Profiteers Beware

Aside from the bleeding, dying and bereavement, one result of war is that while it impoverishes most people, some people make money out of it and a few make a lot of money. Last week no less than 50 U. S. Senators, enough to pass any bill, revived the idea of "taxing the profits out of war."

The historically-dubious idea that wars are started for profit has long obsessed a group of Senators including Washington's Homer Bone, North Dakota's Gerald P. ("Neutrality") Nye, Missouri's Bennett Clark, Michigan's Arthur Vandenberg. "To keep democracy alive, and for other purposes," these gentlemen and 46 cosigners last week outdid themselves by sponsoring a war-tax measure written by little, pinch-faced Senator Bone.

Mr. Bone apparently failed to take into account that many States do not allow taxpayers to deduct Federal taxes in figuring their State income tax. Bone, Nye & Co. proposed such wartime tax rates that many top-bracket taxpayers would find their total taxes all but swallowing their net income (but not exceeding it, as newspapers reported last week). In New York, for example (which has a State tax graduated up to 7% plus a 1% emergency tax), a $500,000-a-year man in a war year would have to pay Federal and State income taxes totaling $486,677. On $1,000,000, taxes would be $982,077.

Homer Bone figured that such absurdities could be eliminated, would affect few people anyhow. For 1937, only 48 taxpayers reported net incomes of between $1,000,000 and $5,000,000; only one of above $5,000,000. But Bone & Associates proposed to lower the personal exemption for single persons from $1,000 to $500, for married persons from $2,500 to $1,000, reduce allowances for dependents from $400 to $100, up the basic tax from 4% to 6%. Proposed takings from sample taxable net incomes (before State taxes): $60 from $1,000, $860 from $6,000, $11,080 from $20,000, $90,280 from $100,000, $9,891,280 from $10,000,000. Corporations would have to turn over to the U. S. all net income in excess of 6% on their adjusted declared value.

However effective they might be in scaring the U. S. people into peace at any price, such levies would take away incentive for U. S. businessmen to help win a war. One of the 50 signers (Iowa's Guy Mark Gillette) said he expected nobody to take a confiscatory proposal seriously. And of the 50, only ten professed to have read the bill in full before they signed.

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