Evening star., 1943-10-04
7 axes
Continued From First Page.)

Immediate service in diminishing
the threat of imitation. '''
If payroll taxes are increased, the
income taxes should at that time be
made substantially lower than I
have suggested to avoid an excessive
burden on the lower income groups" "
Previous Goal Reduced.
The tax program given Congress
represents $500 100000 reduction
from the previously voiced goal of
$4,000 100000. There already have
been signs at the Capitol, however,
that Congress was unlikely to vote
more than four or five billions ad-
ditional.
AT first glance" Secretary Nor
genthau told the committee, 'it may
seem that billion and a half less
than our original figure is not sub
stantial reduction; but all the re-
duction is in the individual income
tax and 1t amounts to great deal
in terms Of reduced burden on
any given individual or family"
Aside from a general discussion OF
the tax program, which Mr.. Nor
genthau said has the approval OF
the President of the United States,
the Secretary left to Randolph Paul
Treasury general counsel, the task
Of outlining specific means for
achieving the goals. Mr.. Paul was to
be the second witness.
Sees Simplifying Step.
Repeal of the Victory tax, Secre-
tary Morgenthau told the commit
tee, not only would be the first and
most important step toward tax
simpliflcation," but would Improve
the equity of the income tax system
in important respects"
Noting that the Victory tax now
allowed a fiat 1924 exemption, re-
gardless Of family size, Mr.. Nor
genthau testified:
While it does not seem desirable
simply to exempt wholly from taxa
ton all those now liable for Victory
tax, but not within present income
tax brackets, equity will be promoted
by repeating the Victory tax and
lowering present income tax exemp-
tions. BY lowering them to sl,10O,
for married persons, and $500 for
dependents, we would retain with
about the same tax burden those
tax payers now liable only for Vic
tory tax who are best able to bear
the burden of some income tax.
Would Relieve Many.
"At the same time we would re-
lieve 100000 hard pressed families
from tax on their incomes.
Repeal would not, of course. leave
these citizens untaXed They would
continue to pay heavy indirect taxes,
and most of them under existing law
will have their social security taxes
doubled next year"
Secretary Morgenthau said the
additional taxes will make it neces-
sary for people to take in their belts
but the cold hard facts of fiscal
necessity demand it. We know by
now that our willingness to spend
the necessary funds, no matter how
large, has had and will continue to
have a definite effect on the lives
OF our men in battle.
The money that is expended to
help our Allies keep the enemy en-
gagged on dozens of fronts all over
the world also saves untold lives
and helps shorten the war.
Considerations Weighed.
These things-equipment, medical
supplies, lease-lend and all the rest
have helped to build the war cost
to its present huge proportions, but
I am sure you will agree, and I am
sure the American people agree, that
it is worthwhile"
Secretary Morgenthau said the
tax program had been measured
against four considerations:
l. The ability of the plan to raise
money, and its effect on the infla-
ton program.
2. THE degree to which it might
interfere with war production.
3. The degree of hardship the
pAoA PAdSCu upOll pCOplC Will llheu
incomes and with fixed obligations,
and upon people with inadequate
incomes. and
4. Its practicability and cost
from the standpoint of its admin
istration."
Incomes Set at 152 Billion.
Mr.. Morgenthau said income pay
ments to individuals in the current
fiscal year were estimated at $751;
600, 100000 with only about $ss, ,000,-
100000 worth of goods and services
available. OF the remaining $685.
600 100000 he said personal taxes
would take s21 600, 100000 at present
rates, leaving about $4,000 900, 900
OF excess spending money"
The three war loans, toeether