Evening star., 1947-02-05
New DeuIism Flavor
Seen in Tux Battle
Proponents of Graduated Scale
Held Evadine Basic Issue

Proponents of Graduated Scale
| Held Evadine Basic Issue
By Dapid Laurence
Now that 1t seems apparent that there
will be substantial cutting of the Fed
eral budget. significant controversy
has arisen over the question Of whether
to make q fiat percentage reduction In
taxes or to graduate 1t so that the
lower-income groups will get the maxi
mum benefit.
What Is significant about 1t Is that
New Dealism still spreads its socialistic
flavor over the Washington scene. So
many Washingtonians, including some
Republicans, have been indoctrinated
with the idea that the tax system should
be used either for punitive purposes or
to bring nearer the days Of state social
ism that the advocates OF free enter
prise system and a system Of taxation
primarily for revenue purposes find
themselves up against the same insidi-
GUS propaganda as was prevalent before
the radicals were repudiated in the 1916
elections.
The proponents Of the graduated scale
Of reductions are sending forth the
usual demagogic arguments that there
are more votes in the lower brackets and
that the so-called 'rich" would be 700
much benefited by straight across
the-board" cut. The reading public. ..who
for the most part do not know the facts
about taxes In relation to business, are
led to believe that there are no argu-
ments on the other side at all.
Principle Back Of Idea.
During the war the income OF taxpayers
in the middle and upper brackets were
cut proportionately deeper by taxes than
those of any other group and 1t is, there
fore, only equitable that the relationship
between rates should go back to the
peacetime pattern.
Actually, the amount Of money in
volved in fiat percentage reduction
straight across the board" Is relatively
small, but the principle back of the idea
Of treating everybody alike and remov-
ing the penalties on thrift and enter
prise Is far more important.
It Is to the interest Of sponsors Of
state socialism and to the Communists
to break down the private enterprise
system in America. One way to do it is
to destroy incentive and level off every
bodys income so that when business ex-
pansion Is baked and there is depression
the state steps in and, by pump prim-
ing" adds to the public debt, making 1t
possible for the administration which
hands out the money to continue
in power and pursue revolutionary
schemes.
Ever since the New Deal began in 1888,
the tax system has been abused. 1t has
been utilized to persecute the successful
and to penalize leadership. There were
times when even the language Of the
advocates of governmental intervention
in private affairs was unashamedly the
language of revolution" in which the
end is supposed to justify the means.
The National Capital still contains,
inside and outside of Government, the
devotees of New Dealism who look
askance at the idea Of treating rich and
poor alike, not only on taxes but in the
courts. Glass prejudice is SO deeply in
grained that Republicans now are be-
ing told they do not dare vote for a fiat
percentage reduction in taxes lest they
be punished at the polls.
The truth is business expansion and
the creation of jobs and the develop
ment of chronological improvements in
production so as to help bring prices
and the cost Of living down depend on
what incentive there is for the white
collar workers of America-the business
management and professional class. The
number of persons who derive their in
comes from clipping coupons is too
small to be factor in deciding broad
policy of incentives as against those
who earn their incomes themselves.
Basic Economic Issue.
II is being said in some quarters that
when the Republicans reduced the sur
taxes in the 1920s a boom ensued and
a terrible depression followed-as If
there was any connection whatsoever
between the two things. Actually, the
Government collected more rather than
less revenues in the '20s when it changed
the tax rates so, as to introduce new in
centives. Actually also, the panic Of
1929 was to a large extent the result of
the speculation of the little fellow in
the markets and was due to the fact
that there were no laws to control ef-
fectively the issuance and sale of Sc
curities. To say that the economic up
heaval of 1929 and 1880 was due to
some tax law in the United States is to
ignore the conditions then prevailing
in Europe as well as the speculative
fever of persons of small income.
But in the next few months such dis
tortions will be heard again and again.
The test will come when the conserva-
tive Republicans and the conservative
Democrats are challenged to stand up
for incentives in the private enterprise
system as against the demagoguery in
volved in plan to remove millions Of
persons from the tax rolls altogether so
that as citizens they will contribute
nothing to their national government.
The issue may appear to be political,
but it is basically economic. If the
socialistic theory of leveling of and
standardizing everybody's. pay is to pre-
vail-as advocated by industrial unions
in the matter of wages-then the craft
workers of the AFL and the nonorgan-
lied professions have much to fear from
any legislative support for such a doc
trine If incomes must be brought down