TAXES A LA ROOSEVELT

Goaded to action by the discovery that the House tax bill permits many million-a year firms to dodge all federal income taxes, the Senate Finance Committee has begun to reform Roosevelt's latest brain child. Disregarding administration duress, Chairman Harrison has demanded complete information on the proposed levies before reporting to the Senate.

The history of the tax bill has been a sad commentary on legislative procedure under the Roosevelt regime. Early in the current session, Roosevelt sent a message to Congress seeking $600,000,000 additional revenue and presented the House with a proposal to levy prohibitive taxes on undistributed income. Despite the reasonable arguments of Messrs. Sibley, May, and Houston, the House held only perfunctory hearings on the bill. The 240 pages of legislation, embodying an entirely new departure in our theory of taxation, were at no time carefully scrutinized by House legislators. Mindful that it is easiest to mend political fences with federal posts, the Representatives yielded to the clock-room arguments of James Aloysius and rolled the measure through the House.

After Senator Harrison, Chairman of the Senate Committee on Finance told the present that Senate Democrats wouldn't stomach the unamended Act in its current garbled form, Morgenthau's attempts to defend the bill have been tragic. Committee hearings disclosed first-that. Treasury experts had made absolutely no accurate estimates of the revenue available under the new taxes; second-that in practice the taxes would favor big corporations against the smaller firms; third-that the measure would increase the difficulties for firms with impaired capital and would be disastrous to the small, growing firm; fourth-that there were so many loopholes in the bill that a John Davis could drive the wooden horse of Troy through its provisions.

Corporate taxes strike at the very vitals of American industry. While it is inevitable that the burden for relief should be borne by the corporations it is only logical to argue that those taxes should be simple, carefully drawn, weighing equally on all firms, and passed only after penetrating scrutiny by Congressional legislators.