Detroit evening times. (Detroit, Mich) 1921-1958, 1944-07-18
Retreat From
Squandernaniia
By M. S. RUKEYSER


THE political genius of the self governing
American people has been demonstrated time
and again in developing antibOdies for govern
mental abuses.
There is already fortunately, under way
grass roots movement to redefine the congress
sonal right to tax and to put end to the current
tendency to destroy the taxpayer
When the sixteenth amendment authorizing
federal income tax was under consideration, its
sponsors talked modestly in terms of a per cent
imp0St
IN PROTEST against rates running up to 80 per
l cent 16 state legislatures have since 1899 passed
resolutions asking Congress to call convention OF
representatives of the several states to consider
constitutional amendment to put 25 per cent
peacetime ceiling on federal income tax rates
When and if 16 more states take similar ac
tion-and in 1915, legislatures in 40 states are
scheduled to be in session-then action by Con-
gress will be mandatory
Unless there is limit on federal greed, then
the independent financial status of the states will
be threatened and the welbeing Of citizens will be
placed in jeopardy.
rate, does not necessarily shrink revenues. IN
CENTIvE TAXATION ENLARGES THE TAX
BASE
Until the regime Of SQUANDERMANIA
- started II years ago, there was bipartisan
TeCOgHllOH OI lIllS SlIIlple ilSCdi tIutI
President Wilson once said:
"There is point at which, in peacetimes,
high rates of income and profits taxes discourage
energy, remove the incentive to new enterprise,
encourage extravagant expenditures and produce
industrial stagnation with consequent unemploy-
ment and other attendant evils"
Similarly President Coolidge Observed
1.-THE first object of taxation is to secure
revenue. When the taxation of large incomes is
approached with that in view, the problem is to
find rate which will produce the largest returns.
Experience does not show that the higher rates
produce the larger revenue the experience OF
the treasury department and the opinion of the
best experts place the rate which will collect most
from the people of great wealth. thus giving the
largest relief to people of moderate wealth. at
NOT OVER % PER CENT"
Of course, the economic benefits from postwar
ceilings on tax rates presupposed balanced federal
budgets.
The results will prove illusory if prodigal
spenders evade constitutional limits on taxation
through CHRONIC PEACETIME BORROWING.
TAX and borrowing limitations have the merit
Of tending to make governmental economy
mandatory.
If adopted politicians would automatically
have to turn down many fanciful schemes for
pump printing" at home and abroad.
Such ceilings would leave little or no margin
for permanent substituting OF foreign peoples by
practitioners of globaloney.
They would set up yardstlck for keeping
spending schemes within the limits of prudent
national policy.
Unless restraints are placed on taxation,
there will be quick fulfllment Of Chief Justice
Marshas admonition that the power to tax is the
power to destroy.
The political wisdom Of the American people
will be tested by their capacity to reject the Will
O. the wisp fallacies of political adventures who
purport to be able to give the public free ride.
At the coming November elections, candidates
for public office should be canvassed for their
views on proposals to put limits on the right'of
Prudent facing of this issue will affect the
material wellbeing of Americans for generations