1932 Catch; 1934 Trick

The Treasury Department last week reckoned up its 1932 income tax catch, found 1,865,000 out of 123,000,000 U. S. inhabitants had paid a tithe to the Government. Slightly more than that number, however, had made tax returns on which they were required to pay nothing. Number of income tax returns by income brackets in three, recent years:

Income 1932 1931 1929 Under $5 000 3,420,995 2,560,197 3,012,256 $5,000-$10,000 237,273 385,558 658,039 $10,000-$25,000 77,045 135,606 271,454 $25,000-$50,000 17,658 23,878 63,689 $50,000-$100,000 5,644 7,657 24,303 $100,000-1,000,000 1,767 3,067 14,303 Over $1,000,000 20 75 513

Because of progressive stiffening and steepening of the income tax law the number of taxpayers on 1932 incomes is larger than it would have been if the law had been unchanged since 1929. But it was not large enough to satisfy Secretary Morgenthau. Last week he called 150 internal revenue collectors to the Treasury, told them he wanted them to collect at least $200,000,000 in back taxes which he estimated as outstanding. If they thought it would do any good he was primed to apply to the Civil Works Administration for funds to make a house-to-house canvass of the U. S. in an effort to catch tax dodgers at home.*

One other trick to stop tax evasions was announced by Mr. Morgenthau. Here after every taxpayer's return must be signed by the expert or lawyer, if any, who advised him in figuring his debt to the Treasury. Thus if arrant crockery is found, the lawyer responsible may be dis barred. Respectable lawyers will give their clients shyster advice only at the risk of their reputations. For this new tax wrinkle U. S. lawyers can thank Earle Bailie, partner in the banking house of J. & W. Seligman.

*U. S. taxpayers had reason to be thankful that they did not live in Britain where the Government hires common informers (generally discharged employes) to tattle on tax evaders. Payment to common informers in 1933 was -L-535 ($2,675), far less costly than a house-to-house canvass by CWA workers.

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