Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1913-04-09
GRADUATED INCOME TAX TO
COVER THE TARIFF DEFICIT

OF internal revenue the amount of in
come tax due from such person. All
such persons or firms are made per-
sonally liable for such tax
Persons or corporations liable to
make return on incomes who fail to
do so at specified time are made IL
able to a fine not exceeding $500 and
the penalty for false or fraudulent re-
turns is fixed at $1,000 or imprison-
ment not exceeding one year, or both.
In formulating this addition i'm
post" said Chairman Underwood in
his report, the attempt has been
made to provide not only a source of
revenue but also a means Of redress
ing in some measure the unequal tax
burdens which result from the prac-
tice OF basing the federal income en-
tiTely upon customs and internal rev.
enue duties.
This is system of taxation which
inevitably throws the burden of sup
porting the government upon the
shoulders of the consumers. II cor
respOndingly exempts the men of larg-
er income, whose consumption Of the
ordinary necessaries of life is subject
to tariff taxation in a far less aggre-
gate degree than is that of smaller
income earners, who expend the great
er proportion of their resources for
the ordinary necessities of lise."
Speaking OF the principle of taxa
ton laid down and the graduated sys-
tenn proposed, Mr.. Underwood declar-
ed:
The progressive principle already
has been sustained by the supreme
court of the United States in the in
heritance tax cases and there can be
no doubt that the same principle ap-
plies to the income tax included in this
bill and will be fully upheld should it
ever be called into question.
owing to defects in personal prop
erty taxation the larger incomes in
the United States have for many years
been able to escape with less than
their share of the general burden of
taxation and this inequity will be, It
is believed, in part overcome by the
plan proposed"
The bill provides that all taxable
persons shall be notified of the
amount for which they are liable un'
der the law on or before the first day
% June of each year and assessments
be paid on or before June 80.
For delay in making payments and
ten days after notice, there shall be
added the sum of per cent on the
amount of tax unpaid and interest al
the rate of l per cent a month from
the time the tax fell due
The corporation tax provision il is
directed. shall be computed upon in
come for the year ending Dec. 81, 1913
and for each calendar year thereafter
II is provided. however. that cor
pCrations may designate the last day
Of uny month as the day of closing
tax computed on the basis of net in
come ending on its designated day.
All labor, agricultural, horticultural
fraternal, religious and mutual benef
societies are made exempt from this
proposed tax.
An attempt to widen the foreign mar
ket for American goods and to en-
courage reciprocity treaties with al
foreign nations is embodied in
clause empowering the president t,
grant favors to any nation that give
mutual concessions to the Unitet
States.
The reciprocity clause takes tn,
place of the penalty clause of the pres
ent tariff law by which IL was sough
TO secure special concessions to tn
United States. The new tariff bill
proposes that the normal tariff rate
shall be the maximum and that spe
. cial rates shall be granted to countrie
that will enter into reciprocity treatie
= with the United States. In the pres
, ent law the normal rates are the min
mum.
The clause designed TO open wide
the markets for American export
} throughout the world is as follows:
That for the purpose of readjust
ing the present duties on imports int
e the United States and at the sam
= time TO encourage the export trade Q
| this country, the president of tn
o United States is empowered TO negc
) tate treaty agreements with foreig
nations wherein mutual concession
/ are made looking toward freer trad
) relations and further reciprocal e.
: pansion OF trade and commerce"
Such reciprocity agreements unde
= the new law, would have 10 be appro1
: ed by congress before becoming effec
i've. In a statement accompanying III
! bill Chairman Underwood declare
that under the Payne law the Unite
: States had attempted to expand on
: commerce by force"
= Another concession that would b
: made under the new bill is designe
: TO encourage American shipping
! concession Of per cent would b
/ made in all tariff rates on good
r brought 10 this country in America
built ships owned wholly b. Amer
P can citizens.