as a generating power. It should be remembered that home-making made this country prosper-not natural resources. It has been stated before this committee that the joint tax proposal affects only 153,000 families. Our research has established that actually it affects approximately 172 million families, and I would like permission to insert in the record data and statistics we have gathered relative to the far-flung effect of this proposal on the homes and family life of the Nation. May I do so, Mr. Chairman? The CHAIRMAN. Yes; it may be entered in the record. Miss CURTIS. If the mandatory joint income-tax return-which the House Ways and Means Committee inserted in the bill in secret sessions behind closed doors, without giving the women of the country any opportunity to voice their opinions-becomes law, married women in the United States will be returned to the old common-law status of chattels of their husbands-the position married women have occupied in Europe for centuries. If the mandatory joint return is adopted-its effects on the family life of the country and on the income, savings, capital, and assets of wives cannot be estimated. If the Government can merge the incomes of husband and wife for tax purposes-will that make the wife's income attachable for her husband's business and bankruptcy debts? And, if the Government can merge their income-cannot it also merge their capital and assets-again making everything the wife may have liable for attachment in case her husband is forced into bankruptcy? Women are aroused.-Our mail indicates that the women of the country are thoroughly aroused over the unjust treatment accorded them by the Ways and Means Committee and the manner in which it adopted this proposal for mandatory joint income-tax returns. Committee misinformed.-It would appear, from statements by members of the committee, there is a complete misunderstanding about the number and type of families which will be seriously affected, the principles which are involved, and the far-reaching social consequences of this family disrupting legislation-should it become law. A careful study of available Government statistics establishes that this proposal will affect at least 17,500,000 families-not about 153,000 as has been announced. Further, it will bear most heavily upon the families of small incomes, not upon the wealthy as has been claimed by proponents of the measure. Hits small families. In addition, it will bring within the incometax law approximately 8,400,000 families whose incomes are so small they now are not taxable under present income-tax laws, the majority of them being small suburban and farm families. These are a few of the facts that would have been made available to the committee by the women, had we been accorded the same consideration extended by the committee to representatives of business and industry. The printed record of the hearings discloses that the committee listened to the protests of 110 representatives of the tobacco industry, 73 from the gasoline industry, 8 from musical instrument manufacturers, 8 representatives of the carbonated beverage industry, 9 from candy manufacturers, as well as 7 from the liquor distillers and 10 from the beer brewers. Women receive no consideration.-Yet not one woman, nor one women's organization was extended the courtesy or opportunity to voice their opinion or to speak in defense of their rights as individuals or in defense of the American home. Whoever produced the estimate of 153,000 families to be affected by this tax proposal gave consideration only to statistics relative to present independent tax filings of husbands and wives. No consideration, apparently, was given to the vast number of families-now tax exempt-who will be brought into the tax collector's net by this proposed mandatory joint-income return. The following statistics relative to families and their income are found in the United States Statistical Abstract. This table reveals that about 80 percent of the families earned less than $2,000 per year in 1935. The present chaotic condition of Government statistics makes accurate analysis impossible, but applying the family group ratios of the 1935-36 table to the family unit figure for 1940 which is quoted by the Bureau of the Census, we find the following: Family income groups.— Considering the above table-it reveals about 15 million families fall within the family income band from $1,250 to $5,000 per year. To this should be added another 212 million families in the $750 to $2,000 band who unquestionably will be affected by this proposal. If official statements relative to increased earnings for workers are correct-then a large percentage in the $750 to $2,000 band in 1935–36 are now above the $2,000 joint-income figure. It must be recognized that the families in this band who-according to official statementshave benefited in the past 6 years by increased earnings-are those of the farmers and mechanical and industrial workers. Incidental earnings become taxable.-By forcing even the small, incidental earnings of women-as well as the earnings of all minorsinto the joint return, the incomes of million of families will exceed the $2,000 exemption allowed for husband and wife, and $400 for each dependent, and therefore will be subject to Federal income tax. The women of these families have experienced economic hardships during the past several years, but now-due to increased demands for industrial and mechanical workers-are receiving their first real pay envelopes in years. These pay envelopes will be taxed 162 cents out of every dollar in them over the $2,000 exemption base, if this jointreturn proposal is adopted, whereas under the present law, they would not be reached other than by the existing innumerable hidden taxes which all of us now pay. Some of the earnings of women that would become taxable under the joint-tax proposal would come from such varied sources as: Penalizes happy marriage. Summing up, the proposal, which was adopted in secret session of the committee, will affect not only the incomes of a comparatively small number of wealthy couples, as has been suggested, but also will place a heavy and unnecessary tax burden on the families of workers with small incomes. Further than this-it will destroy the independence of women and wipe out benefits of wills, trust funds, individual property ownership and legacies. It will return women-free-born American womento the primitive status of being the chattels of their husbands. Women's independence in this country-as an individual-is threatened by this mandatory joint income-tax proposal. Her basic property rights are at stake. The penalizing of happy married life-by levying a discriminatory tax burden thereon-and the subsidizing, by Government, of separation and divorce-by way of lesser tax burdens, is something to which no Member of Congress should be a party. If there is no intent to penalize marriage-why is this proposal designed to apply only to those married couples living together? If living under the same roof is used as an excuse to join their incomes for tax purposes-why should it not also apply to brothers and sisters who live together or to any group of relatives who jointly occupy the same household and benefit by the joint income of all who live under the same roof? In addition there are specific features now in the bill to which the women object. Among these are: I. Proposal to increase estate taxes.