Evening star., 1943-10-04

| al oiiS VI IiiC lol IlcSSco, IIlc w
pher on assignment for the war
quantities straight across any given
| income level
| We found this out very definitely
when we made actual observations
in the field. When we talked to
actual pecple-people who pay rent,
| feed their families and meet the
extra pills which wartime living sad
dies on them-We found that some
had ability to pay much heavier
! taxes, but that others earning the
same amount of money could not
! bear as heavy a burden.
Seeks $40, 500, 900. 900.
The amount of money we can take
by tax legislation cannot possibly
absorb enough. of our dangerous
dollars, but We must ask the people,
so that they may protect themselves
| from the injustice of inflationary
price rises. to do all they possibly
can. And while I think we should
not burden the American taxpayers
at this time with additional taxes
in so great an amount as $4,000, =
100000, l do believe that they can
pay. and will an additional total
OF sl0.500,0O0,O0
At first glance, it may seem that
ST 500 100000 less than our original
figure is not substantial reduction;
but all of the reduction is in the in
dividual income tax and it amounts
to a great deal in terms of reduced
burden on any given individual or
family.
The proposed schedule calls for
65 billions IN additional individual
| income taxes.
We realize that these additional
taxes. even in the reduced amount
Of 6.5 billions, will impose a heavy
burden on some taxpayers. You may
therefore wish to consider some
device for lessening the ultimate
impact Of the increased tax on the
| lower income groups.
One such device which we have
considered, and which I pass along
to YOU for your consideration is
provision for postwar refund of a
part of the tax
Such refund should benefit
principally the lower income groups
and might be in the range of be-
tween $4,000 100000 and $4,000 0O0.- =
900 of the s6,50O,00O 900 tax. If such
device should be used. it is sug-
gested that the taxpayer be permit
ted to purchase with his refund
/ credit a fully paid-up life insurance
/ policy. There should also be spe-
/ cial provision permitting the imme-
dlate use tor tax payment of any
postwar credit in cases where the
taxpayer S income has not increa 5ed
| substantially.
Must Simplify Law.
| AS a result Of our investigations
! among average Americans, there is
an important general recommended
ton that l want to make. 1t is
vitally important that every possible
step be taken to reduce the COM
| pllcatlons in our tax laws which
make 1t necessary for the TAXPAYER
to fill out complex and difficult tax
| forms.
The Victory tax confuses the tax
payers and makes impossible any
real simpliflcation Of tax forms. - =
l, therefore. recommend the repeal
OF the Victory tax as the first and
most important single step toward
tax simplihcation. =.
While il Hnec r,Nt coor, Ia
simply to exempt wholly from tax
alton all those now liable for Victory
tax. but not within present income
tax brackets. equity will be promoted
by repeating the Victory tax and
lowering present income tax ex-
emptions. BY lowering them to
Sl,l00 for married persons, and $500
for dependents, we would retain with
about the same tax burden, those
taxpayers now liable only for Victory
tax. who are best able to bear the
burden of some income tax. At the
same time we would relieve nine
million hard-pressed families from
tax on their incomes. -
In the interest of simplification
there is another recommendation
want to make again, as I did last
year. I urge the repeal of tile
earned income credit.
The elimination of the earned in
come credit would MAKE possible
the achievement Of further i'm
portant simplification through the
consolidation of the normal tax and
the surtax into one tax sched-
ule
A desirable change which would
further simplify filing and collection
procedure would be the withholding
OF taxes from wages and salaries at
graduated rates. Graduated with
holding could keep millions more OF
our taxpayers on strictly current
paid-up basis, by covering the full
liability in all brackets instead OF
just the first bracket, as at present
This would materially reduce the
number of persons required to file
troublesome declarations of esti-
mated tax. Recent discussions with
employers indicate that they believe
Withholding at graduated rates te
be desirable and entirely feasible.
Specific Tax Suggestions.
Let me tell you now about our
specific suggestions for the tax
program.
I am suggesting a program to in
crease Federal revenue collections