Evening star., 1947-04-09

| Passing Of Fro Seen
With Deoth Of Ford
Today's Tax Laws Would Prevent
Man Becoming Millionaire
BIZ Dspid L4vrsscs
The passing Of Henry Ford SYM
bolises the passing Of an era-the time
when : man could build business
through his own initiative and little
capital borrowed from friends and wind
up rich man.
This cannot be done any more. II,
a Is populariy believed, Henry Ford
accumulated personal estate Of many
millions Of dollars because he was the
frst to make and market = low-prtced
automobile. no such amount can ever
Be earned again BY any indiyidual-un-
less present tax laws revert TO what
they were 20 years ago. This, OF course.
seems vary unlikely.
The theory that man who works
hard and conducts an honest business
can accumulate million dollars out Of
personal earnings Is fallacious. He may
build business and sell II and make
money that way but he cannot build
an estate either out Of his SALARY or the
dividends on his stock and keep hts
business. He may bequeath it but In
heritance taxes are heavy, too.
In 1929 man could retain about 81
per cent OF his annual income Il he
earned 100000 or he could keep rs
per cent II he earned q, ,000, 900 . year,
50 that in to 10 years he might save
several million dollars. But today he
can retain only about 80 per cent or
$4,000 out Of 100000 income and it
would take nearly so years to accumu-
late 100000 il he didn't spend any
Of his income for living and had his
home and living expenses paid for by
some other member Of his family, which,
Of course, isn't the usual situation. II
he lives on 5000 q year, therefore, and
saves $4,000 a year, it would take at
least so years to accumulate $1,000 900.
Success Penalixed.
II q, man could invent some idea or
develop some business that would give
him an income Of 81, 100000 . year, he
would retain, under present tax laws,
only about Is per cent or approximately
100000 . year. II he spent only t10,-
600 year for living expenses, It would
take him six or seven years to accu-
mulate 81 ,000, 600. 80
Certainly the accumulation Of $5,000,-
600. which is tiny fraction OF what
Henry Ford was able to amass 20 years
ago and probably In the course Of two
or three years, is something which un-
doubtedly will never again be possible
In America.
The theory that success should bs
penalized and that creative genius
should be repressed by putting as heavy
tax as possible on his income is now
prevalent In America. This view has de-
veloped most strongly under the Demo-
cratic Party and by the CIO union doc
trtne. Quite few Republicans are afraid
to depart from 1t because they think it
Is popular.
Even the proposed blanket reduction
In taxes which the House Of Representa-
tives recently voted does not materially
alter the situation as respects incentives.
A man earning 100000 q year win still
have to give the Government 80 per cent,
and II he lives on 10000 year and
saves the remaining $4,000, it would
take him Is years to accumulate $1,000,-
900. There are not many persons earn
ing $250,000 or over. But In this category.
under the House bill recently passed, the
Government takes In taxes. no less than
so per, cent. Thus, out OF $250,000, the
taxpayer would have 100000 left. II hs
used $4,000 to live on, he would be saw
ing $4,000 and 1t would take about ii
years to accumulate $1,000,00
Big Earnings Years.
What Is the average number OF years
that q successful man can keep on earn
ing any such large sum? Few men reach
large salaries or positions Of responsible
ity in big companies except after many
years Of service. SO, If they do serve ut
the top as many as II or II years. they
are lucky.
1t Is possible for man to accumulate
81 .000, 900 but, when he dies, the Federal
and State taxes relieve his family Of
about two-thirds Of it, so he might pos
sibly leave net estate Of $330,000 AZ
the result Of his long years Of work. The
income Of that amount, at per cent in
gilt-edged investments, would bring $13,-
200, which would not provide much for
his wife and members Of his family. II
he tries to give away his savings during
his lifetime the citizen finds that the
gift taxes are almost as high as the In
heritance taxes.
What Henry Ford represented was the
creative industrialist whose genius meant
the making Of jobs in big industry and
the building Of business which directly
and indirectly contributed tremendous
payrolls Of employment as well as taxes
to the American economic system. There
Is not much urge today to try to follow
in Henry Ford's footsteps-the tax laws
adhere to the pattern Of the socialistic
philosophy that success must be penal
lied.
Reproduction Rishts Reseryed)
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