Unanswered Questions

The best that can be said of the 1943 tax bill, now being put into legal language for presentation to the House, is that it is the biggest, toughest tax measure ever adopted by the House Ways & Means Committee. But it leaves at least three major questions unanswered.

Is It Enough? As the bill finally left the committee, it was, by the Treasury's computation, $2.7 billion short of the Treasury's $8.7 billion goal. At the last minute the committee--with Presidential permission--reversed itself, killed mandatory joint returns, thus sliced away an estimated $430,000,000 in revenue.

What of a Sales Tax? Although the committee had killed the sales tax, agitation for its reinstatement began immediately. Both in & out of Congress many felt that such a tax was necessary to make up the difference asked by the Treasury, and, more important, to tap the inflationary danger of increased wages.

What of Enforced Savings? The committee, although it adopted a withholding tax, did not touch the question of compulsory savings, on the plea of Treasury Secretary Morgenthau that the voluntary sale of war bonds should be given a full and fair trial. Latest reports were that the country was some $150 million below the $800 million war bond quota for June. The Treasury, however, felt certain that, with increased pressure, the $1 billion quota for July and succeeding months would be reached. But proponents of enforced savings argued that even the sale of $6 billion in war bonds in the remainder of the year would not close the conservatively estimated $17 billion inflationary gap.

Best opinion was that the House, allowing time for possible "too little & too late" criticism, would pass the bill as it now stands. Then it will go to the Senate Finance Committee for a thorough reworking. But with September seemingly the earliest date for final passage, the Government was daily losing revenue on increased excise taxes which will take effect only when the bill becomes law.

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