Milford chronicle., 1957-10-11
CAN THE INCOME TAX BE REDUCED

CAN THE INCOME TAX BE REDUCED
Nobody likes to pay taxes-a statement
which amounts to cliche to end all cliches
Ever since the first tax system was devised,
way back In the mists Of history, people
have grumbled against the burden Taxation
has been a root cause of wars and revOlu-
tions and of all manner of other upheavals.
In this country today, sentiment on the
tax problem seems to be passing the grum-
bling state. There is growing feeling, both
in and out Of government circles that some
thing drastic must soon be done. The first
and foremost desire, of course is to reduce
the extent of the burden = to find ways
whereby the government will take less of
our earnings and we may keep more for
ourselves. Then, in addition to this, there
is a strongly-backed belief that the tax sys-
tenn is unjust in many particulars, is unnec-
essarily complex, and needs a basic over
hauling Like Topsy, this system "just
grew" over a period of many years. Stu
dents are generally convinced that it is full
of needless inequalities and cOnfusiOnS.
"A number of specific proposals for tax
reform are now current. One is complete
and total repeal of the federal income tax
law. This was suggested some time ago by
L. Coleman Andrews, once Commissioner of
Internal Revenue, and it was his principal
plank when he ran for President on a third
party ticket last year. A bill for achieving
this end, via a constitutional amendment, has
been offered in Congress.
However, Abandonment of the income tax
is an extremely remote prospect now. The
proposal which seems to offer the best
chance of concrete action in the field of tax
reform is found in a bill introduced by Rep
resentative Sadlak of Connecticut. He has
made thorough study of the matter, and is
convinced that income tax rates can be
o4 inoroocod fodoY.ol
income resulting from stimulated economic
activity would more than make up for the
losses, and would bring the government all
the revenues it requires Under the terms of
the Sadlak bill, the existing income tax base
rate of 20 per cent would be reduced to Is
per cent. The progressive rates applying to
the higher brackets would also be cut. The
ultimate goal is to reduce both the top IN
dividua income tax rate and the corpora
ton tax rate to a maximum of 42 per cent,
as against the present 81 per cent and 81
per cent rates. The reform would take place
gradually, over a period of five years, with
the provision that the time could be extended
to nine years if that were necessary to pre-
vent an unbalanced budget. Significantly, go
per cent of the tax relief resulting from
adoption of the Sadlak plan would accrue
to people with taxable incomes of $4,000
year or less.
Another important point deserves at
tention here. Contrary to the cOmmOnly-held
opinion, very high tax rates are not big rev.
enue producers for government. Henry HaZ-
lit tells this story. Using figures produced by
a Tax Foundation study, he shows that If
the present rate structure had a maximum
of so per cent as against the 81 per cent,
the government would still obtain SO per
cent of the revenue at 1855 rates. and the
loss in revenue would be only 1874 million.
On top of that, he writes, '"Time and again,
when the highest rates were reduced, rela-
tive revenues from the high-incOme brackets
rose" He cites the 20's as proof, when the
top surtax rates were heavily cut. Despite
this reduction" he says, "the share of the
total income tax paid by the high-income
bracket more than doubled-from 80 per
cent in 1920 to 65 per cent in 1929"
1&<S@&%
BREAD AND BUTTER
Various commentators, as well as the big
three in auto manufacturing, may end up
behind an eight ball in the present cOntrO-
versy with Walter p. Reuther concerning the
United Auto Workers proposal for reduc-
tion in the price of 1858 cars. This contro-
versy touches on an issue which might even
SNOWFALL to the point of putting Democratic
President in the White House in 1860 unless
the inflationary trend can be reversed.
The price index continues to rise, month
by month The memories of the Great De
preston are not dead; they are only dor
mant The likelihood is that, unless rising
prices are controlled, initiation and the cost
of living may be the predominant domestic
issue of 1860
Reuther has put his finger on an issue
which cuts at bedrock. Regardless of what is
said now, the price index will determine the
trend of opinion. Already butter has had its
effects in elections. Thus, the Wisconsin vic
tory of Proxmire over Kohler In the farm
areas, butter beat Kohler Bread and but
ter, the economics Of everyday living-this
is a most meaningful focal point in politics
today.