Evening star., 1945-03-08


Lowell MeIlett. II 80 States
should adopt the resolution, the
constitutional convention must be
called to draft and submit such
an amendment. If SO States should
then ratify 1t, the proposed ceiling
on those particular taxes would go
into effect.
This plan to protect the recipients
OF large incomes, inheritances or
gifts against taxation, based on their
ability to pay, is not natural
growth. 1t is something that has
been developed and quietly maneu-
vered through one Legislature after
another by an organization which
calls itself the Committee for Con-
stitutional Government or, some
times, the Committee to Uphold the
Constitution. Names associated with
1t are those OF Frank Gannett, New
York newspaper publisher; Sam B.
Pettengill, an ex-CongreSsman; and
Edward A. Rumely, under indict-
ment, awaiting trial, for contempt
OF Congress for refusal to reveal
the names of contributors to the
Committee for Constitutional Gov
ernment.
Success Mystifies Capital.
The success of this group thus far
has mystifled Washington. More
than that, it seems to have mystified
some of the States. Members of
some of the Legislatures, now on
record as having voted for the reso-
luton, say they were unaware of
what was happening at the time.
The attention OF Congress having
been called to the matter by Repre-
sentative Wright Patman of Texas,
members of the House Ways and
Means Committee are becoming dis
turbed. Some of them, at least, do
not like the prospect of writing
postwar tax bills with their hands
shackled by such a constitutional re-
striction. The proposed amendment
would apply only to peacetime taxes,
but congressman point out that the
Governments need for revenues will
not cease the day the war ends.
They have IN mind the heavy ex-
penses Of the transition period, the
care OF veterans and so forth. They
agree that lower taxation on large
incomes would mean higher taxa
ton on small incomes; that the 25
per cent maximum, in effect, would
become the minimum, as we'll as
maximum, for many taxpayers now
required to pay less. Those opposed
to sales taxes and excessive excise
taxes believe that such taxes would
become inevitable if the proposal to
relieve the big taxpayers should be
carried out.
Mariner S. Eccles, Federal Re-
serve Board chairman, sees another
threat In the Gannett-P t-Pettengill-
Rumely plan. Il can't imagine any
action that would be more inflation-
ary," he told the House Banking
Committee this week.
The State Legislatures that have
fallen for the plan apparently have
been persuaded that relieving big in
comes from heavy taxation would
release great flood of risk capi-
tal." This capital, it Is asserted,
would flow into all kinds of active
enterprises and vast numbers of jobs
would be created.
Room for Doubt.
Maybe so, but there is much room
for doubt. The builders of Americas
great industries, and of Americas
small industries, for that matter.
have not been the kind of men who
band together to protect their con
stitutional right" to hold on to
everything that comes into their
hands. The industry builders have
been men ready to take a risk, men
with the courage to compete with
established concerns, men driven
by desire-or necessity-to produce
something, some article or service,
better than has been produced be-
fore.
The promoters of the proposed
amendment, on the other hand,
seem to be asking the Government
to guarantee their riches for the rest
of their lives and the lives of their
children and grandchildren. They
are asking to be freed from the need
to hustle. They want sure thing.
Tax experts in Congress and out
are seeking a formula of incentive
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