Mr. GASKILL. I do not recall that we have, sir.

Senator COUZENS. No.

Senator REED. That is scarcely necessary with this Congress, is it?

The CHAIRMAN. Well, we thank you very much, Mr. Gaskill. Senator CONNALLY. Just a moment. I am not through, Mr. Gaskill. You are not in favor of inheritance taxes at all, are you? Mr. GASKILL. Yes; I am.

Senator CONNALLY. How is that?

Mr. GASKILL. Yes, sir; I am in favor of inheritance and estate taxes.

Senator CONNALLY. How much and to what extent-your chamber? You say you are representing the chamber of commerce? Do you mean to say the Cleveland Chamber of Commerce is advocating inheritance taxes and estate taxes?

Mr. GASKILL. We take no exception to the inheritance-tax rates. Senator CONNALLY. I want to know what the views of the Cleveland Chamber of Commerce are. You are representing them. Do you mean to say that they are here advocating inheritance and estate taxes?

Mr. GASKILL. I do not mean to say that they are here advocating such taxes. The report that I have

Senator CONNALLY. Well, what are they doing? Are they for or against it? Is the chamber of commerce, your client, for inheritance and estate taxes or are they against them?

Mr. GASKILL. I do not know, sir.

Senator CONNALLY. Well, you represent them now. You are here, expressing their views. You don't know? Why did you say a while ago that they were for it?

Mr. GASKILL. You asked me if I was. I said I was, sir; expressing my personal views.

Senator CONNALLY. It looks to me as though you would find out how your clients, whom you represent, stand on that. Now, isn't it a fact they are against them altogether?

Mr. GASKILL. No.

Senator CONNALLY. The Chamber of Commerce of Cleveland?

Mr. GASKILL. We have never gone on record against it, sir, and we have considered it many times.

Senator CONNALLY. Isn't it about time to go on record? You are here now, and I want to know your views. Is the Chamber of Commerce of Cleveland advocating inheritance and estate taxes, or are they opposing them?

Mr. GASKILL. You want to know if the chamber of commerce would be against inheritance taxes?

Senator CONNALLY. I want to know just what I asked you, and that is this: Is the Cleveland Chamber of Commerce in favor of the inheritance and estate taxes, or are they opposed to them?

Mr. GASKILL. They have not gone on record or considered the question, sir; but I would say that they would be in favor of them. Senator CONNALLY. You would say that without knowing how they stand; is that right?

Mr. GASKILL. What I mean by that is, that they have not taken any exception to such taxes.

Senator CONNALLY. No; what you mean is to straddle the question, if you can. Now, will you please find out and let us know the views of the Cleveland Chamber of Commerce on the general subject of estate and inheritance taxes, whether they are for them or against them?

Senator REED. It is scarcely possible to do that within 24 hours, I should think.

Senator CONNALLY. There are telegraph and long-distance lines that go to Cleveland.

Senator REED. He cannot telegraph all of the members.

Senator CONNALLY. No; but he is representing them-who are you representing, anyway?

Mr. GASKILL. I am representing the Cleveland Chamber of Com

merce.

Senator CONNALLY. Well, what is its view on that subject?

Mr. GASKILL. Outside of what I have said, I do not know, sir. Senator CONNALLY. You do not know? Well, why are you up here representing them, if you do not know their views on taxation? Mr. GASKILL. We considered the revenue bill, sir, rather carefully. We covered a number of points in our report.

Senator CONNALLY. You covered the matter of inheritance and estate taxes in this matter, because I heard you talking about it. Mr. GASKILL. Yes, sir; we considered one phase of it.

Senator CONNALLY. And you were here, representing the views of the Cleveland Chamber of Commerce on that subject, and yet you do not know if the chamber is for an inheritance tax or against it? Mr. GASKILL. No, sir. They have not considered the particular question that you asked in connection with this bill.

Senator CONNALLY. That is all.

Senator BAILEY. Don't you think the taxpayers have a right to be interested in the subject of taxation?

Mr. GASKILL. We do, sir, and that is our idea in coming down here and trying to help you if we can.

Senator BAILEY. Especially in these times, when we are spending money like drunken sailors?

