Evening star., 1943-03-29

"SVIIiS lux TOStS
Reader Argues for New Plan
On 'Poy-os- You-Go' Principle
With Levy on Savings
To the Editor of The Star:
Out of the whirlpool of confused
charges, countercharges, slogans and
battle cries on the subject Of personal
income tax payments, certain things
seem to be matters of fact If these can
be listed, it should be possible to draw up
a reasonably simple solution to cover
the requirements of the Treasury and
simultaneously make the tax collection
process administratively feasible.
The first personal income tax was in
augurated at the end of 1913 with the
| initial payment due March IS, 1914 The
amount of that first payment was based
on the income received by the taxpayer
during the year 1913. Two things thus
should be clear beyond any sincere or
honest question. The first of these is
the fact that no tax was due" and that
no debt was incurred by the taxpayer
to the Treasury in the year 1918, for
obviously no debts are ever incurred
retroactively. The second point is that
the income earned in 1913 merely served
as a basis for figuring the personal in
come tax collection which the Govern
ment made in 1914. That basis might
equally well have been the 1910 income
or the estimated income for 1914 or any
other figure which would serve as basis
for tax calculation. The previous years
actual income was simply the most con-
venient and easily determined figure to
use as basis.
The next point is the fact that current
rates for personal income tax payment
are so much higher than ever before
and there are ever so many more tax
payers that real administrative prob
lem presents itself in the mechanical
means of collecting the tax.
The high current rates referred to
furthermore will create definite prob
lens of administration" for the in
dividual taxpayer in getting together
sufficient money to meet the quarterly
installments.
Certain people, largely in the higher
income brackets, have arranged to set
aside sufficient money to meet current
income tax payments this year, just as
they always have in the past. In terms
OF number of persons, these are un-
doubtedly very small minority
11x, te&o
whole situation is the extreme necessity
for high income tax payments not only
this year but apparently for some years
to come, because of our involvement in
the war. This means that every con-
ceivable tax dollar must be collected.
The second and third facts of the four
listed above can be covered by a collec-
ton at the source. Whether this is
called withholding tax" or "pay-as-
you-go tax" Is entirely immaterial. The
salient point is the payment or deduc-
ton at the source.
Thereby, obviously, the administrative
difficulties for both the Government and
the taxpayer are simplif1ed. The Gov
ernment has the assurance of regular
collections at the source and the tax
payer does not have to worry about say
ing to meet specific payments.
All personal income taxpayers, large
and small, would thus be put on exactly
the same basis of payment, and under
any given schedule of rates would have
to pay the same amounts through COL
OF na
by the old method.
So far, everything is taken care of by
a pay-as-you-go plan except for the
savings of the relatively few individuals
who provided in advance for current in
come tax payments. These savings seem
to disturb some of the Treasury folks and
some Of the men on Capitol Hill Ap-
| parently, the entire muddle and mess is
| due to the attempt to confuse the in
| come tax problem as such with the de-
sire or even the necessity for levying a
| tax on such savings as there may be-
| That seems to be the fundamental diff
| Guilty.
Now then, granted we need every dollar
of tax payment we possibly can collect,
it seems about time to face the issue
squarely and call spade a spade" as
we loudly proclaim that we always do
| (and never do).
The answer appears to be simply this:
No. COLLECT the income tax at the
| source, beginning July ! and continue
thereafter forevermore.
No. ENACT special tax on savings
| over certain minimum amount so that
those fabulous sums" which presum-
ably have been saved up to pay taxes
will really be caught.
In other words, if we are going to make
capital levy, let's make it and say so,
| but for heavens sake let's quit trying to
camouflage that step by cooking up a
| complicated dodge which we call an in
| come tax to hide it!
HERBERT WACHSMANN,
Report Of War Stamp Sale
BY Newspaper Carrier Challenged.