ALL the talk lately about political refugees from Central Europe and whether or not the United States ought to admit them tends to hide the fact there are already many persons in this country who were forced to leave Germany and Italy. Einstein, Thomas Mann, and Breuning are well-known refugees. A group of such scholars has set up in New York the New School of Social Research, which well-established institution has gone so far as to publish its own quarterly magazine and issue as its first supplement the pamphlet on Taxation. Recommended by the April Fortune as essential reading for the background of the tax controversy, the pamphlet is an eloquent testimony of the contribution the refuges have for American thought and life.

"It may be useful to attempt an examination of the influence which recent tax measures may have upon the basic conditions that determine the status and development of the American economy." Such is the purpose of the work. The first part is an analysis of the various and conflicting factors and trends, the net result of which is the familiar thesis that the need for savings and capital investment in America is on the decline, and that in the future long-run we are faced with a problem of over-saving. "No technical events are in prospect at the present time which in their expansive force can be compared with the development of the railroads, with electrification, or with motorization." The statistical survey indicates that in a normal future year the capital needs of the country will be about eight billions of dollars while the amount of savings will be around fourteen billions.

Compared with this long-run problem is the problem of the effect upon the business cycle of taxation aimed at reducing the amount of savings. The pamphlet contains a very careful analysis of the effects on all aspects of the economic life of the country of the Capital Gains Tax, the Undistributed Surplus Tax, and the Social Security Tax. The conclusion is that though these taxes are in part designed to curb over-saving they reduce savings in a year only between one-half and three-quarters billions of dollars. What relation is there between these taxes and the current Recession? Mr. Colm and Mr. Lehmann argue that such measures are harmful, if imposed as they were in the first part of an upswing, because by redistributing income they increase consumption too fast, and by taking the surpluses of the wealthy they reduce greatly the amount of capital available for new and speculative investment. This apparent conflict between the long-run need to lessen savings and the cyclical problem of having enough capital on hand to promote recovery can be reconciled, the authors believe, by a more flexible and changeable tax policy than that at present. Truly this pamphlet is required reading for those interested in finance and business.