Detroit evening times. (Detroit, Mich) 1921-1958, 1943-11-27

The administration S case Tor increasing
the individual income tax by 6l2 billions was
based almost entirely on the alleged need for
absorbing through taxation the so-called excess
purchasing power of the people as means of
helping to combat the threat of imitation. The
treasury, however, in setting up its program,
completely ignored the fact such excess pur-
chasing power as may exist is not equally dis
tributed among all the people.
FURTHERMORE its sincerity in putting
i forward the anti-infation argument as a
justification for increased personal income
taxes became Immediately questionable when
it developed that its tax proposals were not
aimed at reaching this so-caed excess pur-
chasing power in the hands of those who are
known to enjoy the great bulk of it. Hence
even if enacted, the treasury tax program
would make little, if any, contribution to infa-
ton control.
= Corporation taxes-The bill makes no In
Z crease in the rate of tax of normal corpo-
rate profits which now stands at maximum
of 40 per cent, but does increase the excess
profits rate from 90 to 95 per cent, and makes
a reduction in the invested capital credit in
the case of larger corporations. The impact
of the proposed 95 per cent excess profits rate
as applied to smaller corporations is cushioned
to some extent by increasing the specific
exemption under the excess profits tax from
$4,000 to $4,000.
In our Joint statement issued at the outset
of the committees deliberations, we pointed
out that in view of the already high corporate
rates any drastic increase would threaten the
future sovency Of business and impair its
ability to provide peacetime jobs TO returning
- servieemen and unemployed war workers. fhe
retention of the maximum rate of 40 per cent
on normal corporate income is in accord with
our previously announced position.
L.
= in the rates or exemptions under the estate
and gift taxes The estate tax now reaches
maximum of II per cent, which is perhaps as
high as Congress can 60 without bordering on
actual confiscaton of property through taxa
ton which is policy that is totally foreign TO
fundamental American principles, although IT
has been embraced to considerable extent by
the present administration 1t must not be
forgotten that the states too make use OF this
form of taxation, and after all, they have sole
control under the American form of govern
ment, of the right of devolution Of property at
death
ASIDE FROM OTHER SHORTCOMINGS
OF THE PRESENT TAN SYSTEM, THERE
HAS IN RECENT YEARS GROWN UP A
TENDENCY TO USE TAXES FOR OTHER
THAN REVENUE PURPOSES.
UNDER THE PRESENT ADMINISTRA-
TON. THE TANNING POWER HAS BEEN
AVAILED OF FOR PUNITIVE PURPOSES,
FUN SOSIAI AMI
FOR EFFECTUATING OTHERWISE IN
CONSTITUTIONAL FEDERAL CONTROLS
OVER THE PEOPLE
This practice cannot be too severely con-
demned 1t is entirely contrary to the intent
and purpose of the Constitution in granting
Congress the power TO levy taxes solely for the
raising of revenue for the support of govern
ment.
VIZ HEN the war ends, Congress will be
w faced with the problem of financing a
postwar budget which may exceed $4,000 0OO,-
900 annually II is essential TO the maintenance
of sound fiscal policy, including national SOL
vency that federal revenues and expenditures
be brought into balance as soon as possible
THIS CAN ONLY BE DONE If THE Ma
TIONAL INCOME is MAINTAINED AT A
HIGH LEVEL.
The adoption of high tax policy will have
more to do than anything else with whether
that high level Of national income is main
tanned since the responsibility will rest pri-
marty on prfssse uusnit>s ffofase Tor its
realization.
GOVERNMENT SPENDING WILL NOT
DO. THE JOB But ON THE CONTRARY
WILL ONLY TAKE THE COUNTRY FUR
THEIR ALONG THE ROAD TO NATIONAL
BANKRUPTCY.
If a sound, healthy. and expanding national
economy is to be achieved, Congress must not
only permit American business to exist until
the war ends, but TT MUST PERMIT THE
SETTING ASIDE OF SUFFICIENT FUNDS
TO CARRY THROUGH THE RECONVER-
SION PERIOD
Moreover. if the many potential new indus
tries made possible by war developments are TO
become a reality, every encouragement must
be offered under our tax laws and other gov
eminent policies to so-caed venture capital.
AS no one knows when the day of peace