Montana labor news., 1944-10-05

IN workers.
J Conveniently forgetting that the tax
favors granted to the wealthy by Hoover's
secretary of the Treasury, Andrew (Tax
Refund Mellon, did not avert crisis in
1929, all these plans omit to mention
any program for increasing the eonsum-
ing power of the masses, for adequate
unemployment compensation or for stab
liking production. They rely on "stra-
tegic" tax cuts to do the job they failed
to do in the 192Os.
Most reactiouary of the three plans is
the Twin Cities Plan, Postwar Taxes,
which, assuming a low national income
of $40 billion, calls for a SO sales tax
with no exemptions and attacks the
fdealistic" notion of basing the tax sys-
TEN on ability to pay.
Twin Cities, regarding SO unemploy-
ment as an ~irreducible minimum, de-
ponds on consumption taxes-which hit
the poor hardest-for S4 billion of tax
revenue, almost $50 of the total planned
tax receipts. This would hurt employ
ment by reducing mass spending power.
This plan faVors revision chat is,
downward Of graduated estate and gift
taxes.
Key to the Twin Cities plan is favorit-
ism to corporations and to niga personal
incomes on the plea that venture capt.
al" will be stimulated this way. How
venture capital can be made more ven
turesome when other taxes are cutting
into broad consumer markets is not
made clear. Nevertheless the plan calls
for repeal Of the excess profits tax, the
capital stock tax and removal Of present
tax penalties on holding companies.
Concentration of capital is clearly pro-
NOTED by these so-caIled reforms.
Another business group. the Commit
tee for Economic Development headed
by Pres. Paul G. Hoffman of ~studebaker
Corp, issues through its research depart
ment a Postwar Federal Tax Plan Tor
High Employment. This plan has some
praiseworthy features, but quite a few
jokers.
Continued large-scale unemployment
cannot be tolerated, - the CED says. But
the tax measures it proposes, with one
exception, are dubious roads to this fine
end. The one good proposal is tighten
ing sales and excise taxes which press
on mass consumption. The rest Of the
plan is a plea for tightening taxes on cor
porations and for reducing personal in
tax rates in upper brackets while
broadening the income tax base to in
clude 40 million families. The CED
promises the latter would be made
'acutely conscious Of their tax burden.
And so they would: incomes below $4,000
would yield ST. billion in income tax,
1894 billion-a fine contribution
to mass consuming power and full en-
ployment!
Reversing the approach of Twin Cities,
the CED declares it is taxes on corpora
tions, not persons, that inhibit the prof
it incentive Of the corporate managers"
They would repeal the corporate excess
profits tax, reduce the corporate income
tax to 1879 to 2O% and charge the divi-
dend receiver only with the surtax on
his income. But if he chose to keep his
money in the corporation he could avoid
high surtaxes without any recourse by
5he government.
The whole argument that presents
corporate taxes represent double taxa
lion for the stakeholder who also pays
personal income taxes is refuted by the
JED itself. The plan states that present
corporate taxes are passed on to work
RS in lowered wages, consumers in high
IT prices, stockholders in reduced divi-
lends. But there is no guarantee that
reductions would be passed on in the
manner. For the company might
simply retain the saved money as a
hoard instead Of spending it on new in
'estment, wages, etc. Logically, then
he CED should urge a tax on undis-
profits-a suggestion conspicu-
absent.
Most progressive in general tone is the
3~eardsley Ruml-H. C. Some plan writ
en- for the National Planning associa-
ion. But it relies chilly on tax reduc-
ions to bring about stable high employ
lent. It favOrs replacement Of the cor
.orate income tax by a small franchise
AK Of SO (Which would hit small busi-
ess harder) and reduction in the pro-
incomel tax with a rate ceiling
f 500 at an income Of 5000, 900.