Evening star., 1943-11-27

have al SOIllc way cdIIeQ Also CIle
antipathy of the Roosevelt admin
istration and the feud has been
carried on even during the war
when Americas production and
industrial machine has placed upon
management the biggest burden
and strain it has ever carried.
Nobody in America, irrespective
Of the size of his income and no
matter from what source his earn
ings come, will have more than s25,-
900 net income left after paying
taxes in 1914 and 1945.
This comes about through the re-
fusal of the Roosevelt administra-
ton to allow the so-called Ruml
plan to operate with respect to the
persons in the higher incomes. Con-
gress in its desire to get the Ruml
plan for the lower income groups
had to accept the double taxation
penalty for the higher incomes.
Pay rs Per Cent Penalty.
So the present law requires that
everybody else is put on a current
pay as you 60 basis except persons
In the higher salaried class. These
people pay penalty Of 25 per cent
of an extra years income tax and
they may pay it in two installments
Of 1212 per cent each, one during
1914 and one during 1945.
The Treasury view is that three
fourths Of the 1912 income tax has
been forgiven" and that the tax
payer is paying only the remaining
one-fourth of his 1912 liability. But
since income taxes were begun in
1913 after whole years income had
been received, the citizen has al
ways been year behind the calen-
OAR year in his payments. That was
the main argument for the Ruml
plan, which, in most instances,
meant no tax relief at all. Few
people who have had their 1912
taxes forgiven have been con-
scious Of it. Their estates may have
been relieved of an extra year of
taxes but this is not something they
will benefit by during their living
or earning years.
For some taxpayers the total Fed
eral income tax liability actually
exceeds his income. Anybody who
earns $l000,000 year gives it all
to the Federal and State Gov
ernment in 1914 and winds up with
S6,673 debt besides. If tax
payer lives in New York State for
instance, and is married and has no
dependents and has 100000 of tax
able income, he pays s77,636 of Fed
eral and State taxes and retains
s22, 1854. He is in better shape than
the man with $1,000,000 earnings.
Blow to Incentive.
just how all this is supposed to
provide incentive to the enterprising
individuals of the land, just how
they are going to be encouraged to
plan for the postwar period when
returning soldiers will be clamoring
for jobs and there will be little
reserve capital to start new enter
prises, except among the already
large businesses which are we'll
heeled financially, is difficult to con-
lecture. The monopolies benefit i'm
measurably.
Certainly there is little or no op-
portunity for man to accumulate
sufficient capital to go into business
for himself. The incentive is taken
away by the virtual conhscation of
incomes. The Administration has
had its way for 1914 and 1s45 and
nobody in America can have more
than $25,000 left irrespective of
what he earns-so the CIO conten-
tion that the war is producing mil
lionaires and that this is good
argument for breaking down the
Little Steel formula would seem
to be contradicted.
Radicalism, however, is running
Its course in America. The recent
elections show that the country Is
thoroughly displeased with the effort
to continue socialized reforms in the
midst of war. Unfortunately, how
ever, 1t is not merely the New
Deal which will be injured by the
policy, but this discomfort due to
unemployment and excessive Gov
ernment spending must inevitably
create isolationist votes which in
turn prevents us from having a