| Show I r 5 E C F or History's J Biggest Tax Bill Cant Can't r Meet War Demands r 4 t r V- V Required Savings Smaller Tax Exemptions I Kp I IO O Seen as Partial Solution to toi j. j i Inflation Threat It V r By BAUKHAGE News New Analyst and Commentator 1 Why dont don't you commentators quit trying to wake the people up j to the war and tt to try to wake Washington Washington Wash Wash- x ington up That's a question which repeats Itself It Itsel Itself It- It self sel in my listener mail day after day So help me I know the thc people dont don't need waking up And who am amI f I to decide whether Washington is snoring or just breathing deeply Let me say first of all that I know that a large part of ot Washington Washington Washington Wash ington is awake and burning the I midnight oil And remember that means 2000 business men drafted into service as well as the government government government govern govern- ment ment officials the MAJORITY of whom are arc partisan non-partisan men who have worked through both Republican can and Democratic regimes But let me go on OD from there and andt t talk lk about some of the whom you nor I nor Big Ben BCD nor noran noran an nn raid air-raid alarm could wake up if they bad gone to bed after six cups of coffee and the radio on I am talking again about what Washington is talking about today today- specifically the tax bill now DOW in congress congress congress con con- gress and inflation in general The biggest tax bill in hi our history any calm cool instructed thinker thinks isn't nearly big enough Why Well some say because the fiscal policy makers of the nation dont don't seem to be much more war conscIous conscious conscious con con- than the home guard before Pearl Harbor Now lets let's get a few facts straight There are men in the treasury department department department de de- de- de and sitting on congressional r al 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 mannerS manners man man- ners or his bis tactfulness ulness is pretty good goodat at foresight echoed the thoughts of perhaps a hundred other men in Washington when he warned against inflation tion One of the many brakes on in a tion-is tion taxation Taxation of course is an ancient process Another method method method meth meth- od n not t so ancient is compulsory savings Henderson favored compulsory savings So did a lot of others He said so He tried to convince Mr but Mr shuddered That was totalitarian Regulate prices what you pay payout out all right but dont don't tell a free American Ameri meri- American Ameri- Ameri merican can citizen what he has to put in his sock That's totalitarian Henry Henry Henry Hen Hen- ry never said those words to me but one of his bis close associates did Well Henderson in one of his tactless tactless tactless tact tact- less moments a year and a half halt ego ago commented on Mr Morgen Morgen- thaws thau's opinions on compulsory savIngs savings sayIngs sav say ings not for the record He said In effect Henry Is perfectly willing willing will will- ing tog to have me put a gestapo in 1 every grocery store but he thinks its it's Hitlerism to force people to save or buy bonds Those weren't his exact words but those were his sentiments I quote them not because Mr Henderson knows everything but beca because se he talks with a n punch I might also add that there appeared a year ago agoan agot i t an article from the pen of Reserve Board Chairman Eccles entitled Price Ceilings Are Not Enough in which he expounded the thesis that money must be taken out of the easy spenders' spenders pockets or inflation inflation tion would result i Third One-Third of the Way Today we have a tax bill which stands seven months after Pearl Harbor as incapable of meeting the exigencies of war as Manila or Singapore were It is true that expenses have hav shot up more rapidly than was expected although many say this should have been foreseen And now we are are r lucky it if we can pay third one-third of ot our way Daniel Bell undersecretary undersecretary undersecretary tary of th the treasury said that 24 bilI billion bil bil- I lion dollars of the national expenditure expenditure expendi expends ture tune would be handled bandied with borrowing borrowing borrowing borrow borrow- ing not all from the banks this 0 year Secretary had refused refused refused re re- fused to answer a question on that S point in the senate committee hearings hear bear bearings hearings ings when Senator Taft put it to him but turned it over to Bell Taft Taftt t J protested that he wanted Morgen Morgen- r i thau as the m policy making king head of the department to answer Morgen Morgen- thau then said he would stand behind behind behind be be- hind Bells Bell's prediction It is true that the house cut the tax bill as submitted by the treas treas- ury The treasury asked for and got from the house The senate is being urged to restore the cuts But the treasury treasury treas treas- ury program itself was far too small the experts say At present calculations the governments government's income Income Income In in- come for the fiscal year 43 1942 will be around 24 billion dollars whereas its outgo will be in the neighborhood of 77 billions It U after Pearl Harbor the government government government govern govern- ment had asked for the maximum it needed the country would have been only too glad to submit As my correspondents say the country country country coun coun- try didn't need to be waked up Washington does docs Critics of ot Mr and his program say too little and too toola la late te They say too little because the difference between outgo and income Income Income In in- come for the fiscal year ending In 1943 will b be at least 53 billion dollars Non-Negotiable Non Bonds They say too late because in insufficient insufficient insufficient in- in sufficient measures have been taken to check inflation and one way inflation inflation inflation tion can be checked is to get right after aCter the spending money and make it saving money by forcing the people people people peo peo- to Invest in non-negotiable non bonds that cant can't be cashed in until after the war A lot of people are arc going to need spending money again when peace comes until industry is converted converted converted con con- 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 government government govern govern- ment or anyone else borrows from the bank new money is created that makes inflation There is plenty plen plen- ty of money in existence now to pay war expenditures and avoid the fatal error of borrowing from the banks The difficulty now is that the dollars dollars dollars dol dol- lars which are the most dangerous in bidding up prices and causing inflation inflation inflation in in- are the dollars in the pay envelopes envelopes envelopes en en- of the workers of Industry And these dollars are not as far as we can estimate the dollars that are buying bonds And another thing The taxes dont don't reach these dollars either What Wha t we may as well realize is coming though not coming as soon as it should is One compulsory savings although we wont won't use that unpleasant word compulsory It will probably be a requirement to buy bonds not redeemable until after the I Iwar war and so staggered that they wont won't all hit the treasury at once I T Two o a smaller tax exemption 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 average average av av- av- av middle class that puts money into savings regularly in the form of mortgages on homes or farms or plants money into life me insurance polIcies policies policies pol pol- money into pension plans That Thatis is savings it is not creating tion But that man with the high taxation those in his income brackets brackets brackets brack brack- ets have to pay has to go to the bank and take the money from the savings which he be has there to turn it over to the government Canada has faced this problem The United States will have to War production is ahead of schedule fiscal fiscal fiscal fis fis- cal thinking is lagging behind We can see a year after Mr Eccles Eccles Eccles Ec Ec- cles said so so that price ceilings are not enough Increased costs are such that the packers as the canners canners canners can- can ners before them have anno that they just wont won't stay In business If 11 they have to operate at a loss The price rice of the finished product has a ceiling but the raw materials and wages have no ceilings Somebody Somebody Somebody Some Some- body has to corral those dollars Urban residents rank highest Inthe in inthe inthe the proportion of college graduates in n the population with 57 per cent centa a as cO with 42 per cent for tor rural non and 13 per cent for tor rural-farm rural groups according to information information information in in- formation collected by the department department depart depart- ment of commerce in hi the 1940 census |
