A Tax for Everyone

A Federal sales tax is in the works. The entire body of New Deal thinking, which long opposed sales taxes as a burden on the poor, has switched completely. In the U.S. war economy, with its new rich and its new poor, only a tax on the low-income groups can provide new revenue for arms production and drain away the real bulk of inflationary purchasing power. Putting a $25,000 ceiling on incomes would leave both problems untouched.

In the Administration, only President Roosevelt and Secretary of the Treasury Morgenthau still held out last week against the sales tax; and in his seven-point anti-inflation program, even the President talked of sales taxes or of compulsory savings that would also hit the new rich.

One economist's estimate is that the farmer and labor groups, whose 1939 income was about $45,000,000,000. will be earning at the rate of $80,000,000,000 by this year's end. Out of this $35,000,000,000 increase, the present Federal taxes and all the proposed tax increases would catch only some $1,500,000,000; according to this figuring, the total Federal tax bill on the $80,000,000,000 would be only $5,000,000,000. Meanwhile there is not much blood left in the rest of the turnip: business and businessmen who will be earning $35,000,000,000 by year's end (up only $5,000,000,000 or so over 1939), will pay $20,000,000,000 --60% --to the Government.

Said Pundit Walter Lippmann: ''About half of all consumption goods . . . are bought . . . by the great mass of people who have small incomes. . . . Until there is a tax bill which reaches the lower incomes, which have recently been in the aggregate greatly increased, and until there is a compulsory savings plan, the Administration ought not to pretend that it is dealing with inflation. . . ."

Said Columnist Raymond Clapper: "The classic popular argument against the sales tax is that it bears more heavily upon the poor than on the rich. That is its effect without the slightest doubt. . . . But now we get at the rich through the income tax. They pay far more heavily than the poor, proportionately. . . . The other half of the job is to get at the expanding buying power now going into the lower-income groups. . . . The only practical way left to get at this money is through sales taxes and compulsory savings. Five years ago that was a reactionary program. Now it is a New Deal necessity." The public agreed: this week a Gallup poll showed 54% ready for a 2% sales tax, 46% for 3%, 43% for 5%.

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