Show M history s biggest tax bill bil 1 1 x 1 can t meet war demands S N ia 1 required savings smaller tax exemptions seen as partial solution to inflation threat by BAUKHAGE news analyst and commentator why dont you commentators quit trying to wake the people up to ther the war and try to wake washington up a question which repeats itself in my listener mail day after day so help me I 1 know the people dont need waking up and I 1 to decide whether washington Is snoring or just breh breathing thing deeply let me say first arst of all that I 1 know that a large part of washington is ia awake and burning the midnight oil and remember that means 2000 business men drafted into service as well as the government officials the MAJORITY of whom are nonpartisan non partisan men who have worked through both republican e uble and democratic regime but let me go on from there and talk about some of the whom you nor I 1 nor big ben nor an air raid alarm could wake up if they had gone to bed after six cups of coffee and the radio on I 1 am talking again about abou t what washington is talking about today the tax bill now in congress gr ess and inflation in general the biggest tax bill in our history any calm cool instructed thinker thinks nearly big enough why well some bay because the fiscal policy makers of the nation dont seem to io be much more ar conscious than the home guard before pearl harbor now lets leti get a few facts straight there are men in the treasury department part ment and sitting on congressional committees dealing with fiscal matters who know their monetary onions as well as a farmer knows the rows he hoes but let us proceed from there about a year and a half ago leon henderson who no matter what you may think of his neckties his manners or his tactfulness is pretty good at foresight echoed the thoughts of perhaps a hundred other men in washington when he warned against inflation one oneff of the many brakes on inflation is taxation taxation of course is an ancient process another method not so ancient is compulsory savings henderson favored compulsory savings so did a lot of others he said so he tried to convince bonvin ce mr but mr shuddered that was totalitarian regulate Heg prices what you pay out all right but dont tell a free american citizen what he has to put in his sock totalitarian henry Morge nihau never said those words to me but one of his close associates did well henderson in one oi of his tactless moments a year and a halt half ago commented on mr morgen thaus opinions on compulsory savings not for the record he said in effect henry is perfectly willing to have me put a gestapo in every grocery store but he thinks its hitlerism to force people to save or buy bonds those his exact words but those were his sentiments I 1 quote them not because mr henderson knows everything but because he talks with a punch I 1 might also add that there appeared a year ago an article from the pen of reserve board chairman eccles entitled rice price ceilings are not enough in which he expounded the thesis that money must be taken out of cf th the e easy spenders pockets or inflation would result one third of the way today we have hav e a tax bill which stands seven months after pearl harbor as incan incapable able of meeting the exigencies of w war ar as manila or singapore were it is true that expenses have shot up more rapidly than was expected although many say this should have been foreseen and now we are lucky if we can pay one third of our way way daniel bel beal undersecretary of the treasury said that 24 billion dollars of the national expends expenditure would bo be handled with borrowing not all from the banks this year secretary had refused to answer a question on that point inthe in the senate committee hearings when senator taft put it to him but turned it over to bell taft protested that he wanted as the policymaking policy making head of the department to answer then said he would stand behind bells prediction it is true that the house cut the tax bill as submitted by the treasury the treasury asked for and got from the house the senate is being urged to restore the cuts but the treasury program itself was far too small mall the experts say at present calculations the governments income tor for the fiscal year 1942 43 will be around 24 billion dollars whereas its outgo will be in the neighborhood of 77 billions if after pearl harbor the government had asked tor for the maximum it needed the country would have been only too glad to submit As my correspondents say the country need to be waked up washington does critics of mr and his program say too little and too late they say too little because the difference between outgo and income co me for the fiscal year ending in 1943 will be at least 53 52 billion dollars nonnegotiable non negotiable bonds they say too late because insufficient measures have been taken to check inflation and one way inflation can be checked Is to get right after the spending money and make it saving money by forcing the peo I 1 i pie to invest in nonnegotiable negotiable non bonds that cant be cashed in until after the war A lot of people are going to need spending money again when peace comes until industry is converted back from war production to civilian production As one man connected with the federal reserve board said to me there is one thing that very few people realize when the government or anyone else borrows from the bank new money is created that makes inflation there is plenty of money in existence now to pay war expenditures and avoid the fatal error of borrowing from the banks banki the difficulty now is that the dollars which pre the most dangerous in bidding up prices and causing inflation are the dollars in the pay envelopes of the workers worker s of industry and these dollars are are not as far as we carf can estimate the dollars that are buying bonds and another thing the taxes dont reach these dollars either what we may aswell realize I 1 is coming though not co coming m ing as soon sogn as it should is one compulsory savings although we wont use that unpleasant word compulsory it will probably be a require requirement me rit to buy bonds bond snot not redeemable until after the war var and so staggered that they wont all hit the treasury at once two a smaller tax exemption ab so that we will get the loose dollars from the lower income brackets there are more of those dollars to get three there will have to be some leniency for the fixed salary man who is already saving the average middle class that puts money into savings regularly in the form of mortgages on homes or farms or plants money into life insurance policies money into pension plans that is savings it is not creating inflation but that man manewith man with the high taxation those in his income brackets have to pay has to go to the bank and take the money from the savings which he has there to turn it over government canada has faced this problem the united states will have to war production is ahead of schedule fiscal thinking is lagging behind we can see a year after mr eccles said so that price ceilings are not enough increased costs are such that the packers as the canners before them have announced that they just wont stay in business if they have to operate at a loss the p price rice of the finished prod product act has a ceiling but the raw materials and wages cages have no felings cei ce ings lings somebody has to corral those dolla dollars rs 4 urban residents tank rank highest in the proportion rop of college graduates in the population with 67 57 per cent as compared with 42 per cont cent for rural non farm and 13 per cent for rural farm groups groups according to information collected by the department of commerce in the 1940 census |