Evening star., 1944-02-23
An Unwise Veto

an adequate measure under exist
ing wartime conditions. 1t fell short
of raising the revenue which the
people Of this country could reason
ably afford to contribute. But the
President does not rest his case on
that fact. He advances other rea-
sons which are open to question and
states them in language which will
create resentment rather than a
desire to enact satisfactory meas
ure. From that point of view, it
seems clear that the veto was un-
wise.
The bill was vetoed over the ad-
vice Of administration leaders in
Congress. At no time during his
consideration Of the measure did the
President consult with either Chair
man Doughton of the House Ways
and Means Committee or Chairman
George of the Senate Finance Com
mittee. In other words, the Presi-
dent condemned the bill without
granting hearing to its principal
authors, both members Of his own
party.
The President complains that the
bill "purports" to increase revenue
by a little over $1,000 900, ,000." Ac-
tually that total would be about
$4,000, ,000, ,000-most of which will be
lost If the veto is sustained. The
original administration proposals
called for $1O,5OO,O0O,0OO. But ap-
proximately $4,000, 900, 900 of that
would have been added to the
burden of those already paying in
come taxes. The President de-
nounces Congress for retaining the
victory tax for fear OF dropping from
the tax rolls those taxpayers who
are at the bottom OF the scales, while
at the same time granting ex-
tensive concessions" to special in
terest groups. He neglects to say
that the abandonment of the victory
tax. which was included in the ad-
ministration proposals, would have
relieved some 100000 taxpayers of
any obligation. Nor does he say
that the administration proposals,
when they came before the Ways
and Means Committee. were re-
jected by unanimous vote of that
group.
Mr.. Roosevelt says that the bill
grants relief from existing taxes
which would cost the Treasury at
least $150,000,00 Then he goes on
to enumerate some of the special
privileges" which this would confer
three or four minor instances
which do not involve any great
amounts Of revenue and against
which the administration certainly
made no conspicuous fight when the
bill was going through Congress.
Perhaps these things will cost the
Treasury $150,OO0,0O0. But what
about the $600.000.00O which will be
lost as result of the veto through
retention of the earned income
credit? And while on the subject
of special privileges, what about the
$500,000,000 which the Treasury will
lose through defeat of the increased
excess profits tax? The Presidents
veto, not Congress, is responsible for
this.
The President argues. in effect,
that the Treasury will not lose the
full amount Of the new taxes since
it will gain about $1,100,00O, 900
through the veto's notification of
the Social Security tax freeze. But
this is not an entirely valid con-
tention. In the first place, the
proceeds from the Social Security
tax are not an offset to normal reve-
nue.. If the Treasury gets $1,1OO,-
100000 from higher Social Security
taxes it must deposit Government
bonds in the Social Security trust
account before it can use the money.
In effect. this will be borrowed
money; not tax revenue in any
realistic sense of the term. Sec
ondly, employers deduct Social Sc
curity taxes before computing their
income taxes. Many of these en-
ployers today are subject to the
highest excess profits tax. The re-
suit is that the Government will lose
in income taxes much of what it
collects in Social Security taxes.
But this is a fact which the Presi-
dent ignores.
Other things might be mentioned,
such as the surprising attempt to
saddle Congress with full blame for
the complexity of tax forms, when
the Treasury certainly shares this
responsibility What is the Presi-
dents stand on the bills provision
requiring labor unions to file tax
reports? This was strongly opposed
in Congress by labor spokesmen and
the Presidents veto kills 1t. But his
message Is silent on the point. Is
he for it or against it? Although
firmly opposing a general sales tax,
Mr.. Roosevelt tells Congress he will
approve higher excise taxes, which
are nothing more than selective
sales taxes. Yet these would pro-
duce relatively little revenue and
he proposes nothing new to raise
the revenue which he says should
be secured.