Milford chronicle., 1943-02-05
THE PAY.As.YOU.eO TAx PLAN

The new political psychology il
Washington furnishes evidence tha
4 Congress is recovering its place al
the Constitutional Legislative
branch of the Government, A montI
ago the pay-as-you-go tax plan was
being treated in Washington as 6
matter that might be taken uI
sometime this year." the idea be-
ing that it would be shelved until
after the war. But there has been
storm of protest against postpOn-
ing action and naturally the ques-
tion has been considered by mil
lions of people with small incomes
who will have to pay an income tax
this year for the first time Recent
polls of public opinion show that
most every class of our population
favor paying as they earn. The
other side of the picture is that II
they pay quarterly or semiannually
that the Treasury will lose vast
sums of money as taxpayers will
default because they will be unable
to pay under the old system.
Congressman Carlson fathers the
bill in the House which proposes
to set the income tax calendar
ahead one year, dropping the year
1912 for good. In other words, each
taxpayer would start the year with
a clean slate. Each would pay
during 1943 tax based on his cur
rent 1943 income, instead of a tax
based on his income for 1942. With
heavy income taxes reaching prac-
tically everyone. the farmer espec-
tally needs to be safeguarded
against income tax debts. The Ma
tional Grange and the Farm Bureau
Federation recently endorsed the
pay-as-you-gO tax plan. The inn
portance of this change to the
farmer is plain enough. Because
of all incomes, his is the most sub
ject to change from one year to the
next. OF all people, he can least
afford to be forever paying out Of
his current income a tax based on
the income he made the previous
year. The prices he receives change
sharply from year to year. Even in
a year of good prices, drought.
frost, or insect pests can destroy
his crops; and now, especially. a
labor shortage at harvest time can
leave his crops rotting in the field.
In 1912, millions of farmers
made some money for the first
time in years. In 1943. squeezed
between ceiling prices and rising
wages. they may not fare so well.
Yet under the present tax system,
they would still have to pay in
1943 tax based on their one good
year of 1912. Worse still, if farm
prices collapse after this war as
they did after the last, then the
present tax system would trap the
farmer in bitter earnest. For
while actually operating at a loss,
as he did after the last war, he
would still have to pay large,
leftover tax on his income for the
last war year. 1t is to end this
Overhanging menace of
tax debt that Congressman Carlson
has introduced his proposal. And
his measureJthOugh it
looks like tax magic at first glance
every practical test.
Though 1912 is dropped COM
pletely, the Treasury collects tax
as usual, starting March
Is; but under this new plan the
will be for taxes due on
1943 income. Nothing changes ex-
cept the date on the tax form!
No wealthy individual escapes
taxation. So long as his income
continues large, he continues to
pay large income taxes as at pres
ent. At his death. it is true, his |
estate will no longer owe a back !
income tax. But the estate will
be that much larger, and will pay a
correspondingly bigger Inheritance
tax.
1t is only by enacting the pay-as- /
plan now, that men entering |
The armed forces, or leaving busi-
ness positions to do government !
war work, can be freed from the |
present tax debt on their last years
civilian income. People whose
)eaceJlme occupations are destroy
ID by war such as small merchants.
illing stations, etc. would no
onger have their misfortune in
creased by owing back taxes. And
armers who have a poor year
would no longer face the added
problem of paying taxes on for
ner years good income.
Experts figure that pay-as-yOu-go
will mean more ,1943 revenue, be-
,ause the Treasury will start to
collect taxes this year on the vastly
national income and at
higher rates.
The time to get our income taxes
IN a current basis-the time to
emedy the tax calendar is recog-
Iized to be now. Otherwise, when
ietory comes, millions of farmers
nd workers struggling in the
ough waters of postwar readjust-
lent will be tossed-not life pre-
a large, heavy boulder
lcome tax debt.