The Barre daily times. (Barre, Vt.) 1897-1959, 1912-03-14
CHAIRMAN UNDERWOOD
DEFENDS EXCISE TAX
Declares That the Proposed Law Con-
forms to the Constitution, and He
Urges Passage OF Bill.

| Washington, ID, c., March I4.-Main.
tanning the eonstitutionality of the pro-
| posed excise tax bill, extending proyi-
slons of the corporation tax law to in
diyiduais and co partnerships. submitted
as revenue measure to replace customs
duties ON sugar, Representative Under.
wood, chairman of the ways and means
committee, made a report to the House
to-day, urging the passage Of the bill.
| After arguing the constitutional;ty Of
| the proposed law, proclaiming it in abso.
lutte conformity with supreme court de-
cisions relating to the income tax, the
report explains the provisions and scope
of the measure as it would effect indi-
viduals.
While the bill,' says the report, GEM
bodies new application of taxes. it ear
ries all the modern philosophy of taxa
tlon. 1t proposes to oblige the citizen
to contribute annually fair and Just
portion Of his net gains to the mainte.
nance of the government. As already
stated, this bill. if enacted into law, will
accomplish in the main all the purposes
of n general income-tax law and al 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.
TO illustrate the equitable adjust
ment OF the excise tax recommended. a
person having an income of less $4,000
a year would pay nothing, while a per.
son whose business earns $4,000 net
would pay no tax on the first 5000
and on the second $1,000 would pay only
$50 year"
Continuing, the report asserts that
the burden of "our present indirect tax.
alton" falls Hpon people having incomes
of less than $1,000.
"A large percentage of the customs
taxes" it says, amounting to S3d9.-
965,662 in 1911, was paid by people
whose incomes did not exceed $1,000 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 earnings.
There are no statistics as to the number
of individuals, firms and copartnerships
in the United States that would be sub
ject to the taxes prepared by this bill.
The report calls the proposed bill
combination of the excise tax of 1898
and the corporation tax law of 1909,
both of which "have been held valid IN
all respects by the supreme court" and
further urging why it should be popular
says:
"The revenue for the support Of the
government, as raised by taxation. Is
now almost equally divided between GUS
toms and excise duties of the $7Ol.- !
372,375 taxes collected in 1911 for this
purpose, the customs amounted to $780,
965,662, and the internal revenue or ex.
else duties to S32252920l. These taxes
are solely on consumption. Property, |
and the income from property as such, |
pay no part of these sums. Under a
system of national taxation based Who'll |
ly on consumption, wealth necessarily |
escapes its fair share of the burden of |
supporting the government, which gives |
wealth the necessary protection under |
which it increases its gains. On the |
other hand, when he purchases for him |
self and family the necessities of life, |
the man of meager earnings contributes
out of his daily wage to the support |
of the government.
"When ascitizen pays taxes according /
to his earnings, from whatever source.
he gives support TO his government, and /
receives protection from it in a more
equitable manner than under any other
plan of taxation yet devised. If his
earnings increase, his taxes increase, and
Justly so. for he is better able to pay
increased taxes If his gains decrease,
so do his taxes, and fortunately for him,
because he is less able to pay them.
There is also this striking advantage
of tax on earnings over taxes on
bought and sold commodities, namely.
the rate can be raised or lowered to
meet the exigencies of revenue require