Indianapolis Times, Indianapolis, Marion County, 31 December 1940 — Page 9

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TUESDAY, DEC, 31, 1940

SECOND ‘SECTION

. Tax-Exempts tN F ASHINGTON, Dec. 31.—The Treasury is mar-

shaling facts and arguments to support its drive, in the Congress that meets Friday, to tax the interest from all future issues of Government securities, :

Although elimination of taxexempt bonds has been advocated by Secretaries of the Treasury since Andrew Mellon’s day, it now appears that Secretary Morgenthau is really going to bat, backed by the full power of the Administration. The fight for abolishing taxexempts may be a curtain-raiser to the much-needed dverhauling of the entire Federal revenue system. Mr. Morgenthau will encounter opposition, not only -from those who oppose taxing Federal securities, but more especially ; fom local ped state governments : al now issue their bonds free from state and Federal income taxes. ot Behind the Secretary, however, will be the opinion anany experts that tax-exempts must be eliminated _.belore our Federal revenue structure can ever function any on Je ability-to-pay pinciple. ere 1s one example of hi ion BPeutal boron p. ow tax exemption confers Taxpayer A is a resident of New York State, and income from his business last year was $224,441. Also, he received $880,408 in interest from wholly tax-

exempt bonds. This would gi i i LL ply give him a net income of

Committee Is Critical

On the $224,441 He would pay, according to 1940 rates, a New York State income tax of $17,441. Then he would pay a Federal income tax of $116,586. His total Federal and state income tax: $134,027. However, if that $880,408 in interest from Government bonds had not been tax-free, this same Taxpayer A would have had to pdy Federal and state income taxes totaling $818,386—$87,874 to New York State, $730,512 to the Federal Treasury. This is one reason why a recent study of tax-

By Marshall McNeil|

exempt bonds by the Temporary National Economic Committee said: ; “A most reprehensible form of tax favoritism benefiting the wealthy, who need such favors least of any group in the population, is the issuance of tax-exemp Government securities.” By exempting the interest on their bonds from taxation, the Federal, state and local governments have made things pretty soft for a lot of wealthy persons and corporations, Purchasers of the bonds insure themselves against taxes that others pay. Also, their incomes are insured against the ordinary business risks that others take. Moreover, their incomes are not levied upon according to ability-to-pay, and that is the underlying principle of our Federal income tax. They have the ability to pay, but they don’t pay, recause their income gets favored treatment since it comes from governmental bonds.

Another Example Cited

Here's another example that shows how favoritism is extended to persons who invest in tax-exempt bonds: Take Taxpayer A again. He has a total net income of $1,104,849, of which $880,408 comes from the interest on tax-exempt bonds. His Federal and state income taxes total $134,027, so he has a net income (after taxes) of $970,822. To achieve that same net income (after taxes) from sources other than tax-exempt bonds, he would have to have a taxable net income of $4,914,653. ~ In other words, the taxpayer who takes the business risks, and whose total income is from taxable sources. would need a taxable net income more than four times as great as Taxpayer A, if, after paying his State and Federal taxes, he wanted $970,882 left in the kitty. Or, to say it another way, Taxpayer A had as much net income left from wholly tax-exempt securities yielding 2% 7% interest as had the taxpayer who invested in industrial securities yielding 13.3%. A Senate committee that recently investigated the question of tax-exempts, and recommended that they be eliminated, heard one witness say: g “We cannot profess to be taxing in accordance with ability to pay while we are offering a wide loophole to our wealthy citizens to avoid the application of this principle of investing some of their wealth in wholly exempt securities.”

Inside Indianapolis (4nd “Our Town”

THE HAPPIEST PEOPLE IN INDIANA over the license ‘deadline extension to March 1 are the State Police. They heaved a collective sigh of relief when the executive order by Governor Townsend released them from the almost impossible task of trying to enforce a law without local cooperation. \ Since both the Governor and overnor-elect Schricker stated emphatically several times that the Dec. 31 deadline. would stand, yesterday’s action came as a surprise to some. There were three things that caused them to change their minds. First was the failure of many small communities to go along with the idea. Second was the political pressure from several of . the more populous counties. : Third was the fact that it’s almost physically impossible to sell 1,000,000 auto tags in three weeks, even with 100 per cent co-operation of the consumers. A fourth reason might be that a majority of the people were frightened into buying their plates early and even if the pesky Republicans do take over the license business in a hurry there won’t be much of . that $350,000 melon left for them.

