Taxes 1942, 1

Yesterday the President signed the largest, most extensive tax bill in the History of the nation. As a war measure it is a failure. And it was only for a nation at war that such a revenue bill was conceived. That it is extensive and the largest on record is no tribute to its name. A country that sets for itself the double goal of developing into a world arsenal and defending itself from two relentless enemies needs maximum financial support if the home front is to withstand the shock and the arsenal to become a reality. The trouble is the measure is not strong enough. The Congress after seven months of dilly-dallying and haggling has given the country a half-baked, business as usual, partisan tax bill, and this after eleven months of global war.

It has failed in three main objectives: to raise sufficient revenue, to check inflation, and to tax democratically according to ability to pay. The Treasury asked for schedules that would yield at least 15 billion dollars. The bill provides for approximately $6,800,000,000, not even half what the fiscal experts, who must finance the war, demanded. Left untouched by taxation or what the public normally could spend on consumers goods are 18 billion dollars threatening to whirl the country into an inflationary spiral. It was part of this amount that the treasury hoped to get, or discourage from exchange with its ill-fated spendings-tax. And lastly, the largest revenue groups, the upper two-thirds income brackets, have not been taxed to their capacity. But a married man earning only$12 a week, no matter how many children he may have, most pay a 5 per cent tax on his entire income with no deductions of any kind. He pays the same per cent on his sub-standard wage as the millionaire does on his income. This is called the "victory tax." More truthfully, it is equality in democratic reverse. The Senate ignored entirely any surtax on luxury spending and the body as a whole once again has declined to levy taxes on State bonds. Large proportions of these incomes find hideaway refuge behind the skirts of the States to thumb their noses at the Federal Treasury.

Admittedly the 1942 Revenue Bill is not at all bad. It has commendable features such as the collection at the source of the "victory tax" and its refund provisions. But for the times it is dangerously inadequate. When the nation needed a fair, realistic tax bill Congress yielded but little. All the old jockeying and log-rolling accompanying any peace-time legislation were the tools that produced what was supposed to be a statesmanlike, toothy war bill. But undoubtedly in a few months it will have to be scrapped for a warlike measure.