Evening star., 1947-10-27
Tax-Free Straight Pa
For Overtime Urged
To Raise Production
Incentive Held Needed
To Increase Output os
ReuI Cure for Initiation
By David Laurence

By David La,orence
The strangest aspect of President
Truman's plans to aid Europe and
to tackle the problem of high prices
In this country is that hardly any
attention is being focused by the
administration on the real cure for
inf1ation-increased production.
What the President advocates
when he recommends ALLEGATIONS"
or controls" of materials and sup
plies is dividing up of existent pro-
duction He admits that there are
not enough goods available to supply
the worldwide demand, but never
theless he fails to offer any plan to
stimulate the production of goods.
Throughout the world, of course,
the problem is the same-lack of
production. It has been said re-
peatedly that the world is not suf-
fering from a shortage of dollars but
shortage of goods. Actually there
is not enough work being done to
meet the crisis.
This is due in large part in Amer
lea to penalties and barriers erected
by Government itself. Instead of
providing incentives to greater pro-
duction, the existing policies tend
toward limitation of production by
placing penalties on increased out
put.
What can be done about it? This
correspondent offers plan which it
may be hoped will prompt others to
do likewise with the basic objective
Of increasing production and event.
ually bringing prices down.
Plan Offers Incentive.
The plan consists of primary
incentive to the workers of America
1t involves the granting of a tax
exemption for that part of the
workers income represented by as
many hours of work above 40 hours
q week as he will agree to accept
payment for at straight time" rate
This would not involve any manda-
tory change in existing arrange
ments where overtime is customarily
worked and paid for at time and-a.
half rates as provided by law. II
would apply only to those hours
voluntarily worked in excess of ex-
isting work schedules and would be
applied only to what could b.
specifically designated as "extrs
hours" The salaried man should
have the same exemption as the
wage earuer.
Labor unions, of course, woult
have to agree to temporary modi
f1cation of their agreements for ;
fixed period. The entire success o
the plan would depend on volun
tary action. Congress would merel.
make such arrangements permis
sive by amending the present wag'
and hour law for one year onl.
and by granting the worker ia,
exemption for all hours above 4C
worked at straight-time rates.
The plan would be simple t.
administer since payroll deduction
nowadays for the purpose of tn
withholding tax are readily calcu
lated on a fiat percentage basi
anyway and the accountants of tn
employer would merely keep sepa
rate the amount OF income tn
worker received for tax-exemp
hours of work. In making out in
come-tax returns, individuals woul
receive data at the end of the yea
as to the amount of income whicl
the employers record would shov
to have been derived from tax
exempt hours. 1t would be HANDLED
as any other tax deduction.
Production Increase Seen.
The effect of the plan would b
instantly to raise production b.
tremendous amounts. Today EN-
ployers hesitate to put on worker
at time -and-a-half rates for
few hours a day or night becaus
OF the heavy expense and yet the
often do not have enough man
power willing to work full eXtr
shift at straight time. The pla'
would increase take home pa
for millions of workers.
Actually the wage and hour LAY
by holding production TO 40-hou
week with no overtime is the bigges
deterrent to increased earnings an
increased production in Americ
today. There is, Of course, no la'
against working overtime but tn
time -and -a-half requirement op
crates as a penalty because it i'm
mediately increases the cost OF pre-
duction for which there is no wa
Of increasing the price.
The whole drive should be jul
the reverse-to remove penalties s
as to increase the number of houI
worked and thus to enable prt
ducers to sell in larger and larg'
quantity and, by bringing down tn
unit cost of production, pave tt
way for price reduction. The psy
chology of dividing present produe
ton merely adds strength to tn
economic forces that send price
higher. Price control is no answe
because it invites conditions unde
which black markets flourish. Sure]
there must be many ways to ir
crease production if the Presider
will use his powers Of publicity an
will indicate to Congress what legis
lation he will approve so as to pre-
vide incentives to production.