Evening star., 1943-05-27

ennss TT ndS 51' is l'a5; ea;- ~
cially admitted David Lawrence
that the bill which has been agreed
on by the Senate and House con-
fereeS will impose tax of S3000.-
100000 more than otherwise would
have been collected Hitherto. tax
increases have been obtained by a
revision of the rates. but this time
the administration has managed
to raise so much furore about an
alleged cancellation" that Congress
obligingly yielded to the double
payment scheme.
121, Per Cent Increase.
There was only one way by which
all duplicate payments could have
been avoided and that was by the
Ruml plan. AS matters stand now.
everybody has to pay an increase of
about 12'. per cert in taxes except
those with tax bills of $50 or less.
More than 26.000oOC returns. it is
believed, Will be affected by the
system of duplicate payments.
Maybe the device will not prove
as beneficial to the administration
as 1t supposeS. The Republicans and
antl-NeW Deal Democrats have been
left with the Ruml plan as an issue.
In the sense that the irritations and
protests to be piled up by the plan
for paying 25 per cent more taxes
In two years than otherwise would
have been paid will be reflected in
the voting next year.
lhe members Of Congress who
voted for the 1C0 rel cent elimination
OF the alleeed tax liability for 1912
will be in a better position at the
polls than the members who voted
all along only for abatement plans
of a partial nature.
Those members who fought un-
successfully for the 100 per cent
plan will, Of course. be compelled
to record themselves for the COM
promise just agreed on by the SEN
ate and House conferees because its
that plan or none at all.
The administration maneuvers
began with the proposal for with
holding tax. It was insisted that 20
per cent should be withheld, but the
big issue was whether the withhold
ing tax would be accompanied by
any readjustment of last Years in
come tax bill. It wa recognized that
a Withholding tax meant duplicate
payments.
The Treasury was always ready to
abate the tax payments on the
smaller incomes. partly for admin
istrative reasons and partly to pre-
vent the numerically large voting
groups from BEING irritatcd. But the
administration would rather have
abated all those 1912 taxes in the
lower brackets
The present plan is. therefore, not
as satisfactory to the administration
as scheme to discriminate between
taxpayers. The chance of increasing
taxes, however, to a vast number of
taxpayers will more than offset any
disadvantages to the Treasury This
was the real objective, and the ad-
miniStration attained it
There is a good deal of WiShful
thinking going on to the effect that
the placing of tax payments on a
current basis. together with the
duplicate payments on 25 per cent
for two years. will prevent the en-
actment of any new tax bills for two
years. This is soon to be disposed
of by Treasury requests for increased
taxes.
No More Retroactive Taxes.
One thing, however, is to be noted.
There will be no more retroactive
tax legislation for Individuals This
Is largely because they will be on
current basis on their payments and
will not owe the Treasury as they
did in the past. Congress will here
after find it necessary to enact tax
bills taking effect at future rather
than past dates. If Congress gives
the taxpayer the warning of only
three months, will that be enough?
Or will Congress fail to give not
more than a months warning?
Thnnph horatpfnro +l,,ro ,,,..
much hue and cry about retroactive
legislation, the fact is the taxpayer
usually had from the autumn of the
year until March Is of the following
year to make the necessary financial
arrangements to pay his taxes if he
did not have enough savings accum-
llated to meet the new levieS. Now
the taxpayer will have less warning.
September Is also will be as i'm
portant date this year as March
Is because self-employed and pro-
fessional men will find it necessary
to make return on September IS,
estimating their 1943 incomes and
make down payment of one-fourth.
plus a portion of the 1912 taxes that
were not eliminated by the latest
compromise plan.
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