Evening star., 1944-09-07
Tuxes and Jobs


The postwar Federal tax plan
for high employment Of the Conn
mittee for Economic Development Is
a bold and forward-looking proposal.
And there is every reason to believe
that this country will be faced with
a very serious depression immedi-
ately after the war. and ultimately
with economic disaster. unless this
plan, or something like 1t. is put
into effect promptly when hostil-
tiles end.
The plan is predicated on several
main assumptions. It envisions
$4,000, 300 people at work, which, at
1943 prices, would produce national
income Of approximately $l40, ,000,-
0,0o0. From this national income
|. the Federal Government would re-
ceive from $4,000, ,0O0, 900 to $4,000
000, 900, exclusive of social security
funds. But with this income all
other Federal expenses, including
servicing Of the debt, would be met.
In other words, there would be a
balanced budget, with surpluses
being applied to debt reduction as
employment conditions permit.
These are the basic assumptions,
and If they can be realized there
will be no need to worry about post
war economic problems In this
country. The question, obviously, is
how to realize them.
Many things will enter into the
picture, but the CED, in this report,
is concerned only with the question
OF taxation, and it believes that
this is of the greatest Importance.
Under our present tax system, ac-
cording to the report, it will be i'm
possible to achieve the necessary
increase in employment, and there
fore the committee calls for "a
drastic and courageous revision" of
the system. To this end five major
conclusions are advanced:
% The personal income tax
should provide at least half of the
total Federal taxes collected, but at
rates which would give all taxpayers
substantial relief from the present
heavy burdens. CD Excise and sales
taxes should be lightened as much
as possible. 60 Taxes applied di-
rectly against business operations
should also be lightened as much as
possible. (D Serious inequities of
the present tax laws should be re-
moved. 60 Federal taxation should
be heavy enough to end the long and
uninterrupted rise lover the past
IS years. in the national debt, and
to reduce the debt when employment
and production are high.
The committee realizes that it
must "sell" its program to the
country. The political atmosphere
being what it is, it will not be easy
to maintain personal income tax
rates at levels we'll above the prewar
years while substantially reducing
the corporate earnings tax rate and
doing away entirely with such things
as the excess profits tax and the
double taxation Of dividends. 1t
makes two main points, however, in
support OF its contention that this
can and must be DONE.
First, it is not the corporation as
such which pays the high tax. Indi,
viduals pay taxes; corporations and
commodities cannot. Hence, when
some one undertakes to soak" the
corporations, what they are really
doing Is to soak the individuals who
actually pay the tax-the workers
who pay it in lower wages, the in
vestors who pay it In smaller divi-
dends, or the consumers who pay it
In higher prices for the product the
corporation sells. Second, the at
tempt to pass the bulk of the tax
burden to the corporations is "ex-
tremely and peculiarly damaging to
employment" because it takes vital
and enormous funds out OF the
stream Of business operations when
they are most likely to be used and
where they can be used most ef-
fectively to increase production,
create more jobs. pay out more
wages or reduce the price of the
goods to be sold.