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- 39 - increased total produtioa. In this country we heb forty-five million wtoers employed in 1939. After this war we will ned sxty million JobU to give fu1l employment. Serious unemployment after tals W means depression. Ad another intense world-wide depression may mean that demoratic capitalisu as we 'now It will be wiped oat never to return in this age. 1he question before us is whether we can eliminate depression and unemployment by methods wAih preserve our fundamental liberties or whether circmistances and lack of esoial Inventiveness will drive the worll to some sort of totalitarianisa. But we need cousrageous action, not alarm. Is recent years, we have learned rash about the ways in which employment is created.. Ie know, for example, that the total stream of purchaslg power in our economy is deteruined by the way in which we dispose of our noney incomes. It ts the spending of ico*es for consumption or the aaking of *neow investmnts that *eeps a money eonomy operating. Money sorie by individuals mvst be invested If it is to contribute to the volume of Jobs. In short we ean maintain a high level of employmeat only by investing sufficient money to bring our total speodine up to the level required to maintain purchasing power. Te have all the materials fer a great a avae in health, omfort, a security if we are vise enou aa eourageous enough to use the resourees at our disposal. Sat central to this achievement is tho tacs of stabilising our eeenomy, to prevent depreseion and create the secure conditions for expansion of opportunities Isn th effort, the fisal polioies of the feoral goverment have a major part. Piseal pelicies teal with the use of the financlal powers of gaverument - taxing, borrowing, spending and. Inding. Who use of those great powers Influences the oeration of the ihole economy the preblen is to use them eonstuctively wan
deliberately, with a view to the probable consequeneso In the brief space of this report, only a few of the limits to good- paplicy can be pointed out. In terms of employment, we need tax programs which raise large suns of money, without disrapting the continued operation of the economy. In the postwar era the federal government will need some 16 to 20 billions of dollars annually, to meet interest charges of approximately 6 billions of dollars and other prospective expenditures. Bt this revenue must be raised in ways which do sat deplete mass consumption power or we shall bring on a depression. $ales taxes are doefationary. Yet this is not the whole story in tamation. Our fisal policy mast eneourage private Investment as well ais onsump- tion. It is this need that makes the current discussions of the influence of taxation upon "incentives$ so Important. Taxes which penalize the taking of risk deter investments. But this is also a big and difficult question, and one whigh must be viewed reasonably. The critical questions here turn upon the taxation of corporations. Two points san be established which may help understand the limits to tax adjustments to stimulate private investment: (a) Corporations are going concerns which are something more tban merely a screene for individual stoekholders. They are real units and as such they should be taxed. (b) Tax programs designed. t ease the burden of corporate taxes should be so designed that they do not penalise small businesses while allowing the big corporations to grow bigger and still bigger. Taxation policy mast be a balancing of many different kinds of taxes by the various units of government. And there can be no really simple tax program that is adequate. Heweer, the general principles of taxation which have stood the test of time are still good. especially taxation aecording to