Evening star., 1943-05-05

what opponents David Lawrence.
called the Ruml plan when, by an
other close vote, it was defeated
last month-there Is something live
about the idea, and more will be
heard from it. If the Senate ap-
proves it and the conference COM
mittee deletes 1t, the issue will 60
to the country. 1t will be heard
from in the 1914 campaign.
The reason why the Ruml plan
has gained popularity is not be-
cause 1t presents a windfall or
abatement for anybody, but because
the public is against the Treasurys
ineptitude in epdeavoring to make
the taxpayers pay penalty in Or
der to get on current pay-as-you-
so basis.
The Forand bill, which has passed
the House. was supported finally for
parliamentary reasons by many
members who really wanted the
Ruml plan, but since. under the
Constitution, all revenue legislation
must originate in the House. 1t was
the only way the issue could be
sent over to the Senate and bill
written that could be revised in
conference.
Tax Habits Are Factor.
The question which stirred the
House was whether the Ruml plan
does or does not mean any actual
saving of money for anybody. The
answer depends on whether the tax
payer has been in the habit of
laying aside currently enough money
to pay taxes on the current CAL
endar years income. Some thrifty
persons do this-unfortunately, too
few-but if one believes the oppo-
nents of the Ruml plan. every cit
izen has in his savings account
throughout the current year the
money to pay the years taxes.
Much nearer reality is the opposite
situation. Most taxpayers pay this
years taxes out Of next years in
come. They do not set aside a
reserve, as do corporations, though
they should.
The advocates Of the Ruml plan
recognize facts and human nature.
They declare that most citizens are
paving last years taxes out of this
years income and that if with
holding tax is to be required after
July it will mean double alton
for the second half of this year
This will mean forcing citizens to
borrow large sums or it will take out
of the hands Of many citizens the
funds that would be used to buy war
bonds. 1t will absorb their surplus
altogether.
Forand Bill Not Sufficient.
The Forand bill wipes out the 6
per cent normal tax and first 13
points of the surtsx for 1912, but it
still leaves the taxpayers who pay
the bulk Of the income taxes in the
position of being able to pay this
years taxes only out of next years
income. 1t doesn't accomplish pay
as-you-go for everybody. and that's
one reason why an attempt will be
made in the Senate to devise a real
pay-as-yougo plan.
There is one proposal, often re-
ferred to heretofore in this column,
which would put everybody on a
current basis on July l considering
all payments already made in
March, l943, and those to be made
In June. 1943, as applicable to ls43
taxes and allowing the 1912 taxes to
be spread over a given number of
years without interest but with a
substantial discount for anticipating
the postponed payments.
Anyone with credit at a bank
should be able to gain the discount
by borrowing to pay the 1912 taxes.
Those who have no borrowing ca
pacity now would doubtless be able.
over the deferred period to meet the
l942 bill.
ForEives Nothing.
In this way there is no forgiveness
for anybody but a current basis for
all and a spreading or deferring OF