It’s Not True Again

- YOU CAN TELL IT'S ALMOST Jan. 1, because the rumor that Police Chief Mike Morrissey will resign after the first of the year is making its annual rounds now. We heard it three times, and then decided to ask the Chief. “What,” he exclaimed, “again? - still is—I'm not resigning.”

= Just Like Shucking Corn

ADD COLORFUL DESCRIPTIONS: Governor Townsend, describing his reactions to four years as

Well, my answer

‘Washington

WASHINGTON, Dec. 31.—In his fireside chat, which he described as a “talk on national security,” President Roosevelt indicated his intention of backing the British in a war to a finish with the Nazis—“There is far less chance of the United States getting into war, if we do all we can now to support the nations defending themselves against attack by the Axis than if we acquiesce in their defeat, submit tamely to an Axis victory, and wait our turn to be the object of attack in another war later on.” Mr. Roosevelt excluded the idea of appeasement or of a negotiated peace—“‘we know now that a nation can have peace with the Nazis only at the price of total surrender. . . Is it a negotiated peace if a gang of outlaws surrounds your community and on threat of extermination makes you pay tribute to save your own skins?” Mr. Roosevelt said there was no demand for sending an American expeditionary force outside our own

borders, and that there was no. intention by -any °

member of the Government to send such a force— “you can, therefore, nail any talk about sendling armies to Europe as deliberate untruth.”

# s ]

Silent On the Navy

He omifted any discussion. of whether our Navy will be used,” and made no reference to the controversial questions of sending convoys, turning over more destroyers to England, expropriating neutral

ships laid up in our harbors, or financing aid to

Britain. As to what share of our production would go to Britain, Mr. Roosevelt said we would furnish “far more” material support in the future than in the past bup that “the decision as to how much shall be sent abroad and how much shall remain at home

WASHINGTON, Monday.—As I walked down Fifth

Ave. in New York City, yesterday aftcrnoon, I could not help being amused by little incidents" along the

roller skating, recognized me. With the joy of devilment in his eye, one of the youngsters pulled up in front of me with a grand swirl and said: “Hurrah for Willkie.” I imagine he had no idea how funny he was, but I went chuckling down Fifth Ave. and remembered what pleasure it would have given me if at that age I could have thought of something which I considered really clever by which to annoy my elders. A little further down, a woman, ‘hesitating before crossing the street, caught sight of me and came over rather shyly, saying: “May I shake hands with you, Mrs. Roosevelt? I have always liked you.” And so we shook hands and I wished that it might have been a bridge to better acquaintance, for she had an interesting face. Two boys just behind her hook too. ; nay 0 A hangs, or two later I met someone I really knew, ' Connie Ernst, a charming picture with a gay handkerchief “ tied sround her head. She greeted me and we walked two blocks together. Further on, I saw AD elderly gentleman; oh, so immaculately f 2 n ~ + x w

way. Two small boys,

Governor—“Well, it's just like shucking a field of corn. It's a lot of fun to get up early on a frosty morning and go out in the field and shuck corn. Of course, you hurt your hands some times, but it's worth it. And right now I feel like I'm heading down the

last row.”—Add pipe dreams: The report that Allison’s| gi is getting ready to turn out a 48-cylinder motor. That| §

wou'd be difficult for even a Rube Goldberg. . . . The never-say-die spirit: The State Toll Bridge Commission, which saw its plans for buying the New Harmony toll bridge go splutter, is hurrying up plans to build a $1,000,000 bridge at Mauckport. And the Legislature which is expected to knock out the commission meets Jan. 13.

No State House Cleaning

THERE WILL BE NO GENERAL housecleaning when Governor Schricker takes over at the State House on Jan. 13, The new chief expects to make

some appointments—the ones that the Legislature probably won't take away from him. The other officials will just carry on until the Republicans decide who's going to fill the jobs—and it probably won’t be Governor Schricker. Which reminds us that Hugh Barnhart, ABC director and original Schricker man, told reporters the other day: “Well, boys, I hope to be around here working with you for quite a while yet.”

