Looking Backward

Last week the U. S. Treasury issued a breakdown of income-tax returns for the depression year 1938. Set against the returns for previous years, they all but completed the pattern of a decade's economic change.

Since Coolidge's time, the number of taxpayers has grown, but not the amount of taxable income. In 1928, 2,523,063 taxpayers reported $21,032,000,000 of taxable income. In 1932, 1,936,095 taxpayers* reported only $7,920,000,000; in 1937, 3,371,443 taxpayers reported $15,264,000,000; in 1938, 3,048,545 taxpayers reported $12,672,000,000. Income from corporation dividends went down more slowly than total income, came back more slowly too: $4,351,000,000 in 1928, $1,972,000,000 in 1932, $351,400,000 in 1937, $2,462,000,000 in 1938. Interest from taxable securities, bank deposits, etc. never came back at all: $2,184,000,000 in 1928, $1,502,000,000 in 1932, $1,135,000,000 in 1937, $1,063,000,000 in 1938. Reasons: the decline in ordinary bond yields and bond issues, the flow of funds into tax-free Government securities.

Income-tax receipts did not keep pace with the number of taxpayers: $1,164,254,000 in 1928, $329,962,000 in 1932, $1,141,569,000 in 1937, $765,887,000 in 1938. Neither did the number of the very rich. In 1928 there were 511 incomes of more than $1,000,000, 15,977 of more than $100,000. In 1932 there were only 20 of the first, 1,836 of the second; in 1937, 49 and 4,150; in 1938, 57 and 2,474.

* Exemptions were lowered in that year from 3,500 (man & wife) to $2,500, and from 1,500 (single) to $1,000.

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