
be asked, What year is being
skipped?"
The fact is that the present in
come tax system started in 1918. The
amendment to the Federal Constitu-
ton was adopted in 1913, and the
law was passed In October, 1918.
An examination Of the debates at
that time will reveal that some
members OF Congress raised the
point that it was unfair to put tax
on income for the year 1913 since
most OF the year had passed and
there was no opportunity for the
taxpayer to accumulate the taxes
r,,Yt If 1o13 sorpinoz
"Yardstick" for 1914.
The answer was made in the
debate that taxes were not really
being paid on the year 1913 but that
1913 was being used as q yardstick
to measure 1914 income taxes. If
that reasoning had been followed
thereafter In the wording OF tax
legislation, the controversy over the
Ruml plan today would be academic
Actually If the payments on the
years from 1918 through 1912 were
properly audited in accordance with
the reasoning of the members of
Congress at the time the first law
was passed, there would be no prob
lem Of cancellation or forgiveness. !"
II there Is any forgiving to be
done, it should be directed to the
Federal Government which has all
along committed the error of charg-
ing the citizens an extra year OF
taxes. The Ruml plan would pre-
sumably remedy the error and put
the citizens on current basis as
originally intended.
Not a 'Windfall"
What has been called "windfall"
through cancellation Is really the op-
posite. If the Government finally
by law determines that 1913 pay
ments already made apply to 1943
incomes, then the citizen is really
being permitted to retain his own
property or that portion of it to
which the Treasury was never
morally entitled.
Many Of those who argue against
the Ruml plan speak Of it as giving
= windfall to taxpayers who have
big incomes. The assumption Is
that taxpayers have laid aside ahead
Of time out of their 1912 incomes
an Of the tax money they are sup
posed to pay throughout 1943, when,
rs q matter Of fact. most people pay
io47 taxes out Of earnings received
currently throughout the year s1943.
That's how the income tax system
developed beginning in 1918. If
taxpayers with big incomes have
actually saved out Of their 1912 in
comes enough for 1943 taxes the Ad-
ninistration by its plan really in
tends to confiscate that property by
means Of a capital levy.
Countries hard pressed for funds
and usually on the verge Of bank
ruptcy find 1t necessary to resort to
conflscation Of capital known as a
capital levy. There is no such need
IN America today. In fact, the
Senate bill referred to as a modifi-
cation OF the Ruml- Carlson bill
actually brings into the Treasury
during 1943 $4,000, ,0O0, 900 more cash
than would otherwise be collected.
Double Tax Apparent Goal.
The President is apparently hold
Ing out for a bill that would bring
on double taxation and cause
vast number of taxpayers to pay out
Of their 1943 incomes not only the
current 1943 obligation but a sub
stantial portion of the taxes al
legedly due for 1912
Mr.. Roosevelt has not thought
through the implications of the
statement in which he says that
there would be a cancellation Of
taxes. Any citizen who pays his
1912 tax bill out Of 1s43 earnings
will not find that he has skipped a
year or gotten any cancellation. But
Il Mr.. Roosevelt has his way the
withholding tax will double up the
taxes on many taxpayers and put
their personal finances into a cha
otic condition in the midst OF war.
The only explanation for the
Presidents program is that it is the
advice Of his lieutenants who feel