Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1912-03-14
Underwood Argues for
Adoption of an Ex-
else Tax Bill.
MEANT FOR EQUALIZER
Citizen Asked to Contribute to
Government Support in AC-
CordanCe With Income.

Washington, March 14.-Maintain-
ing the constitutionality of the propos-
ed excise tax bill, extending previ-
sions of the corporation tax law to in
dividuals and co-partnerships, submit
customs duties on sugar, Representa-
tive Underwood, chairman of the
ways and means committee, made a re-
port to the house today, urging the
passage of the bill.
After arguing the constitutionality
OF the proposed law, proclaiming it in
absolute conformity with supreme
court decisions relating to the income
tax, the report explains the provisions
and scope of the measure as it would
effect individuals.
CITIZEN AS CONTRIBUTOR
while the lbill," says the report,
"embodies a new application of taxes,
it carries all the modern philosophy of
taxation. 1t proposes to oblige the cit
izen to contribute annually fair and
just portion of his net gains to the
maintenance of the government. AS
already stated, this bill, if enacted in
to law, will accomplish in the main all
the purposes of general income tax
law and at the same time escape the
disapproval of the supreme court, as it
keeps well within the principles laid
down by that court in sustaining the
constitutionality of the corporation tax
law.
OVER $4,000 TAXED.
ITO illustrate the equitable ADJUST
ment of the excise tax recommended,
person having an income Of less than
$1,000 per year would pay nothing,
while a person whose business earns
$4,000 net would pay no tax on the
first $4,000. and on the second $4,000
would pay only $50 a year." Contin-
uing the report asserts that the burden
of "our present indirect taxation
falls upon people having incomes of
less than $4,000.
"a large percentage Of the customs
taxes" it says, amounting to $685.
965,662 in 1911, was paid by people
whose incomes did not exceed $4,000
per year. The bill aims to distribute
more justly the tax burden by shifting
an equitable portion Of the taxes to
the shoulders Of those of larger earn
ings. There are no statistics as to the
number of individuals, firms and CO
partnerships in the United States that
would be subject to the taxes proposed
by this BILL"
| COMBINES TWO MEASURES.
The report calls the proposed bill {
combination of the excise tax of 1895
and the corporation tax law of 1909
both of which have been held valid il
ali respects by the supreme court,
and further urging why it should b'
popular says:
"The revenue for the support Of the
government, as raised by taxation, i!
now almost equally divided between
customs and excise duties. OF thu
$701, ,372,375 taxes collected in 1911 70
this purpose, the customs amountet
to $3O9,965,662, and the internal-rey
enue or excise duties to $685., ,529, POI
These taxes are solely on consumI
ton. Property, and the income fror
property as such, pay no part of thes
sums. Under a system of national tar
alton based wholly on consumption
wealth necessarily escapes its fai
share of the burden of supporting tn
government, which gives wealth tn
necessary protection under which
increases its gains. On the othe
, hand, when he purchases for himsel
and family the necessities OF life, tn
man of meager earnings contribute
out of his daily wage to the support c
the government.
TO MEET EXEGIENCIEs.
: when a citizen pays taxes accort
8 ing to his earnings, from whateve
n source. ne gives support to his govern
g ment, and receives protection from
; in a more equitable manner than III
il der any other plan of taxation yet d
! vised. II his earnings increase b
a taxes increase, and justly so, for he
better able to pay increased taxes.
his gains decrease, so do his taxes, an
fortunately for him. because he is LEI
:. able to pay them. There is also tn
J, striking advantage of tax on earning
a over taxes on bought and sold cor
9 mododities, namely, the rate can
/ raised or lowered to meet the exige
a cies Of revenue requirements witho
e consequent disturbance Of prices"
MINORITY REPORT IN.
Longworth, a member of the COZ
r uittee, presented a report giving Il
? dissenting views of the minority.
l. STEEL BILL ADVERSE REPORT.
e The finance committee of the sena
today ordered an adverse report On t