Evening star., 1944-03-05
Heavy axation
TOCOntinue
By OUen L. Scott.

L
final return on l943 income can be
assured that the resulting tax Is tust
about as high as 1t is going to be during
this war period. Congress has made up
Its mind that the present tax rates are
| high enough. However, this is only part
| Of the story. The other part concerns
the taxes that individuals stin will have
to pay when the war ends. II taxpayers
find 1t good news to learn that taxes are
at, or very near their top, they at the
same time are going to be disappointed
to discover that little relief from war
time taxes can be expected in the years
that will follow the war.
The reason is that it is going to cost
far more money to operate this Govern
| ment after the war than 1t did before,
Where the cost was $1,000 900 900 In
1899, having risen from $4,000, 900, 900
In pre-New Deal days, 1t will be
near $4,000, 900 900 after the war, even
If there are no unusual outlays for relief
| or public works.
Bad tax news for the individual Of
moderate or high income stems from the
fact that 1t will be necessary to lower
sharply or to remove the wartime tax
on excess profits Of corporations. Indus.
try will have to be permitted to earn
money, If it is to do the things that viii
need to be done. At the same time there
will be some reduction In excise taxes
imposed In wartime to discourage con-
sumption Of goods and services. It 10
very probable, too, that the wartime
Victory tax will be removed to assure
that lower incomes are fully available
for spending.
All Of that adds up to the fact that,
If the Federal Governments finances
ever are to be put in shape, individuals
with moderate and large incomes will
need to go on paying taxes as high as
at present for many years after the war.
Either that will be true or Government
debt that will amount to about $3.50.
600. 100000 after the war, will 60 on
rising to an even more fantastic level.
The why's and wherefores OF this
somewhat discouraging outlook are be-
coming quite clear.
Right away, in postwar. 1t will be nee
essary to find 5000, 900 900 q year Just
to meet the interest charges on the debt
that will exist. This is more money than
the entire Federal Government cost In
the years before 1888. Then there will
be various aids to veterans, already
| promised or proposed, plus expanding
| commitments under the Social Security
System, that will involve another $5,OOO,.
100000 a year, or an amount approach.
ing that sum.
1t Is doubtful If this country will 60
back to a 150,000-man Army and air
force or that 1t will scrap It's Navy
when the war is ended. If q military
establishment Of even modest size ts
maintained in postwar years. the coss
will be no less than 5000 900 900 q
year. On top of that there are prom
ises OF various supports for agriculture
that will cost minimum of 1880.
100000 year. If the Government car
ries on no more than It's normal pre-.
war volume Of public works Of various
kinds there will be another $3.50. .000,-
900 in expenditure. In addition, 1t
costs about $1,000, 10000 q year to run
the regular departments Of government.
That suggests an annual cash outgo
| from the Government Of about $780,
100000 year after the war has ended
and adjustment has been made back
to peace. In this figure Is no provision
for q shelf" Of public works Of the
kind that even the most conservative
officials suggest. Neither Is there pro-
vision for a revived WPA or any other
Government enterprise directed at Civ.
ing relief or providing work for those
who may not be able to ind Jobs.
| *& &A
Several conclusions are impressed
upon officials who now are studying
this situation.
One Of the conclusions Is that any
large-scale postwar saving will have to
be at the expense Of the military estab-
lishment and at the expense Of the
veterans of this war. The tendency.
instead, Is likely to be toward Nberality.
second conclusion is that If Govern
ment costs are to remain 30 high the
country cannot afford another severe
depression designed to bring corrections
by debating incomes and prices. In
one way or another the level Of national
income will have to be kept high, 30
that there will be plenty Of income to
tax.
Another conclusion Is that II income
Is to be generated industry must be
active. For industry to be active there
will need to be encouragement to poll
icies Of expansion both In the domestios
field and abroad. This means that tax
policies must be designed to stimulate
venturing, rather than to discourage
venturing.
| But, II industry is to get some tax
relief, then individuals can expect little
relief. The prevailing theory is that
1t will be necessary to relieve low in
comes from taxation because it Is from
the mass Of these incomes that the
demand must come to absorb the i'm
mense volume Of goods that industry
can turn out. 1t is against the middle
and higher incomes, from which most
saving flows, that the high taxes will
be levied. The tendency is to level
incomes up from the bottom and down
from the top on the theory that too
much saving Is bad thing.
| All Of this means that the high taxes
now being paid by individuals are not
likely to be limited to wartime. They
probably are here to stay.