Evening star., 1943-01-26
BY GOULD LINCOLN.


day of reckoning with the in
ternal revenue collector of Uncle
Sam-swiftly approaching, mem
bers of Congress and the Ameri-
can people are giving more and
more anxious thought to a pay
as-you-go program for the pay
ment of internal revenue taxes.
These taxes will touch millions
more people, and more heavily,
than ever before in the 80 years
life of the income tax system.
The income tax payers in the
past have been in the habit of
meeting "last years taxes" out
of this years income Those
who will pay taxes for the first
time this year, many of them,
have been planning to do the
same thing. But the income
taxes which must be paid this
year-on last years income-will
reach high proportions. In ad-
dition, the Government has al
ready started a pay-as-you-go
program for the collection of the
so-called Victory taxa per
cent tax on gross incomes, with
S624 exemption only. 1t is COM
ing out now from every salary
check and pay envelope.
In other words, part of 1943
taxes have already been added to
the taxes on the 1912 income. to
be paid for in the present calen-
dar year.
To shift over to a pay-as-you-
go program Of income tax pay
ment, unless some drastic action
is taken, will mean payment of
two years taxes in one. The dras-
tic action must take some such
shape as the Ruml plan-which
means forgetting taxes on the in
come derived In the calender
year 1942-at least for the
present.
Clark Supports Plan.
Senator Bennett Clark of Mis-
souri,, a Democratic member of
the Senate Finance Committee,
which handles tax legislation,
last year proposed the adoption
Of such a plan-similar to the
Ruml plan with some modifica-
tions of his own. He stands
ready to support program of
this kind again when a revenue
bill reaches the Senate. Under
the Constitution revenue-raising
measures must originate in the
House. Furthermore, Senator
Clark favors tacking on to the
plan payment of the tax at the
source-as the Victory tax is now
paid.
1t is true that if a taxpayer
does not make or receive as much
income this year as he did in the
last his tax payments will be less
than under the old system. On
the other hand, however, if tax
payer makes more money this
year or receives more income
than he did last, his tax pay
ments will be higher. The re-
ceipts from the latter may we'll
offset or surpass the tax pay
ments of the former. In such an
adjustment there are bound to
be inequalities and some injus-
tice. Senator Clark is confident
that in the end the Government
will suffer no real loss of revenue
If his plan is adopted. Indeed,
he is convinced the reverse will
happen.
The benefit to the taxpayers,
in his opinion and that of many
others, will be found in the easier
method of payment, with taxes
coming out of the income as it
comes in. There is fear that if
some such step is not taken a very
considerable number of taxpayers
will be unable to meet the pay
ments as they fall due, under the
old system, and will be in de-
fault. After all, the proof of any
system of revenue raising lies in
the ability to collect the revenue.
SO 1t Is expected that the Ways
and Means Committee of the
House, which has first to tackle
the Job of shaping revenue legis-