The Leon reporter. (Leon, Iowa) 1887-1930, 1913-04-24
OUR WASHINGTON LETTER.

(By Clyde H. Tavenner, special
Washington correspondent to The
Reporter.)
Washington, April 21.-An i'm
mediate cut of $500, 100000 in the
cost Of living-eventually slash OF
half a billion! That is what the
democratic leaders of the house be-
lieve the income tax will do for the
American people. The relief prom
ised by the democratic party for the
terrible pressure of the costs OF the
necessities of life seems to be at
hand.
Only experience will reveal the full
benefit to the public of the income
tax. The annual saving over the
counters of the nations grocery
stores, butcher shops and clothing
emporiums is expected ultimately to
reach 100000. Some Of the
more sanguine regard even this esti-
mate as too conservative. The saw
ing may reach $500, 100000, or
even more.
The estimate is reached in this
way:
From British income tax expert
ence tables, the experts figure that
| the annual revenue to be derived
from an income taxation under the
terms of the pending bill will be
| from eighty to a hundred million.
In writing the new tariff rates the
| Ways and Means Committee has TAX
en- cognizance of this probable reve-
nue. and has Topped off duties on ne
cessities which under the present
| Payne-Aldrich law aggregate $780,
! 600, 900 annually. This $5O,000,0OO
now paid by the people in the cost
! of living, is to be paid out of the in
come tax revenue.
| But every dollar saved in tariff
amounts to five or six dollars in the
final retail prices paid by the con-
sumner. This is because the many
middlemen who handle an article
from the stage of raw material to
that of finished product each asses
ses as profit a certain percentage OF
the value of the commodity he
handles. But in assessing this profit
| he includes the tariff in the value OF
the commodity. Thus the people
pay not only the tariff but also pay
profits on the tariff. Every dollar of
| Increased price for the raw material
assessed by the tariff becomes five
, or six dollars by the time it reaches
I the consumer.
| Representative Cordell Hull, Of
! Tennessee, the member of the Ways
/ and Means Committee who drew the
| income tax provision, prophetically
sees the day when all government
revenue will be derived from just
two principal forms of direct taxa
tion-the income tax and the in
heritance tax. . a-..-. 81
| THE rates in the pending bill are
but tentative he said. They can
and will be changed by succeeding
congresses.
| THE measure is designed to fit in
with the budget system of estimating
government expenses. The day will
come when government expenses will
be appropriated for in an annual
budget bill. On the basis of this,
the amount of revenue needed by the
government for the succeeding year
will be estimated. In order to raise
| just the revenue needed, congress
Will set the income tax rate to fit the
case. There will be few custom
duties. There will be, however, an
inheritance tax to relieve some OF
the tax burden on incomes"
The estimates of the Ways and
Means Committee show vividly how
wealth has concentrated in this coun-
try. Although incomes of as low as
$4,000 per year will be subject to
taxation, yet less than one per cent
of our total population is affected by
the bill. ST