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TREASURY DEPARTMENT
VJashington
FOR RELEASE, MORNING NEWSPAPERS,
Tuesday^ August 3, 1943*
8-2-43

Press Service
No. 37-88

Secretary Morgenthau today reminded the American taxpaying
public that ninety-five cents out of every dollar of Federal
expenditures is being routed directly into the war effort.
This means, Mr, Morgenthau explained, that (>36.8 billions
of the approximately $ 3 8 b i l l i o n s which President Roosevelt
estimated in his revised budget summation would be received as
revenues In the present fiscal year, will go toward the purchase of guns, tanks, ships and planes in order that decency
may be restored to the world.
The Secretary made public a series of charts illustrating
the American Federal tax structure. One chart of estimates for
the fiscal year 1944 showed that tax dollars met only 36 percent
of total Federal expenditures in the United States; 47 percent
in Canada, and 52 percent in the United Kingdom* Another depicted the lower Federal income tax rates in this country in
contrast with those of Canada and the United Kingdom, by showing examples in two important income levels. A third portrayed
the slower rise in Government receipts in relationship to
budgetary expenditures.
At the same time, Mr. Morgenthau declared that taxes are
the best method of paying for the war - because they pay for
the war once and for all.
"But obviously," he said, "the entire cost of the war cannot be financed by taxes alone. This would impose so heavy a
tax burden that it would create impossible situations for certain groups despite all efforts to apportion the tax load equitably. The ability to pay varies greatly in all income groups.
"Because of this, flexibility is necessary in financing
the war. The purchase of War Bonds lends to our program this
necessary flexibility. It makes it possible for everyone to
aid and participate in the war effort in accordance with the
amount of money which they have over and above their essential
cost of livingf




-

2

-

"Therefore, if we are to pay as much as possible eut of
our current national Income for the cost of the war it Is
urgently necessary for Individuals to p%y high taxes and, in
addition, buy and hold as many War Bonds as they can afford."
Mr. Morgenthau observed that, as a result of huge war expenditures (estimated at $100 billions for the present fiscal
year by Fresident Roosevelt in his budget summation), the
income of the people of this country - the total they receive
in wages, salaries, farm income, dividends, etc.,
now is the
highest in history. Even after payment of the higher income
taxes there will be more dollars to spend at a time when the
amount of goods available is declining because of the demands
of war production, he said.
"If people should try to spend this excess purchasing
power," he concluded, "the upward pressure on prices would be
serious. Thus, every tax dollar as well as every bond dollar
does double duty; it provides funds needed urgently for winning
the war, and checks the tendency toward rising prices."




-oOo^r

FEDERAL

EXPENDITURES

Most of the spending is in FIGHTING

DOLLARS

$79.7

I Billions,

95%!

WAR

5%

INONWAR

$34.2 \

I Billions




16%:
1942

1943
FISCAL
YEARS

FEDERAL

I944(ESO

RECEIPTS

Receipts are increasing but so is National

1942

1943
FISCAL
YEARS

Income

l944(EstJ

* excludes public debt retirements;
includes net expenditures
of Government
corporations.
f Total receipts
less net appropriation
to Federal old-oge and survivors
insurance
trust
fund.




WHAT PART OF OUR FEDERAL
E X P E N D I T U R E S IS PAID BY T A X E S
As Compared With Other Countries

FISCAL YEAR I944(EST.)

UNITED STATES

CANADA

* Excluding

Social

Security

UNITED KINGDOM

INCOME T A X FOR MARRIED PERSON,
NO D E P E N D E N T S
P r e s e n t R a t e s . A f t e r P o s t w a r Credit

$,2
168

/q of U. S. Income goes to people
earning less than &5,000




$1,378

$932

$378
$188

$231

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