Pay As You Go

The U.S. Treasury this week was working on a plan to collect income taxes in advance. Some time after July 4, tax-anticipation certificates will go on sale, permitting taxpayers to invest their money in taxes the same year they earn it.

Blond, dapper John L. Sullivan, Assistant Secretary of the Treasury, told newsmen that these tax certificates will probably come in denominations starting at $1 or $5, will bear interest (probably 2%) in the form of a discount, like defense bonds. Treasury officials said the certificates will not be transferable or subject to use as collateral for bank loans. Thus banks and private investors will not be able to buy in quantity for investment.

The plan has three major objectives.

First is to collect more money for defense --the Treasury hopes to sell from $1,000,000,000 to $3,000,000,000 worth of tax certificates, use the cash this year instead of waiting up to 18 months for it. By paying as it goes, the public will find next year's vastly increased taxes easier to bear.

And tax savings will cut purchasing power, help prevent inflationary spending--which is a prime purpose of the big 1941 tax bill.

In Congress this week the House Ways and Means Committee said it had found $733,200,000 of the $905,000,000 increased excise taxes needed to complete the bill. Some new taxes, and what they will yield: P:Use of motorcars, yachts and planes, $5 a year ($160,000,000).

P:On liquor, another $1 a gallon ($122,300,000).

P:On automobiles, 7% ($79,900,000).

P:On rail, water, air and bus fares over 35-c-, 5% ($37,600,000).

P:On telephone bills, 5% ($28,600,000).

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