Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-02-04

hips were sunk by the British
come from one or another cause
Even If as few as 3 per cent were
so affected, this would mean more
than a million taxpayers in trouble
because Of income-tax debt
With the new high tax rates, Mr.
Ruml declared, income tax debt be.
comes IAN intolerable hardship. wip.
ing out savings that have been &C.
cumulated over the years"
1.-THE American citizen distinctl,
does not like to have a large debt
particularly large tax debt, hang.
ing over him." he added.
Referring to a Treasury study O,
the ACCESSIBILITY of deferring o.
spreading over period of time par,
Of the liability due on 1912 incom.
while at the same time collecting
currently on 1943 income. Mr.. Rum
said no current collection program
could be- applied at the rates neces.
cry as long as the 1942 tax debt /.
simultaneously payable.
Asks Revision Of System.
THE present system is bad sys-
tenn for all Of us, and it should and
can be corrected" he declared. 1T
Is clear that the Government can
not continue for long to be the
creditor of some 80 1000 900 taxpay-
ers and their families in debt for
income tax. particularly when there
is no question of revenue involved
In assessing this years tax on this
years income and getting the whole
country on current pay-as-you-go
basis"
The answer to the problem oil
switching to q current collection
basis, he continued, lis as simple a.
daylight saving.
Let us turn our tax clocks ahead
one year. The taxes we have paid
last year out Of our 1912 income are
taxes assessed on our incomes re.
ceived In 1871. We can best solve
the problem now by beginning
1913 by paying on 1943, thereby
dropping out the year 1912 as veal
Of assessment from the tax calen.
dar forever"
He emphasized that "the essence
Of the plan is making change 1r
the method Of assessment for per-
sonal income tax" the change being
to assess 1943 taxes against 1914:
income instead of 1912 income.
Two Compromise Plans.
Mr.. Ruml also was confronted
with two compromise proposals on
tax abatement:
l. That the 1912 tax clock be
turned back to 194l in putting 1913
collections on current time. Given
serious consideration" by the
Treasury. this plan proposes the
collection Of 1912 taxes by the much
softer rates and exemptions OF
194l, thus erasing or having last
years obligations for millions OF
persons, although many also would
experience doubling-up by having
to pay of the 1912 obligation while
at the same time renting 1913
taxes (at present rates. on a cur
rent, earnings-dedvction basis.
2. The proposal by Representative
Robertson, Democrat, Of Virginia,
Ways and Means member, that the
s per cent normal and Is per cent
first bracket surtax be forgiven for
small and large income groups
alike. This would wipe out entirely
the 1912 tax obligations for the mil
lions of persons with taxable in
comes Of less than $4,000.
Mr.. Ruml presented his plan to the
Senate Finance Committee last year
but the group rejected it by top
heavy vote. The plan now embraced
In a House bill by Representative
Carlson, Republican, OF Kansas /.
claimed by its proponents to have
gained advocates since then.
Affects Salaries Under $4,000.
Reverting to 1941 rates and exemp.
tons would have its biggest effec,
on the millions of persons whose
income In 1912 was less than 10000
Many Of these persons would fine
their 1912 tax liability wiped out
altogether, while the liability O,
others would be halved. The obliga.
tons of those in the higher bracket.
would also be reduced, to a lesser
extent.
| The rate on 194l income was 1
per cent normal tax and 6 per CEN
IN the first surtax bracket. Congress.
raised these to 8 and Is per cen,
respectively, effective on 1912 in.
come.
At the same time, Congress low.
cred the basic exemptions from $75(
to $500 for single persons and from
1,500 to 81 200 for heads of families
It was estimated that this actor
extended income taxes to reach T..
100000 lower-paid workers. Thes,
would be relieved OF all Federal ia,
liability on 1912 income by adoption
OF the idea mentioned by Chairma,
Doughton and Mr.. Paul.
Little Change in Upper Brackets.
On upper bracket incomes. tn,
change would not be OF large eifec
since rates there already were S,
high that Congress advanced then
less proportionately than on lowe
incomes when writing the 1912 Ia,
legislation.
To the salaried man in $1,000 an,
similar classes, the tax outlook woul,
shape up in this fashion:
From his 1943 income would h
deducted 10 per cent, after basi
exemptions, to put his l943 taxes O,
current basis. The S per cen
Victory tax also would be deducted
In addition, he would have to pa,
10 per cent of his 1912 income. ate
slightly higher deductions. Thes
latter payments might possibly b
spread over more than one year.
During yesterdays committee SEES
sion, Representative Dingell, Demo
crat, of Michigan inquired wher
the most pressure" was comm,
from to remit all of the 1912 take
as proposed under the Ruml plan
Mr., Paul replied.