Show ASCENDING TAXATION t DESCENDING INCOME THE VANISHING V POINT The first of or three instalments of or an analysis of the mounting cost of oC government federal state and local budgets studied in the light of oC private corporation management By JOHN W. W PRENTISS Senior Partner Hornblower Weeks New York U. U S. S government 1913 1029 1929 1932 debt State and local debt Total debt National income Total government expenses national state and local Net income available for taxpayers 72 Note Note Above Above figures obtaIned from National Industrial Conference through to 1929 In 10 computing 1932 figures the Guaranty Trust estimates through 1931 used as BS a n. basis for current computation Dr Mertz In the tho New York Times s has estimated current governmental expenses for 1932 at bUt but for r conservatism vre we Wc prefer tc to u use e last last years year's total toW In these days ol or unbalanced budgets national state municipal industrial or other kinds we are all very conscious conscious con con- of the tax problem because we realize that budgets must be balanced It is necessary for the federal government government government gov gov- to balance its budget It is nece necessary sary for tor the city of New York to balance its bud budget et It is likewise necessary necessary necessary essary for the U U. S. S Steel corporation or the New York Central railroad or tho General Motors company to bal balance bal Dal- ance its budget Private corporations moved by considerations of common sense and regard for the Interests o of their stockholders stockholders stock- stock holders try to balance their budgets by ay reducing outgo outgo outgo-by by spending less so that less must be raised This process is not fashionable with gov gov- Their basic proposition is that hat they must spend as much or more than ever before In In order to do this we have got ot to take lake a certain amount of medicine In Inthe inthe the form of additional taxes Most medicines arc are unpleasant to take but J If they accomplish their results quickly quick quick- ly 1 and painlessly the patient ought to tobe be satisfied Today it Is ne necessary essar in order to balance the budget to tax practically everything It makes no difference whether it Is real estate incomes wheat corn cotton or stocks or even beer they have all got to be taxed TrIo problem is how to tax them in the simplest manner and get the mane money because unless a tax produces produces pro pro- duces the money it is no good SALES TAX UNIVERSAL To accomplish this end cad the sales taxis tax taxIs Is of course the most desirable First because it is universal it compels every individual in the country to tc share directly In Ire it and it thereby makes that individual ta tax conscious and will perhaps persuade him to re rebel rebel repel re- re bel pel against the present extravagance in government Second because it isa is Li isa a logical supplement to the income tax third because based on its suc sue success success cess In Canada it promises actually to produce th the large volume of revenue revenue reve reve- nue which is necessary to balance these expanding budgets The way in which a sales tax supplements the Income In Income Income In- In come tax becomes immediately apparent ap apparent ap- ap parent when it is realized that in this country there were in 1930 only 2465 income tax payers out of a total population of people In England for there 2 example arc are income tax payers out of a total tot population of oC about In England the income tax base forthe forthe for forthe the head of a family is and in the United States it is As I am going to show the rapidly decreasing i income of the people of the United States makes it impossible to do any budget balancing with income taxes It therefore must and should be done with ti-ic ti sales tax DEBT GROWS ENORMOUSLY Let us its for a moment consider federal ted fed eral cral state and municipal indebtedness indebted indebted- ness before the war tho the debt of the U. U S. S government was about 1000 It rose during the war and immediately thereafter to about 86 Then it fell to about 16 16 and is now rising again so that at the moment it Is over 18 18 At the end of 1913 the total debt of our states and nd municipalities municipal municipal- ties tics was vhs approximately It has stead steadily risen since then mit until now it is approximately so that as we stand today our total debts federal state and municipal pal have risen since 1913 from approximately approximately approximately ap ap- ap- ap proximately to In other words in not quite 20 years rears our debts in this country have increased per cent I wonder wonder won won- der how long the people of these United States can stand this burden which becomes even more acute when the actual costs of oC government arc are compared to the national income out of which they must be paid now that state and municipal bond financing are arc out of the question Whereas the national Income was raised between 1913 and 1929 from 3 to even e in this period the rate of taxation increased so disproportionately that our governmental costs which had amounted to only 8 per cent in 1913 stood at approximately approximate approximate- ly 15 per cent by 1929 Since then the national income as you jOU know has shrunk alarmingly so that for the calendar calendar calendar cal cal- year 1932 we as a nation must expect to see our income drop below a fact to which our political leadership has obviously closed its ts eyes inasmuch as a fair estimate of taxes for the current year would total at least last years year's volume or or nearly third one-third of the national income INCO INCOME IE FIGURE SHOCKING Subtracting total governmental costs national costs national state and local local ot of in 1913 and in 1932 1032 from the estimated national incomes of oC those years cars it is shocking to find imd that the net income accruing to the taxpayers of this country will willbe willbe willbe be approximately or nearl nearly the same as that which accrued to our taxpayers in 1913 in jn spite of oi the 25 per cent Increase in population population population tion which has occurred in the meantime mean mean- time and in spite of the fact that the public pocketbook will be called upon to make almost superhuman sacrifices in this dreadful year to support an Unemployment unemployment Un- Un un un- employment relief program more serious serious seri seri- ous Otis than any question which has heretofore heretofore here here- faced our nation Because I feel these figures are so important I have undertaken to prepare prepare prepare pre pre- pare them in a tabular form orm which I believe must Immediately strike home In the mind of every taxpayer and which I hope will impress the congressman congressman congressman con con- gressman and his associates with the grievous need of the American people people peo peo- pie for relief See table at the head of this ar ar- ar tide To be continued tomorrow I |