Seen and Heard Around Town

JOHN WHITE retired fr6m the School Board last night after a four-year term. In just seven more days he will celebrate his 88th birthday. . . . John Wallace, son of State Entomologist Frank Wallace, has a parttime job down at I. U. helping a professor measure thousands of gall wasps. For your information, gall wasps are so small they all have to be measured under a powerful microscope. . . . This week’s dancing award goes to Mrs. Sylvester Johnson, with her La Conga that had Indianapolis A. C. dancers ga-ga.

By Raymond Clapper

must be made on the basis of our over-all military necessities.” Everyone should read over the printed text of this address once or twice and become thoroughly familiar

- with it, because this speech lays bare the reasoning

that will guide this Government in dealing with the war during the coming months. : Obviously, Mr. Roosevelt was talking first to the American people, to impress upon them the danger that exists if the Nazis win and the necessity of sacrificing everything to production, with the same effort as if we were at war—“this is an emergency as serious as war itself.” Second, he was talking to the British, to encourage them in their resistance. Third, he was telling the Nazis that the United States regards them as potential enemies and is determined to. aid Britain

in defeating them. ” 8 2

Not War—Not Peace!

Mr. Roosevelt phrased his whole speech in terms of trying to keep the United States out of war. But a situation has developed between the United States and Germany now that is neither war nor peace. Mr. Roosevelt has in effect labeled Nazi Germany as an unfriendly government which mecpraces our security. As head of the United States he says that we not only hope for a British victory but will “do all we can” to help bring it about. Here is the crucial sentence that will be pondered in Berlin: “There will be no ‘bottlenecks’ in our determination to aid Great Britain. No dictator, no combination of dictators, will weaken that determination by threats of how they will construe that determination.” : Mr. Roosevelt tosses the ball to Hitler. Time will tell the rest. It is a moral and material war against Germany, war one degree removed from direct hostilities. Whether this becomes physical war seems now to depend upon Hitler.

By Eleanor Roosevelt

dressed, but with an expression on his face that said very plainly that life had lost its savour for him. As I bowed my recognition, I wondered what it was that made old age for some people a time of flowering, but for others a time of drying up. Three of us listened in my %partment in New York City to the President's speech last night. I think all of us felt that it was as sincere a presentation of the question of national ‘defense as it now stands before the nation, as could well be made. ~The newspaper this evening announces that the “city” of London is in ruins as a result of bombing. I imagine this means little loss of life, and all the activities which have been carried on in the past, in this particular part of London, can be resumed somewhere else. An American who had been in London not very long ago, came to see me today. Someone asked him about the effect of the bombing, and with this very news in mind, perhaps, he answered: “They are the bravest people I. have ever seen.” 3 The loss of material things seems to matter less and less as the days go by, just as they tell me the old class distinction are being wiped out by the necessities of the moment. Lét us hope that we can learn some of the lessons of suffering without having to endure it. I had a rather bumpy air trip to Washington this morning. My young fellow passenger, who was on her first flight, was not very happy, but we arrived in time for lunch and she seemed quite recovered, for She went off to the movies with Diana Hopkins after-

U, S. AUTO TOLL UP 7% OVER 38

Rural Deaths Blamed for Increase; Total to Be About 34,500.

CHICAGO, Dec. 31 (U. P,).—The Natioma! Safety Council blamed traffic deaths in rural America for gn increase of ‘7 per cent in the nation’s toll from highway accidents this year over 1939. Fatalities for the first 11 months of 1940 totaled 30,980, the council said, and the 12 month toll was estimated at more than 34,500—almost 2000 greater than 1939's total of 32,600. The 1940 figure was certain to exceed any year’s in history except a period from 1934 to 1937. “The bigger 1940 toll can be blamed,” the council said, “on rural accidents. The average increase in traffic deaths was 3 per cent in cities, against 9 per cent in rural areas. In November, the cities cut their toll 4 per cent, while rural accidents went up 14 per cent.” St. Paul, Minn., whose population is 277,900, was the largest city reporting no fatalities from traffic in November. |

