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Show , - . - _ _ - - - = I r . ; ( # t ? ' - = .E E . # ! - - History's Historys ' ' Biggest Tax BillCan't BillCant Bill BillH BillCan't Q QCan't H Can't Cant ' ' Meet War liar DemandsRequired Demands DemandsRequired Required Savings Savmgs , , Smaller Tax Exemptions ExemptionsSeen ExemptionsSeen Seen as Partial Solution to tor toInflation toInflation r Inflation Threat ThreatBy d ByUAUKHAGE By liAUKHAGE BAUKHAGE liAUKHAGEJew BAUKHAGEd BAUKHAGEnewt J\ew J ew 1'W /newt newt 1\ 1 \ / \ 'W W ( ' < ' Analyst and Commentator Why don t you commentators commentatorsqu qu t trying to wake the people up upto upto upto to the war and try to wake Wash Washington Washington Washington ington up up7 up7That ? ' That s a quest on will which whch h repeats It- It Itself itself it itself - - self in m my listener mail day after afterday afterday afterday day So help me I kno v the people peopledon peopledon peopledon don t needwaking need waking wakmg up And who am amI amI amI I to decide whether Washington Washmgton issnoring is Issnoring I Isnoring snoring or just breathing breathmg deeply7 deeply deeply7Let ? ' I Let me say first of all that I Iknow Iknow . ' know that a large part of Wash Washington Washington ington is awake and burning the them them them m dnight oil 011 And remember thatmeans that thatmcans thatmeans thatI I mcans means 2000 2 000 business busmess men drafted draftedinto draftedinto drattednto into ; service as well as the govern government government government ment officials the MAJORITY of ofwhom ofwhom ofwhom whom are non part san men who whohave whohave whohave have worked through both Republican Repubh Republ Repubhcan ] can and Democrat c regimesBut regimesBut regimes regimesBut But let me go on from there and andtalk andtalk andtalk talk about "some some " ome of the slumberers slumbererswhom slumbererswhom slumbererswhom whom you nor I nor B g Ben nor noran noran noran an a r ra d alarm could wake up f fthey fthey fthey they had gone to bed after six cups cupsof cupsof cupsof of coffee and the rad o 0 onI onI on onI I am talking ( aga n ) about what whatWashmgton whatWashington whatWashington Washmgton Washington is talking talkmg about today todayspecifically today- today todayspecIfically todayspecifically - - specifically the tax b U 11 ll llnow now n con congress congress congress gress and inflation m in generalThe general generalThe generalThe The b ggest tax bill ] in n our h story storyany storyany storyany any calm cool instructed mstructed thInker thInkerthInks thinkerthinks thinkerthinks thInks isn t nearly big enough Why9Well Why SVhy ? ' Well some say because the fiscal fiscalpol fiscalpot fiscalpol pol pot cy makers of the nat on don t tseem tseem tseem seem to be much more war con conSCIOUS conscious conscious SCIOUS than the home guard before beforePearl beforePearl beforePearl Pearl HarborNow HarborNow Harbor HarborNow Now let s get a te fe v tacts facts stra ght ghtThere ghtThere ghtThere There are men m the treasury de department department department partment and s s ttmg tting on congress congression congressional IOn 81 al committees deal ng with fiscalmatters fiscal fiscalmatters fiscalmatters matters who know their monetary monetaryomons monetaryonions monetaryonions omons onions as well as a farmer knows knowsthe knowsthe knowsthe the ro vs he hoesBut hoesBut hoes hoesBut But let us proceed from thereAbout thereAbout there thereAbout About a year and a half ago LeonHenderson Leon LeonHenderson LeonHenderson Henderson who no matter what yol you youmay youmay ; may thinkof think of his neckt es his man manners manners manners ners or h s tactfulness ] is s pretty good goodat goodat goocat at tores fores ght , , echoed the thoughts of ofperhaps ofperhaps olperhaps ' perhaps a hundred other oUter men In InWash irWash inWash Wash ngton when he warned agamst against agamstInfia againstinflat agamslinflat ; Infia inflat t onOne onOne on onOne One of the many brakes on intla infla intlabon inflalion inflation bon lion is taxat on Taxat on of courseis course courseIs courseis Is an anc ane ent eat process Another meth method method method od not so ancient is ] s compulsor compulsory compulsorysavmgs compulsorysavings ; savings savmgs savingsHenderson savmgsHenderson Henderson favored compulsory compulsorysavmgs compulsorysavings compulsorysavings savmgs savings So did a lot of others Hsaid He HesaId Hesaid ( ; saId so He tr ed to convince convmce Mr MrMorgenthau MrMorgenthau MrMorgenthau Morgenthau but Mr Morgenthau Morgenthaushuddered Morgenthaushuddered Morgenthaishuddered shuddered Tha That twas was totalitar totalltar an anRegulate anRegulate anRegulate Regulate prices ( what you payout pay out outall ) ) ! a all II right but don t tell a tree free Amerl Ameni Amerlcan Amenican Amencan can cit Clt zen what he be has to put m in mh inh irh h s sock That s total tanan tarlan tartan Hen Henry Henry Henry ry Morgenthau never said those thosewords thosewords thosiwords > words