Mr. GASKILL. I beg your pardon?

Senator BAILEY. I say, especially in these times, when we are spending money like drunken sailors. Don't you think the taxpayers might be heard on that?

Mr. GASKILL. I think the taxpayers should be, but I do not think we are spending money like drunken sailors.

Senator BAILEY. I understand why you don't say that. I am saying that.

Senator CONNALLY. I am exactly in the attitude of the Senator from North Carolina. I think the taxpayers ought to be heard, but I think when they send a man here to represent them he at least ought to know what their attitude on the subject is, or, if he does not know, let him find out.

Senator BAILEY. I differ from the Senator from Texas. I think they ought to be heard without being challenged or rebuked for being heard.

The CHAIRMAN. Well, Mr. Gaskill, I understand that your committee took this House bill and these were the salient features about which you desired to give your views to the committee?

Mr. GASKILL. Yes, sir.

The CHAIRMAN. And you have presented them in your brief?
Mr. GASKILL. Yes, sir.

The CHAIRMAN. The committee thanks you.

STATEMENT OF BENJAMIN C. MARSH, REPRESENTING THE PEOPLE'S LOBBY, WASHINGTON, D.C.

Mr. MARSH. I would like as much time as the representative of the Cleveland Chamber of Commerce, for the People's Lobby.

The CHAIRMAN. I hope you will finish it very quickly, and then put your brief in the record.

Mr. MARSH. I will try to. It will be difficult, though, but it is rather important.

May I first read the recent decision of the Supreme Court of the United States, a week ago today, as I recall?

Neither property nor contract rates are absolute for government cannot exist if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom of contract to work harm. Equally fundamental with the private right, is that of the public to regulate it in the common interests.

That is the statement of Justice Owen J. Roberts in the decision upholding the New York State law fixing the price of milk, concurred in by Justices Hughes, Brandeis, Stone, and Cardoza.

Now, it is not a political issue, because, as I remember, 3 of the judges upholding this decision were appointed by Republican Presidents and 3 by Democrats.

I want to read, as bearing on this revenue bill, an editorial from the Scripps-Howard newspapers of January 27, entitled "Not Enough Taxes as follows:

The proposed tax bill is inadequate. The Ways and Means Committee of the House has done some useful tinkering with the law and in taxing unearned income more than earned income has revived a just principle. In ordinary circumstances this might be enough. But with the Government facing a $31,000,000,000 deficit, it is not enough. A substantial and progressive increase all

*

along the line is possible in this country on the basis of the experience of other countries.

And I will read a brief statement and request to put in certain supplementary data.

The tax system can make or break any recovery program.

The Federal Government may soon have to be the taxing agency for all Government units because of the inability or refusal of many city and other local governments to carry their budgets currently and because about 1,500 local government units have defaulted on bonds totaling about $2,000,000,000. This fact makes the national tax policy of extreme importance.

The Federal Government has already accepted major responsibility for maintenance of the unemployed, and it will shortly have to pay large sums for education, for medical care, for maintenance of children, unemployment insurance, and old-age pensions.

All the measures in operation during the past year have failed to effect any change in the consuming power of the masses of the American people.

We can't war on poverty by taxing poverty.

46932--34-2

I would say that I do not regard these expenditures of this administration as expenditures of a drunken sailor, but as expenditures by a Government which realizes, as every major government in the world does today, that government has got to cease being the agency of private profit-exploiting interests and care for its people, if government as now constituted is to continue, and I personally hope it will.

It is increasingly clear that the immediately needed jump in purchasing power will have to be brought about by drastic changes in

taxes.

Large individual investment of income is not only a calamity, it is almost a crime.

England-and I got these figures I am going to give from the secretary or clerk of the Joint Committee of the Senate and House on Taxation-England, with only about half of our wealth and income in the fiscal year 1932, raised from the individual and corporation income tax, $1,781,500,000, compared with our $1,066,756,697, and in 1933, $1,527,900,000, while we raised less than half as much, only $746,941,404.

Senator REED. Would you be in favor of our taxing small incomes the way England does?