If You Do Drive Tonight, Be Wary

CHICAGO, Dec. 31 (U. P.)— Stay out of automobiles tonight! That was the stern warning of the National Safety Council for New Year's Eve. It urged use of _ publi¢ transportation systems, But if you must drive tonight

“be suspicious of every car on the road,” the council said. :

And don't drink

A member. of the crack Greek Evzone troops questions a while the prisoner enjoys a meal of stew.

today |

The Indianapolis Times

shelter, where they spend so much is making a film to be shown at all

shelter. :

MISSION WILL HOLD "WATCH NIGHT RITES

The annual Watch Night services will open at 7:30 o'clock tonight at the Wheeler City Rescue Mission, 245 N. Delaware St. - During the first period, the Rev. Herbert Eberhardt, Mission super-

intendent, will speak on “Conformed or Transformed.” The Mission’s Gospel teams, in charge. of D. C. Swannen, will be in charge of the second period. The third period will be a youth service, under the

direction of the Young People’s Fel-

captured Italian soldier

In order to educate Britons in being comfortable in an air-raid

time, the Home Security Ministry theaters. Here a cameraman films

a scene showing a family of five in sleeping quarters in an Anderson

Sews Up Wound In Boy's Heart

NEW YORK, Dec. 31 (U. P.. Jamaica Hospital authorties said today that 9-year-old John Guerin

from a stab wound in the heart. Dr. Gustav R. Petz, took three stitches in the boy's heart Sunday and today Francis <C. Leupolr hospital superintendent, said recovery was probable. John stabbed himself accident ally with a pair of scissors. His father, Edmund C. Guerin of Jamaica, carried him a block to the

Mrs. Elliott Sutton in

| bospifal,

had a good chance of recovering

War Scenes—But Most of Them Peaceful

EOE

Clothes dummies (right) and furniture are piled in Piccadilly Circus while London firemen fight fire after a fierce bombing attack. =

2 ARE NAMED AS JUDGES PRO TEM

Karabell Selects Rinier and Lewis to Serve Half Month Each.

Municipal Judge Charles J. Karabell today took steps toward a new arrangement for pro tem judges in Municipal Court 4 while he is recuperating from an illness. Insteam of having pro-tem judges sit for only a day or a half-day in

his court, the Judge has proposed that one attorney ' serve ' pro tem

_|during the first half of January and

that another serve for the balance of the month. ;

Rinier, Lewis Named

This arrangement, Judge Karabell commented, might be more satisfac-

‘| tory than the present system of hav-

ing numerous pro tems occupy the bench. Judge Karabell said that George G. Rinier, attorney, would

David M. Lewis, retiring County prosecutor, would serve -the remainder of the month. The question of compensating the attorneys who are entitled to $10-a day for their services is yet to be worked out, he said. But he indicated that Mr. Rinier and Mr. Lewis might be willing to accept only partial compensation. The court's pro tem budget is limited to $500 a year. It Was Merry-Go-Round Announcement of the new arrangement followed a merry-go-round of pro tem judges in the Municipal Courts which reached a climax shortly: before Christmas when twq pro tems. took turns. on the betich so, that each. could defend a client. LEN INE a aia

pal Court

3, Judge » John] comment on

STUDENT COUNCILS’ GROUP QUITS A. Y. C.

NEW BRUNSWICK, N. J. Deo, 31 (U. P.).—The National Student Federation of America, represente

ing the student councils of more than 100 colleges, became an ine dependent organization today. ; It withdrew from the American - Youth Congress, which it helped to found, because of the A. Y. Cs - alleged radicalism, and refused to affiliate with the International Student Service, in which Mrs, Franklin -D. Roosevelt has been ine - ‘terested. because of the I. S. S.’8

TEST YOUR * KNOWLEDGE

1—What is the term used by Enge lishmen: for movies? . = EEA 2—Name the capital of the Domine ion of Canada. : : 3—1Is the device resembling a on the front of a battleship ' to indicate time, distance @

- range? ; £7 4—Which breed of dog has a tongue? - rh S-Whith two letters of the

preside for the first 15 days and that 8—

7—There are 10, 12 or 14 tions in the Zodiac?

Answers

COL .

1—Cinema.