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Show BrueharVs Washington Digest (New Taxes Sure to Come, Senator Harrison Warns 'Another Federal Deficit of Four Billion Dollars Faces Country; New Sources of Revenue Sought; More Persons to Be Hit. By WILLIAM BRUCKART WNU Service, National Press Bldg., Washington, D. C. I WASHINGTON. It requires a considerable amount of courage for an active politician to talk about more taxes in an election year, and it is a hopeful sign when one tells the truth about such a politically delicate matter. When Sen. Pat Harrison, the veteran Mississippi Democrat, announced the other day that new taxes are coming, therefore, there-fore, it became a matter of moment. mo-ment. It was significant first that Senator Harrison, speaking as chairman chair-man of the powerful senate finance committee, should boldly say there must be new taxes, and it was significant sig-nificant in the second place because Senator Harrison has not always stood shoulder to shoulder with the New Dealers. But there Is another federal treasury deficit of something like $4,000,000,000 staring ns in the face, and the size of it Indicates Indi-cates that no progress has been made whatsoever in curtailing federal spending. It tells us, too, that the much ballyhooed business recovery of a year ago is yielding less in taxes than had been calculated by the wishful wish-ful thinkers. Thirdly, the probable deficit seems to show there was at least some merit in the assertions by Senator Harrison and others in congress con-gress last winter that some of the New Deal policies are driving the country further into a hole instead of bringing it out. Senator Harrison's statements constitute a warning that federal taxes must dig deeper. In effect, he told the country that the government govern-ment has been taxing to the point where it can not expect any increased in-creased returns from the present sources, however heavy the levies, and that the scope of taxes must be extended and expanded. More Persons to Be Hit by Federal Taxes What does that mean? Simply, It means that in any new tax laws that are enacted, congress will include in-clude a greater number of persons within the realm of federal tax sources; people who never have paid taxes to the federal government govern-ment before are going to pay them hereafter. I am referring to income taxes, directly, but the way the picture pic-ture looks to me, there will be more taxes that are indirect and they hit everybody. If congress doesn't extend ex-tend the scope of federal taxation, there will never be any chance of a balanced budget, and if the future does not bring forth a balanced budget, we may as well kiss our democratic form of government good-by. The reason I say there must be additional "hidden taxes," levies that are included in the cost to the consumer such as the cigarette tax, is that Senator Harrison's own statement state-ment shows there will be insufficient revenue raised by lowering the personal per-sonal exemptions under the income tax laws or by making the tax heavier heav-ier on those of, say, $10,000 annual Income and above. There can not be any very large addition to the revenue gained in that field for the very good and sufficient reason that there are not enough of those taxpayers. Bureau of internal revenue rev-enue statistics prove that about 60 per cent of the country's income earners have 'less than $2,000 per family. As the laws now stand, a person who is married and has an income of $2,000 or less need pay no tax. So it is seen that only a mere drop in the bucket of new revenue can be obtained in that direction, wholly because if all of them were taxed the amount still would be small. Yet, any serious attempt to raise revenue to balance federal expenses ex-penses must include levies on the lower incomes as well as other new taxes that apply generally. To Search for New Tax Possibilities Senator Harrison's committee will search through all of the various tax possibilities in the next three or four months. It will have to do that. The house committee on ways and means, which considers tax legislation leg-islation in the house, will not have the courage to go as far in adding to the tax burden. It never has had that much courage for the reason that its members come up for election elec-tion every two years and, again, taxes are unpopular things for a politician. pol-itician. Thus, we will have to look to the Harrison committee if progress prog-ress is made in bringing the nation's tax receipts into some relation with its spending. The addition of new taxes is a serious matter, yet it appears that new taxes cannot be avoided. We have had our play time, our fun. V.'e have danced; now, the fiddler must be paid. When new taxes are added, the buying power of every person paying the tax is reduced by that amount. But through five years, money has been spent by the government In ways that put to ihame the famed drunken sailor ashore for the first time in a year. Waste, wreckage, nit-wit plans and programs all have cost billions of dollars. As everyone knows, when new taxes are added, a greater percentage percent-age of the country's voting inhabitants inhabi-tants are included. So, maybe the veteran Senator Harrison has a two-fold purpose in mind, and it takes courage for him to have either one of the two ideas because he is in politics. Maybe he sees the necessity for substantial curtailment of federal spending and realizes at the same time that the life of a politician who opposes spending is a hard road. But if the average citizen is touched by some new taxes, he will not be half as anxious to support the candidate candi-date who promises pork, projects and patronage anything that sends money back into the home district. I would just hazard a guess that the amiable and very clever Senator Sen-ator Harrison is going about the latter lat-ter job in the only way that it can be accomplished. I give him praise and wish him success, for preservation of our government is of considerably more moment than a few political lives. This Is ISo Joke to Bankers of Country Some time ago, I reported the existence ex-istence within administration policies poli-cies of quite contradictory plans. Here is a new one, and one that to me is quite laughable. It probably is not at all humorous to the bankers bank-ers of the country, whether they be big bankers or little bankers in small towns. Of course, bankers do not always have a sense of humor; nevertheless, I believe they may be forgiven for failing to laugh at this new condition. To have a clear understanding of the circumstance, it is necessary to line up the several developments in the order of their appearance as government or administration policy. pol-icy. First, it will be remembered how President Roosevelt ordered all banks closed (and some stayed closed) at the beginning of his administration. ad-ministration. He followed that with legislation by congress that placed new restrictions on how the banks could loan money. It was a pretty good law since it prevented some sharp practices of which some bankers bank-ers had been guilty. On top of this law, some 10 or 12 months later, Mr. Roosevelt lambasted lam-basted the bankers for not making loans to business. He charged them with locking their vaults, called them cowSrds and what-nots, trying to force money out into the channels of trade when there were few business busi-ness men doing enough business to pay interest on the money they were using. Then, the urge came for deposit insurance. Mr. Roosevelt was not enthusiastic about any federal deposit de-posit insurance scheme, but Senator Vandenberg, Michigan Republican, had developed a terrible desire to have it. He forced it through congress, con-gress, and Mr. Roosevelt signed the bill. I think the time will come when the country will regret that law, but that is neither here nor there. It is on the statute books, and the federal deposit insurance corporation has a function to see that banks are properly run. Another Depression Was the Result There came the time when Mr. Roosevelt's policies failed to work any better than those under President Presi-dent Hoover, and we had another depression on our hands. Mr. Jesse Jones, chairman of the Reconstruction Reconstruc-tion Finance corporation, either of his own volition or by White House urging, made several speeches and statements to the bankers as the depression de-pression got really bad. He sought to stem the tide by persuading the bankers to make more loans. Some of us here got the impression that Mr. Jones wanted the bankers to shove out the money and ask later on whether they cojdd get it back. Anyway, the sum end substance of the situation was that Mr. Jones was urging the banks to find ways to loan money. Then came the climax, the peak, and the laugh. Hardly had Mr. Jones concluded his series of lec-. lec-. tures to the bankers (who, according accord-ing to the Jones picture, really did not want to make money) when another an-other government agency gets into the play. The Federal Deposit Insurance In-surance corporation had something to say about the bankers, and Chairman Chair-man Crowley issued a statement to all and sundry bankers. Said Mr. Crowley, in substance: Bankers, the FDIC insures your deposits de-posits up to $5,000 per depositor; thus they are protected. But that dots not mean you can take a chance on unsound loans. You can't take any greater risk than you would if there was no Insurance of the deposits. Just remember that, boys; be careful and don't stub your toesl C Western Newspaper Union. |