Remote Control (Cont'd)

"When do we eat? We want action!" screamed a score of Communists one night last week as they shoved past a police cordon into Manhattan's East 65th Street and took up a defiant stand before the brownstone house of President-elect Roosevelt. Being photographed on the steps of the house were five Senators and six Representatives, Democrats all, who had just arrived from Washington for a party conference with their national leader. The Communists shook fists, hooted, yelled. The Congressmen beat a quick retreat inside the Roosevelt home. The police with many a fisticuff and nightstick thwack cleared East 68th Street. All was again quiet when Mr. Roosevelt and his visitors settled down comfortably in an upstairs study for a heart-to-heart talk.

Mr. Roosevelt's efforts at remote control of Congress from Albany week before had produced mostly confusion and misunderstanding between him and his Washington followers. To clear up difficulties and develop a Congressional program which might avert a special session after March, he had summoned to his Manhattan home Speaker Garner, Democratic Senate Leader Robinson, Senators Harrison, Pittman, Byrnes and Hull, Representatives Rainey, McDuffie, Collier, Byrns and Rayburn. Also on hand were Democratic Chairman Farley, Professor Moley of the "Brain Trust" and Col. Howe, the President-elect's alter ego.

All were agreed on passage of a beer bill and repeal of the 18th Amendment. Mr. Roosevelt could not give his conferees much help on the Domestic Allotment bill before Congress because, he smilingly explained, he had not read that farm relief measure and so did not know what was in it. Budget-balancing supplied most of the meat for the conference.

The President-elect began by accepting President Hoover's own estimate of the 1934 deficit--$492,000,000.* His conferees promptly told him that this was a gross understatement as it anticipated full War Debt payments and was based on revenue estimates by the Treasury which he had flayed in his campaign as misleading and erroneous. But Mr. Roosevelt had no heart for making his job any harder by assuming a larger deficit than his predecessor calculated. He began to cast about for additional receipts with the following results:

Beer tax $125,000,000 Gasoline tax 137,000,000 New Economies 100,000,000

$362,000,000

Whence was to come the extra $130,000,000 to balance the next budget? Nobody wanted to increase excise ("nuisance") taxes. A levy on interstate truck traffic was a shot in the dark. The President-elect had barred the sales tax. Out of much talk evolved a proposal to fall back upon the income tax as the only likely source of new revenue. When the conference broke up near midnight Speaker Garner and Senator Robinson outlined almost in unison the following plan:

Exemptions for married taxpayers would be reduced from $2,500 to $2,000.*

Boosts in the normal tax from 4% on the first $4,000 income and 8% above that to 6% and 12%.

Such increases, which might be made retroactive on 1932 incomes, would put taxes back to their Wartime peak. They represented an approximate upping of 50% in rates for taxpayers with incomes of $10,000 per year or less. Under this Democratic plan, surtaxes would not be changed.

Within 12 hours after its announcement President-elect Roosevelt found himself the centre of a party revolt. His latest attempt at remote control had stirred small taxpayers everywhere to a frenzy of anxiety. The country, which had not yet paid its income tax under the new 1932 rates more than doubling those of 1928, was confronted with even more drastic increases. Was this, it asked, part of the "New Deal"? Was the "forgotten man'' once more forgotten?

Mr. Roosevelt hastened to explain obliquely that the proposal for increasing the normal tax originated not with him but with his Congressional visitors. Nevertheless he was ready to stand by the conference plan.

When his conferees got back to Washington, Democrats swarmed about them with hot protests. Utah's Senator King exclaimed: "It looks as if the Democrats haven't got the courage and stamina to fulfill their platform pledges and make the promised 25% reduction in expenditures." Senators Long and Connally vowed that they would never support tax legislation which did not also raise surtaxes on larger incomes. Representative Snell, Republican leader in the House, took advantage of the confusion to remark: "The new Democratic motto is 'Soak the poor.' Last session it was 'Soak the rich.' Now they propose to load everything onto the small income taxpayer."

Senators Harrison and Byrnes were among the few who attempted any defense of the tax-upping scheme. Their arguments 1) married men extremely lucky to be getting a $2,500 exemption; 2) a broadening of the tax base would increase political pressure for economy; 3) the rich would pay the higher normal rate as well as the less well-to-do.

Other Democratic leaders began like good politicians to back away from their tax plan. Speaker Garner talked of another tax plan he had up his sleeve which would not be "quite so painful" as upping the normal rates. Majority Leader Rainey pooh-poohed the idea of passing any new tax legislation at the present session while Chairman Collier of the Ways & Means Committee spoke of it as a "last resort." The Democratic position shook down to this: If President Hoover signs a beer bill, increased income taxes may not be necessary; if he vetoes it, taxpayers can blame him for added burdens.

Widespread was the opinion that the Roosevelt tax plan had been sent up largely as a "trial balloon" which the country's disapproval had promptly punctured. Another suspicion was that it had been started to create a popular backfire for a sales tax.

*The 1933 deficit at the half-year stood at $1,159,286,502. Gone is any hope of balancing this year's budget. -Speaker Garner talked of reducing single exemptions from $1,500 to $1,000 ignorant of the fact that such a cut had already been made in the 1932 Revenue Law.

This file is automatically generated by a robot program, so reader's discretion is required.