Abstract

Taxes Versus Controls

Tax laws now on the books will bring in more dollars per year than ever before in the history of the U.S. federal government, although these taxes will take a smaller proportion of the national income than all taxes did in World War II. The Eighty-second Congress will undoubtedly increase the burden. Prices can be kept in check for a time by tight controls; controls over shortage items and scarce materials will certainly be, needed. Controls are primarily suited to diverting man-power and materials from one kind of production to another. A properly planned tax structure can minimize the need for controls. For this purpose both the whole burden and the selective impact are important. Even though high taxes are in general deflationary, the wrong kinds of taxes can have an inflationary effect, especially if they encourage waste and extravagance.