to me but one of h s close closeassociates closeassociates closiassociates , associates d dWell dWell d dWell Well Henderson m in one of h s tact tactless tactless tactless less moments a year and a half hall halfago hallago halago ( ago commented on Mr Morgen Morgenthau Morgenthau Morgenthau thau s opinions opmlOns on compulsory savings sav say savmgs sayings mgs ings ( not tor for the record ) He saId saIdm saidin saidin m in effect Henry is perfectly WIll willing willing 109 ing to have me put pttt pill a gestapo m mevery i ievery 11every n every grocery store but he th nks nksIt nk nkIt nkit s It s Hitlensm Hltlerlsm Hitlerism to force ( orce people to savor save saveor saveor e or buy bondsThose bondsThose bonds bondsThose Those wercn weren t h s exact eact " , words but butthose butthose buthose t those were his sent ments meats I quote quotethem quotethem quotithem e > them not because Mr Henderson Hendersonknows Hendersonknows Hendersolknows n knows everyth ng but because he hetalks h htalks h'talks htalks e ' ; talks with a punch I might also alsoadd alsoadd als'add alsadd o ' add that thlt : there appeared a year ago agoan ag agan ag'an agan o ' an article from the pen of Reserve ReserveBoard ReserveBoard ReservBoard oe e . Board Chairman Eccles entitledPrice entitledPrice entitled entitledPrice Price Ceilings Are Not Enough Enoughin Enoughm m which he expounded the thesIs thesi thesIsthat thesithat thesithat s that money must be taken out of ofthe cthe o othe 1 the easy spenders pockets poc1.ets poc1ets . or mfia mfiatlon mfiatlon inflation tlon would result . . . One Third Thtrd Thtrdof Thirdof of the Way WayToday WayToday WayToday Today we have a tax b 11 II ll .h h . ' . h ch chstands cstands c h : stands seven months after Pearl PearlHarbor PealHarbor PearlHarbor 1 Harbor as Incapable of meeting meetmg thex the theex th thex e ex gencies of war as Manila Mamla or orSingapore o oSingapore oSingapore r Singapore wereIt wereIt were wereIt It is true that expenses have shot shotup sho shoup sheup t up more rap dly than was expected expecte expectedalthough expectealthough expectealthough d ( although many say this should havbeen have havebeen bav bavbeen e been foreseen ) And no v we are arelucky arelucky arlucky e lucky if 11 we can pay one third ot otour o oour cour f our way Daniel Damel Bell undersecre undersecretary undersecretary underscoretary ' tary of the treasury said that 24 bll bil blllion billion bi : I lion dollars of the national expendl expend expendlture expendture ] ture tune \ would ould be handled with borrow borrowIng borrowing borrowing r Ing ( not all from the banks ) thIs thIsyear the theyear thiyear s year Secretary Morgenthau had re refused refused r rfused < fused to answer a question on that thatpomt tha thapoint thapoint t pomt point in the senate committee hear hearmgs hearngs healings mgs ngs ] when Senator Taft put ith it to toh th h m but turned it over to Bell Taft Taftprotested Taf Tafprotested Talprotested ' t protested Morgenthau that he wanted Morgen Mergerthau thau as the policy making makmg head of o c f the department to answer Morgen Morgenthau Morgenthau Morgenthau thau then sa d he would stand be beh beh beh h nd Bell s prediction predictionIt It is true that the house cut the thetax thetax thetax tax bill as submitted by the treas treasury treasury treasury ury The treasury asked tor for $8 8 ? $ 8 700 700000000 000 000 and got $6 6 $6200000000 6200000000 $ 200 000 000 from fromthe fromthe fromthe the house The senate is being bemg urged urgedI urgedto urgedto I to restore the cuts But the treasury treas treasury treasury ury program itself was tar far too toosmall toosmall toosmall small the experts say At present presentcalculat presentcalculat presentcalculat calculat ons ens the government s m in mcome income income come for the fiscal fist'al fistal ' year 1942-43 1942 43 194243wIll 194243will 1942 19423will - - 3will wIll be around 24 b llion Illon liion dollarswhereas dollars dollarswhereas dollarswhereas whereas its outgo w wll 11 be ] in m n the theneighborhood theneighborhood theneighborhood neighborhood of 77 b 11 onsU onsIf ons onsIf If U after Pearl Harbor the govern government governmint government ment mint had asked tor for the maximum maximumit It needed the country would havebeen have havebeen havebeen been only too glad to subm t As Asmy Asmy Asmy my correspondents say the coun coup country couptry country try didn dldn t need to be waked up upWashmgton upWashington upWashington Washmgton Washington doesCr doesCr does doesCr Cr t cs of Mr Morgenthau and bisprogram hIS hISprogram hisprogram program say too little httle and too toolate toolate to tolate < late lateThey They say too I ttle because the thed thed thed d fference ilerence between outgo and m mcome mcome mcome come tor for the fiscal year end ng m in in1943 1943 t \ 11 n be at least 53 b 11 on dollarsNon dollars dollarsNon Non Negotiable BondsThey Bonds BondsThey They say too late becau e m in msuffic insufiic msuffic suffic sufiic