Evening star., 1943-10-04

raised through an increase in estate
and gift taxes, corporation taxes,
selected excise taxes, and individual
income taxes.
Estate and gift taxes:
Estate taxes have been a part of
our Federal tax structure since 1916,
but the total contribution has been
unduly small. In this period ahead
when great additional revenue is
necessary. estate taxpayers should
contribute as heavily as possible to
the cost of the war along with other
groups of taxpayers. I am suggest
ing that the exemption for estate
taxes be reduced from 100000 to
100000; that estate and gift tax
rates be increased throughout the
scale BY so doing, we can raise an
additional s400,000,000 on a full
years basis.
Corporation taxes:
1t is recommended that corpora
ton taxes be increased. Despite
heavy increases in taxes, net corpora
ton income after taxes has risen
SAShLAN 4Coo hAttl Poy AlS
dividends, corporations will have
added to their capital out of earnings
an estimated $1,000 100000 during
the three years of 194l, 1912 and
l943. We therefore recommend that
corporation taxes in general be
raised, but that small corporations
should be given special favorable
ty,,n NIol,y1a ir,or
ing corporation taxes has been
worked out along this line and will
raise an additional IL billion dollars.
Other Increases Proposed.
Excise taxes:
1t is the belief of the Treasury
Department that an increase in ex-
else tax rates has much to commend
it as means of raising additional
money during war period. Little
or no increase in administrative ma
chinery is required. Items can be
selected which need to be conserved
for war purposes and additional
taxes can be placed on such items
of expenditure as liquor and tobacco.
The tax rates that we are suggesting
have been fitted to the wartime con-
ditions of supply and demand for
each item separately Under the
schedule which we will present to
you in detail, we can raise an addi-
tional s2,50O000,00O through in
creases in present excise tax rates,
and through two new eXcises
The tax increases just suggested
the added estate and gift taxes Of
s4OO 900 900. the new corporation
taxes of IL billion dollars and the
increased eXcises of 25 billions, add
up to total of $4,000 100000.
I am suggesting increases in in
dividual income taxes to yield 6.5
billion dollars. In planning a sched-
ule to raise this 65 billions in ad-
ditional income taxes, we have
merged the Victory tax into the
income tax AS l have Indicated.
the exemptions suggested are $500
for single persons, $ll00 for mar
ried persons and $500 for each
dependent.
The total amount of Victory tax
paid by the nine million people who
will thus be relieved of paying any
Federal income tax is 100000, 900.
all of which has been redistributed
and absorbed in our proposed
schedule.
How Income Plan Works.
I should like to take moment
now to tell you exactly how this
proposed income tax schedule will
work in actual practice.
Take, for example. married per-
son with two dependents. Under
the present law, the income tax eX-
emption would amount to 81 900, and
the Victory tax exemption would
usually amount to 1924. Under the
proposal there would be one ex-
emption amounting to sl,700.
Such a person having net in
come of a thousand dollars a year
will pay a gross tax under the pres
ent law of s25, of which sl1 is his
refundable Victory tax credit. Un-
der the new proposal. he will not be
required to pay any tax at all.
If such a person is earning $4,000
year. he is now paying a gross tax
of $327, of which $50 is his Victory
tax credit. Under the new proposal,
he would pay 1884, or s57 more than
his present gross tax.
A married person with two de-
pendents earning $4,000 a year is
now paying total of $l,735. of
which $182 is his Victory tax credit.
Under the present proposal he
would pay $2,523, or S7S8 more than
his present gross tax.
At $4,000 per year, a married per-
son with two dependents is now
paying $l0,l7l, of which $597 is his
Victory tax credit Under the new
proposal he would pay $13,750, or
$3.50 more than his present gross
tax
1t is my belief that the suggestion
that I have just made constitute a
program as equitable as could be
suggested to attain the results we
desire.
To Last Through War Period.
All of the tax increases I have
mentioned are suggested as parts of
war program to be effective only
until date following the termina-
ton of the war to be fixed by Con-
gress.
Statement of social security:
There Is one further suggestion I