Evening star., 1944-02-22
Text of Presidents Tax Bill Message
Lists Many Faults He Finds in Revenue Measure;
Says Purported Income Would Not Be Raised

The tert of President Roose-
Delt's message to the House peto-
ing the neiD tar bill folloDs.:
To the House of Representatives:
I return herewith, without my ap-
proval, H. R. 3687, entitled "An act
to provide revenue, and for other
purposes.
I regret that I find it necessary
in the midst of this great war to be
compelled to do this in what I re-
gard as the public interest.
Many months ago, after careful
examination of the finances of the
Nation, I asked the Congress for
legislation to raise S10,500, ,000, ,O0O
over and above the existing revenue
system Since then persons prom
inent in our national life have stated
in no uncertain terms that my figure
was too low.
The measure before me purports
to increase the national revenue by
a little over $4,000, ,0OO, ,OOO Actually
however, the bill in it's net results
will enrich the Treasury by less thar
81 900 ,00O, 900.
AS a tax bill, therefore, am COM
PEELED to decide that it is wholly in
effective toward that end
More specifically. the bill purports
to provide s2,100 900 900 in new rev.
enues. At the same time it cancels
out automatic increases in the So
cial security tax which would yield
81 00,000,000. In addition, it grants
relief from existing taxes which
would cost the Treasury at least
$50. 900 900 and possibly much more
In this respect it is not a tax bill
but a tax relief bill providing relief
not for the needy, but for the greedy
POstpOnement Unwise.
The elimination of automatic in
creases provided in the social Sc
curity law comes at a time when
industry and labor are best able to
adjust themselves to such increases
These automatic increases are re-
quired to meet the claims that are
being built up against the social
security fund. Such postponement
does not seem wise.
The clause relating to renegoti-
ating of war contracts terminates
the present renegotiation authority
on December 81 of this year. This
seems unwise at this time because
no person can at present determine
what a renegotiation time limit
should be. More experience is need
ed, The formal right of appeal to
the tax court that is granted bv
this bill is an inept provision. The
present tax court exists for wholly
different purpose and does not have
the personnel or the time to assume
this heavy load.
The bill Is replete with provisions
which not only afford indefensible
special privileges to favored groups
but sets dangerous precedents for
the future. This tendency toward
the embodiment of special privileges
IN our legislation is in itself Slf-
nclently dangerous to counterbal-
ance the loss of very inadequate
sum in additional revenues.
Lists Privileges.
Among these special privileges are
ta) Permission for corporation:
reorganized in bankruptcy to retair
the high excess profits credit ane
depreciation basis attributable tt
the contributions of stockholder.
who are usually eliminated in tn.
reorganization. This privilege in,
ures to the benefit of bondholder,
who, in many cases, have purchased
their bonds in the speculative mar.
ket for far less than their fac,
value. 1t may open the door tt
further windfall profits in this mar
ket because Of the undeserved bene.
fit received by reorganized corpora
tions.
(b) Percentage depletion allow.
ances. questionable in any case. ar,
now extended to such minerals a!
vermiculite, potash, feldspar. mica
tale, lepidolite, barite and spodu
meme. In the case of some of these
minerals the War Production Boare
refused to certify that current out.
put was inadequate for war needs.
&c, The lumber industry is per.
mitted to treat income from thu
cutting of timber, including selec.