Men at Work

The House Ways & Means Committee concentrated last week on ways & means to get more blood out of the taxpayer-turnip. They sat deaf as beetles to dire warnings of moral disaster from the eight "community property" States*. The eight States had argued (getting a little blue in the face) that a change in the tax laws to require joint income-tax returns would cause more divorces and force men & women to live in sin. But committee members, hard-pressed by the revenue-hungry Treasury, were concerned more with cash: $325,000,000.

Grinding away at their terrible chore, piling up bits of revenue here & there for the 1943 tax bill, the committee:

> Cut personal exemptions for a married couple from $1500 to $1200, for single persons from $750 to $500. This would add some 9,000,000 new taxpayers, making a grand total of some 30,000,000.

> Turned down the Treasury's request to cut the exemption for dependents from $400 to $300. They also refused to eliminate the 10% earned-income credit, to tax State and municipal securities, to eliminate the 27 1/2% depletion allowance on gas and oil wells and mines.

Biggest hump ahead was the personal income-tax rate. Still under consideration was Secretary Morgenthau's newest proposal: to have all who file a return pay a $5 head tax. The sales tax was asleep under an anesthetic that might wear off at any moment. Latest anesthetist was Price Boss Leon Henderson, who argued that the heaviest burden of a sales tax would fall on "persons whose standard of living is already below safe levels." But, while no one wanted to wreak injury on the very lowest income group, most New Dealers now argued that a sales tax was perhaps the most powerfully effective way to cut down the big new bulk of inflationary purchasing power. Shelved for a month at least was the plan for enforced savings: for one thing, Congress wants to get back home pretty soon for a two-month vacation and political fence-mending.

*Where husband & wife may split their income in separate returns and thus save on high surtaxes. They are: Arizona, California, New Mexico, Nevada, Idaho, Louisiana, Texas, Washington (same provision optional in Oklahoma).

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