—This proposal tends to strike at the security of millions of homes. What is an estate? It is that portion of income set aside either through savings, investments, or insurance in order to provide security for the family and dependents after the death of the wage earner of the family. Do the increases in estate taxes proposed by this bill reveal any desire to protect this form of home security? An examination of the proposed increases tends to establish the contrary. Under this bill it is proposed to increase taxes on the net taxable estates as follows: A net taxable estate of more than $100,000 will pay, under this bill, the same percentage of increased tax as demanded from a net taxable estate of less than $5,000-that is, 50 percent. From net taxable estates of more than $100,000 the percentage of increase goes steadily down ward—and the public is being led to believe this proposed tax program is designed to make war profiteers pay the major part of the defense load to protect the masses. Actually, however, it would appear to be designed to destroy the great middle class, which constitutes the very backbone of our Nation, and to establish here only two classes-the bureaucrats and the enslaved workers-the only two classes permitted to exist in any centralized government. I subscribe to the remarks by Mr. Roy Osgood made before this committee relative to the estate-tax problem and strongly urge the committee to develop some program that will provide a stable tax rate for estate or death taxes. II. Excess-profits tax.-It is generally claimed that the proposed increase in excess-profits tax is for the purpose of reaching profits attributable to the defense program. The proposed schedule will: (a) Through the 10-percent increase in all brackets of the excessprofits tax reach: 1. A vast number of nondefense industries, 2. A large volume of normal profits, and 3. Will affect the earnings and assets of approximately 15,000,000 stockholders. (b) By tapping of all profits in so-called profitable years-business and industry will be unable to provide the reserves needed to tide them over periods of hard times-signs of which already are ominously apparent, and (c) Make impossible normal expansion and even necessary modernization and replacements in industry. If one were asked to devise a sure way of turning the tide of economic progress in this country into a certain decline, no more effective method could be devised for the accomplishment of this objective than to take away all returns of business and industry-above wages and salaries—and popularly spoken of as profits, thereby providing no means of maintaining, let alone expanding, economic enterprise in this country. Such a system further would prevent the normal provision of new jobs for young men and women who grow up to seek gainful employment. From the point of view of future revenue-this policy means the destruction of the free enterprise system out of which taxes can be paid. Nowhere in the proposed revenue act is there a more vicious provision than that which requires the computation of the excess-profits tax upon th amount paid as income tax. This is accomplished by the requirement that the excess-profits tax be computed before the computation and deduction of the income tax computation and deduction of the income tax. By what possible reasoning can earnings of a business enterprise-paid out in income taxes-be considered taxable income? Under the existing law, the income tax is allowed as a deduction in the computation of the excess-profits tax. This feature of the bill seems like a deliberate attempt to penalize private enterprise for the crime of producing wealth and creating gainful opportunities to make a living for millions of American men and women. If you deprive industry of the opportunity to build reserves, what will happen when we face the transition from a war economy to a peace economy? Surely you must recall the attempts to turn this country from a republic to a sovietized Government immediately following the World War. There is ample evidence in the files of congressional and State legislature committees to establish that Bolshevists had counted heavily upon the economic shock following from such a transition with its resultant millions of unemployed. However, the record shows that through reserves built during the war period industry was able quickly to change over to a peacetime economy, expand its plants, create new industries, and cut heavily into unemployment. Those same records further establish that Sidney Hillman, present Associate Director General of the Office of Production Management of our defense program was very active in che 1919 Bolshevist plot in this country. Is there intent concealed in this bill-under the guise of preventing war profits to bar industry from creating the reserves that will be needed for the coming war-to-peace transition? It would seem to be the duty of Congress to decrease excess-profits taxes, thereby aiding industry to reate the reserves that will be needed to protect free enterprise in that transition period from war to peace rather than through this proposed increase in excess-profits tax to aid those who would destroy our free enterprise system. III. Radio broadcasting and network tax.-The provision in the bill (title VI) covering the radio broadcasting and network tax runs counter to the maximum revenue principle found throughout most of the tax bill. Three brackets of taxable earnings are set up: (a) $100,000 to $500,000, tax rate.. Percent 5 10 15 The lump-sum rates set up in the bill, however, permit broadcasting stations and networks to obtain lower rates than those specified above by holding their time sales down to certain levels. For example, on time sales in excess of $1,000,000, the tax is specified at the rate of 15 percent. Accordingly a station or network selling $1,000,000 worth of time would pay a tax of $150,000, and a station or network selling $1,010,000 worth of time would pay a tax of $151,500, according to the explanation of this title in the report on the bill put out by the House Ways and Means Committee. Actually, however, the bill contains lump-sum payment provisions that place a great premium upon the curtailment of radio time sales. Thus a station or network selling $1,010,000 worth of time would pay not $151,500 but only $110,000, because the bill states that in this case the tax shall be computed as follows' If the net time sales exceed $1,000,000-an amount equal to 15 percent of the net time sales-or an amount equal to $100,000 plus the amount of the net time sales in excess of $1,000,000, whichever is the lesser. Similar provisions are found on each of the other two bracketswaiving the possibility of obtaining the full rates specified on the bill-on condition that the time sales are held near the bracket minimum in each instance. |