The Washington herald., 1914-01-04
Income TAXES
CAUSE CRITICISM
Thousands Of Small Holders S
Greatly Inconvenienced by
Laws Provisions.
"PROVE THE NEGATIVE"
Those Whose Incomes Are Not Taxa
bic Are Forced to Show hat
Such b the Case.

These early days Of January are bring
Ing to light many annoying features OF
the new income tax law.
The law Is designed to tax all ne, in
comes in excess OF S3.oOoO enjoyed by
unmarried persons. and $4,000 accruing
to married men living with their wives.
II has been estimated that this tax will
be paid by less than 10000 persons in
the United States. Nevertheless, the alb
surd requirement. that the tax on inter-
est payments shaH be deducted at the
source. Is causing a great deal of trouble
and annoyance to many thousands and ,
perhaps millions of people who will not
have to pay the tax. but In order TO
escape payment must file with the paying
agent certificate of ownership and
claim a deduction Of the amount of in
terest received by them.
Washington banks. and those through
out the country. are besieged daily by
thousands of small holders of bonds who.
present their coupons as they have in ths
past. expecting them to he paid on pre-
sentation. They are very much mysti-
fled and chagrined to find that the
coupons which they have cut OFF of their
bonds. no longer pass freely from hand
to hand, as they have i'm the past. nor
can they be collected unless the owner
first certiies that he is the owner of the
coupons In his possession. and further
states whether he does or does not claim
an exemption under paragraph G, sec,
ton .. OF the Federal income tax law.
Pr-~umption of Innocence.
The spirit of our laws presumes that
every one is innocent of a crime or mis-
demeanor. or Of an intent to break the
law. until he has been proven guilty.
Not so. however. with the income tax
Itxt IL frrI -fNf1Nr -
the attempt to collect at the source of
the income. that every citizen or resi-
deut of the United States. whether re-
siding at home or abroad. who owns 4
bond on which interest Is paid to him at
stated periods must prove, in the man
Her prescribed ny the regulations. that
he is or is not liable to pay the tax. II
other words. to establish list of those
whose incomes are taxable, many thou
sands and perhaps millions OF others
whose incomes are not taxable. must
prove that fact.
Prove the negative" seems to he the
dominant spirit of the law.
In its efforts to collect the tax at the
source the government has shifted tin
Iurden Of such collection upon th-
banks and collecting agencies through
which interest payments pass
II would be- interesting 10 ascertain eN-
actly how much it costs in clerk hire.
stationery. postage. &c, to collect 81 OK
abe income tax.
II has be asserted by officials OF the
government tina: the cost Of collection
will he very small in comparison to the
amouns derived from this tax. but they
failed to include in their estimate the
tremendous volume Of work that is now
being done l,y banks everywhere in the
United states. and more especially by the
big banks AID collecting agencies in New
York City and elsewhere. which act as
fiscal agents for large corporations.
One is tempted to think of what will be-
come Of thu MANY certificates of owner
/ ship and exemption that will pass
through ths Treasury Department and
how many Jerks il will take to tle them
properly for further reference Next
| wear il miGT5 be profitable II the Treas
ury Officials would have careful analE-
sis Of these certificates made to asCer-
tain how riany securities are held hy
small investors.
One is prone to regard the owner ~
bonds as a plutocrat and the intent Of
the income tax law is l. make those who
are able to nav the tax. But there ara'
many thousands Of persons Of modest
means Who own bonds. but whose in
comes are not taxable. How they regard
the requirement that they shall prove the
negative every time they collect the
money due u coupon goes without say
ing