No Ways, No Means

After much brewing and stewing, the House Ways & Means Committee finally had its 1944 tax medicine about ready for bottling this week. The dose:

> No increase in personal income taxes.

> No sales tax.

> No increase in corporation income taxes.

> Higher first-class postal rates (3-c- for local mail, 4-c- for out-of-town, 8/-c-for air mail).

> A 95% (up from 90%) tax on excess profits. This will cost corporations about $616,000,000 more a year.

> Higher excise taxes. These will cost the public about $1.5 billion.

Although this formula must still filter through House & Senate, it was clear that the public would be able to swallow the final mixture with an easy gulp. In a pre-election year, the Ways & Means Committee was unwilling to find ways & means to raise the $10.5 billion in new taxes recommended by the Treasury, was eager to settle for around $2 billion. And the Administration, by fumbling the job of showing why tax increases are necessary, had given Congress an unusually good excuse for preferring politics to economics.

The Congressmen, in their haste to have done with the whole thing, brooked no argument. Budget Director Harold D. Smith, trying as a patient civil servant to argue for the Treasury program, found the Ways & Means Committee an impatient listener. (Said one jocular member: "Mr. Smith came to town and after a couple of Democrats got through with him it was Good-bye Mr. Chips.") Chairman Marriner Stoddard Eccles of the Federal Reserve Board, who tried to convince the Committee that nothing less than $13.8 billion in new taxes would stave off inflation ($6 billion to be re fundable after the war), heard his program branded as "amazing," "fantastic."

At week's end the Administration was ready to concede defeat. First sign of collapse: the Treasury's Tax Expert Randolph Evernghim Paul prepared to resign at the first graceful opportunity; and failing that, just to resign.

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