Mr. MARSH. Including my own small income, at least four times as much as I am taxed today, because I am going to be frank. I am going to submit a table, which shows that you cannot get any largewell, not over 5 percent, in my judgment, of the increase in the Budget, if you take most of the incomes-if you merely take most of the incomes over $100,000. I have classified them by all of the classes given by the Commissioner of Internal Revenue. You have to start at even $4,000 pretty heavily, and you have got to get a majority-as far as the income tax is concerned-of the incomes of the total of the personal income tax. I will file that table, which is a detailed table, that has incomes between $5,000 and $100,000.

You cannot get it merely by soaking the rich above $100,000. Of course, while the equity of higher taxation of personal income in the higher brackets lies primarily in the fact that when you come toI will just cite one figure-of the 20 people who, in 1932, were in receipt of a net income of $1,000,000, and over, derived from property, 99.3 percent of the total income. Those from $500,000 to $1,000,000 derived 93.7 percent from property; from $300,000 to $500,000, derived 92.4 percent.

Congress should repeal at least $1,250,000,000 of consumption taxes, and processing taxes on farm products, paying any bonus that farmers need directly out of the Public Treasury. As far as I know, the farmers are the only property owners whom the Government is trying to bribe into acquiescence, into what I call economic madness that we are going through, by subsidizing them, out of the

consumer.

If our friends in Iowa, who ran the farm lands up to $600 or $700 an acre, the land speculators-well, it should come out of the Public Treasury and not out of the poor devils who do not know where their next meal is. And remember that about one sixth, and pretty nearly one fifth of our population are primarily dependent for existence on the Federal Government, and on the States and the localities, which do not appear to be doing very much.

Congress should raise at least $2,000,000,000 more in this revenue. bill by increasing normal income-tax rate and surtaxes; $2,500,000,000 additional, by taxing liquid corporation surpluses; $500,000,000 additional by taxing income from Government bonds; about $150,000,000 additional by taxing salaries and wages of Government employees; $400,000,000 more by increasing estate- and gift-tax rates, and $900,000,000 additional by taxing land values as an emergency measure a total of $6,450,000,000. Most of these taxes should be retroactive.

Senator BYRD. How would you tax land values?

Mr. MARSH. I would do it under the emergency powers of the Government. A direct Federal tax of roughly 1 percent in land values would raise about $900,000,000.

Senator BYRD. The Federal Government has no power to tax land.

Mr. MARSH. The Federal Government a year ago did not have any power to get off of the gold standard, but it just assumed the power; so what is sauce for the goose is sauce for the gander.

Senator MCADOO. You know, of course, Mr. Marsh, that any taxes on real estate imposed by the Federal Government would have to be apportioned among the States by population.

Mr. MARSH. Well, Senator McAdoo

Senator MCADOO. I mean the Constitution as it now is or was. Mr. MARSH. I refer you to the decision of the Supreme Court of the United States. There is no contract, as far as I can see-there is no written constitution that can be allowed to interfere with the human constitution. When they come in conflict, a wise government recognizes that it is the human constitution that votes and not the written constitution.

Senator McADOO. But I am talking about the manner of assessing that tax. That would have to be imposed upon the basis of population of the various States.

Mr. MARSH. No; it would not, as an emergency measure, according to the Constitution. According to the Constitution, you have to maintain contracts, but when you cannot do a thing, you do what you can do, if you want to be left to do anything more.

Senator MCADOO. You mean you would scrap the Constitution? Mr. MARSH. No; I would not scrap the Constitution. You can get around it.

Senator REED. You would keep it as a quaint curiosity?

Mr. MARSH. We would keep the Constitution for what the wise founders, I think, intended it to be-a document which would not constitute a graveyard for the human welfare, but would be adjusted from time to time.

My I answer Senator McAdoo's question specifically? The Federal Government can always levy excise taxes upon the privilege of holding land, based upon the value thereof. That is a way to get around it. There are two alternatives.

Senator McADOO. I do not care to engage in a legal discussion. because I think you are wrong. You know the Federal Government once imposed a real estate tax apportioned among the States.

Senator BAILEY. We were not under the human constitution then.