society, we begin to strip every individual of his liberty and make him a faceless, soulless part of a master plan.
A good example of how brutal and
unfeeling this pursuit of perfection can
become is the deliberate starvation of
millions of Ukrainian peasants who refused to cooperate with the Communist
Their death, according to the worshipers of communism, was just a small incident on the road to "heaven on earth."
EFFECTS OF INCOME AND
Another dangerous situation is represented by our federal tax laws affecting
personal income and inheritance of
Strangely enough, these laws, which
were passed bv good American Congresses, were taken right out of the
The federal personal income tax was
written as an emergency measure which,
incidentally, is the way many mistakes
The law. which follows the principle
of progressive rales, was based on the
completely un- \merican idea that the
so-called rich people should be taxed
a larger proportion of their income than
the less fortunate people.
In other words, a man who earns ten
times as much money should not pay
ten times as much tax but thirty or forty
times as much tax.
The evolution of this tax law is a
good example of how a small mistake
can turn into a big one.
At the time the federal personal tax
became law, someone suggested that the
law (which started with a top of 1 per
cent i should include a limitation on how
high it could become on the largest of
President Wilson vetoed this limitation on the grounds that if it were writ-
tcn into the law. somebody would always be wanting to raise il to that limit.
Incidentally, the [imposed limit, I be-
lieve, was 3 per cent.
At its present levels, running as high
as 91 per cent, the federal personal income tax is causing fundamental and
undesirable changes in the economy.
It is no longer possible for any man
to build up an estate for himself out
nf his salary or current income.
This may be all right as far as it concerns people who do nol believe thai anyone should be permitted to build up an
estate, but most of us still believe that
people of extraordinary talent, who are
willing to work extraordinarily hard,
should be permitted lo become wealthy.
This suggestion has not existed long
enough for it~ effects ti> be fully known.
hut it is my opinion that if il continues,
the nation is going to lose much of the
talent thai is needed to operate our vast,
complex industrial system.
And if this occurs, part of the tragedy
will lie in the fact that the amount of
money taken away from the people in
the very high income lax brackets is of
very little importance from the standpoint of tax revenue.
Another unfortunate feature of ihis
tax law is that it is impossible to administer with the thoroughness with
which tax laws should be administered
and. knowing this, the American people
have, without anv feeling nf wrongdoing, become a nation of liars and lawbreakers.
Although this will be an extremely difficult law to change, if I were a young
American today. I would make it one of
mv objectives as a good citizen.
Closely akin to the progressive personal income tax is the federal inheritance tax.
The idea behind this tax is to break
up concentrations of economic power,
on the theory thai if successive generations control large estates, there might
develop in America a moneyed aristocracy with a dangerous amount of
But. like most punitive laws, this one
misses the goose and hits the gander
because there are many legal ways in
which the large estates can avoid the
full impact of the law.
It is the medium-sized and small
estates that are put through the wringer: in many cases stripped of all liquid
eis-ets; and in some cases forced into
sacrifice sale in order to raise the
monev needed lo satisfy the taxes.
This to my mind is. in itself, enough
reason for a drastic overhaul of the inheritance tax laws.
But to it must be added another
reason, namely, that more and more
property is being taken from the hands
of the- people and put into the hands
The next law about which I have
serious doubts is the one which took
away from the people the right to own
The reason for this having been done
is a rather complicated one. but its
basic purpose can be very simply
Stated: when the people can demand
gold in exchange for their paper money, they can control and reduce the
borrowing power of the federal government (thai is. the power to inflate
the currency and cheapen the dollar)
through lhe simple process of demanding gold.
When this power was taken from the
people in 1933, an enormous power
was transferred to the federal government—a power which, if improperly
employed, could be used to coerce the
people to lhe will of the federal government.
In my opinion, this power has al
ready been misused For excessive borrowing and inflation, but thai which
has happened in the past is only indicative of what could happen in the
TARIFF PROTECTION NEEDED
Another trend of great importance
to the American people is the rising
popularity of the idea that free trade
is a moral obligation of the United
States and the answer to world peace.
Free trade is not now a part of our
national policy, but if it were, it would
mean that low-priced, foreign-made
goods could come into the American
market without any protection to the
Even under our present tariff laws
we have already had small samples of
what could happen on a large scale.
The American textile industry, the
American mining industry, the American watchmaking industry, the American bicycle industry, the American optical industry, the American pottery industry, have all suffered serious setbacks
from foreign competition.
On most goods imported into the
United States we have no tariffs nor
do we need any.
But in certain mass produclion gineels.
tariff protection from foreign competition is of great importance to our do-
This was not always so because
America's tools of production used to
be. in most cases, vastly superior to
the tools used by foreign competition.
llii- superiority in tools made it possible- to pay American workers wages
three or four times as high as Foreign
wages and slill produce at competitive
But today every country in the world
lhal i- able to do so is improving its
luiils and bringing them up to American
standards, without raising their wages
In anything approaching the American
This puis American workers at a
The American textile worker, for example, receiving $1.30 an hour would
under Free trade have to compete with
foreign workers earning as little as 25
cents an hour but turning out just as
many holts of cloth of similar quality.
I rider free trade, America would
soon have no textile industry.
The policy lo which America has been
largely adhering is a fair one: it con-
lists e>f placing enough tariff on imported goods to counteract the advantage gained by low wages abroad.
This has been called tlle "peril point"
This policy, however, is not uniform
nor is it by any means securely anchored in our laws.
FACTS FORUM NEWS, October, 1955