Evening star., 1943-10-07
"Soundest" Tax Proposal
Advocated as "ReduCtion."

To the Editor OF The Star:
Ore Of the sanest tax suggestions to
come out Of Washington since the start
Of the war is the suggestion that the
Withholding tax be increased to 80 per
cent with provisions for refunding l3
per cent of the total payments.
According to the information given by
Rodney CroWther. in the Baltimore Sun,
the Treasury claims that 1t had no part
in making the suggestion and Repre-
sentative Doughton says that he doesn't
know where the idea came from.
Regardless Of where the idea came
from it is the soundest tax proposal
yet made in Washington and certainly
deserves the backing of all three gov
ernmental agencies dealing with taxes.
They should all get behind it and put
it into effect at the earliest possible
time. In fact, it should have been put
into effect at least a year ago.
Senator George, again according to
Mr.. Crowther, said that the proposal
wasn't a tax at all, but a form OF en-
forced savings That is exactly what it
would be and exactly what We have
needed for long time. Senator George
is also credited with saying that such an
increase is rather steep.
There can be no question but that
such an increase would be steep if it
were a tax, in fact; if it were a tax. it
would be placing intolerable burdens
upon the loWer-income groups. But it
isn't tax and the proposal to refund
not only the entire amount Of the in
crease but an extra per cent of what
is now being paid actually makes it tax
reduction and lessening of the tax
burden upon these groups.
At the present time the withholding
tax is part Of the general income tax
and as such takes into consideration
the number of dependents which the
taxpayer has. The withholding tax also
applies only to that portion Of the in
come above $3.50 week
AS the present proposal isn't a tax at
ALL it should apply to the entire amount
of wages, though it could still retain the
$3.50 minimum below which it would
not apply at all. 1t should apply to all
workers alike regardless of the number
of dependents.
There would be some grumbling; that
Is to be expected. But this is a year
that we do not have a Congressional
election and so the legislators would not
have to worry about its immediate po-
litlcal effect. BY the time another year
has rolled around most people would
recognize it for what it is; for truly, if
there were ever blessing in disguise,
this would be one.
For many who would be paving this
refundable tax, it would be the first
time in their lives that they would be
saving any substantial amount of money.
At the very time the Government would
be refunding the money many probably
would be wishing that they had actually
been forced to save more of the money
they had been making during the war.
Inc economic effect of the enforced
saving would make the Government
JOB OF keeping prices in line and Destroy
ing the black markets immeasurably
easier and much more effective. 1t
would help close the inflationary gap
and help prevent imitation.
Inc economic effect of the proposal
IN the postwar period would be to in
crease the amount of money available
Tor goods at a time when we would be
facing serious shortage of such money
and when we would be facing deflation
instead of facing imitation as we are at
the present time.
The fact that no one in Washington
l. willing to assume responsibility for