ent measures have been taken takento takento takento to check ] inflat mfiat nflat on and one way mfia nnfla inflat mfiat nnflat t on can be checked is to get right rightafter rightafter nghafter after the spending money and make makeIt makiit It saving money by forcing forcmg the peopie peo peopie peopie pie to invest mvest in non negotiable bonds bondsthat bondsthat bondthat that can t be cashed m in Intl unt 1 I after afterthe afterthe aftethe the war A lot of ot people are gomg going gomgto goingto gom ; to need spend ng money aga n when whenpeace whenpeace wheipeace peace comes until unt industry mdustry is ] s converted con converted convented verted vented back from war product on to tocIvIlian tocivilian tccivilian cIvIlian production productionAs As one man connected with the theFederal theFederal thFederal Federal Reserve board said to me meThere meThere There ] is s one th ng that very few fewpeople { fewpeople \ people realize When the government governmint govern government ment mint or anyone else borro vs from fromthe fromthe the bank new money is createdthat createdthat created that makes inflation mfiatlon There ] is s plen plenty plenty ty of money m existence no v to pai pay paywar paywar war expenditures and avo aye d the fatal fatalerror fatalerror fataerror error of borrowing from the banksThe banksThe banks banksThe The d fficulty now is that the dol dollars dollars dollars lars wh ch are the most dangerousm dangerousin dangerous m in bidd bldd ng up prices and caus ng In Infiat ] n nflat flat fiat on are the dollars in m the pay en envel envelopes envelopes vel velopes opes of the workers of mdustry industry mdustryAnd industryAnd And these dollars are not as tar far as aswe aswe a : we can est mate the dollars that an are anbuying arebuymg arebuying buying buymg bonds bondsAnd bondsAnd And another thing thmg The ta\.es ta.es ta .es es taxes ta.esdon taxesdon ta\e ta e \ . ; don t reach these dollars either eitherWhat eitherWhat What we may as well realize IS ISCO"TUng isconing i ; coming CO"TUng COTUng coning " though not coming as soon soonas soonas as it should is One compulsor compulsory compulsorysavmgs compulsorysavings : savings savmgs although we won t use that thatunpleasant thatunpleasant tha unpleasant word compulsory It w iv II U IIprobably Uprobably 1 probably be a requ rement to buy buybonds buybonds bu : bonds not redeemable until after the thewar thewar thiwar war and so staggered that they theywon theywon the : won t all h t the treasury at onceTwo onceTwo once onceTwo Two a smaller tax exempt on so sothat sothat sithat that we will get the loose dollars dollarsfrom dollarsfrom dollarfrom from the lower income mcome brackets bracketsThere bracketsThere bracketsThere There are ae ? ; more of those dollars to toget getThree getThree get getThree Three there will have to be besome bsome some leniency lemency for the fixed salar salary salaryman salaryman : man who is already sav say ng fig the av average average erage middle class that puts money moneymto moneyinto mone : into mto savings savmgs regularly in m the form formof of mortgages on homes or farms ( arms or orplants orplants o plants money into mto life l e insurance msurance pol poi policles poiicies icies icles money into mto pension plans That ThatIs Thatis is savings it ! is s not creating infla mfla mflat t on But that man with the h g.taxation gtaxation gh ghtaxatIOn ghtaxation . taxatIOn those in his ills income mcome brack braak brackets braakets bracliets ets have to pay has to go to the thebank thebank bank and take the money from the thesavmgs thesavings savings savmgs which he has there to turn turnit turit it over to the governmentCanada government governmentCanada Canada has faced this problemThe problem problemThe problemThe The United Umted States will have to War Warproduct Warproduct Waproduct product on is ahead of schedule fls fis flscal fiscal cal thinking thmkmg is lagg Jagg ng beh ndWe nd We can see a year after Mr Ec Eccles ( cles des sa d so that price ceilings cellmgs are arenot not enough Increased costs are aresuch aresuch ar arsuch such that the packers as the can canners ners iris before them have announced announcedthat that they just won t stay In busmess business busmessIf businesse if they have ha ve to opera operate te a at t a loss lossThe The price of the finished product producthas has a ceil cell ng fig but the raw material materials materialsand materialsand and wages have no ceil coil ngs Some Somebody Somebody Som < body has to corral those dollars dollarsUrban . . . Urban res dents rank highest in inthe the pro proport port on of college graduate graduates graduatesIn in the population with 5 7 per cent centas as COtlpared corPared cor ( ) pared with 42 4 2 per cent for forrural forrural to torural rural non farm and 1 3 per cent for forrural rural ! farm arm groups accord ng fig to m in mforma format forma t on collected oIlectcd by the depart department departmint ment mint of ot commerce in the 1940 1940census census |