The gazette-times. [volume] (Heppner, Or.) 1912-1925, 1915-05-20
CHANGES PROBABLE N
INCOME TAX LAW

| u
cause of imperfections in the income
tax law, numerous amendments will
be recommended to the next Con-
gress by the Treasury Department.
Official experts are quietly at work
on this statute, preparing report on
the crudities it contains and outlin-
ing proper legislative action to cor
rect them. The law is honeycombed
with errors.
A striking illustration of this
thread of weakness that runs through
the whole gamut of Democratic legis-
lation occurs in one of the most vital
provisions Of the income tax law. 1t
relates to deductions that shall be al
lowed in computing gross income-a
basic element in this system of taxa
tion.
Paragraph B of the law states that
Sin computing income for the pur-
pose of the normal tax there shall be
allowed as deductions" among other
things "losses actually sustained dur
ing the year incurred IN TRADE"
etc. What is the meaning of the
words 'in trade?" The courts must
| decide.
The phrase is capable of an in
finite variety of interpretations AS
construed by the Treasury Depart
ment, deductions from gross income
for losses Gin trade" can be made on
ly in connection with "that which oc-
cupies and engages the time, atten-
ton, and labor of anyone for the pur-
pose of livelihood, profit or improve
ment; that which is his personal con-
cern or interest, employment, occu-
patton, but it is not necessary that
it should be his sole occupation or
employment"
For instance, it is said that if a
grocer has invested in real estate, in
making his income tax return any
real estate profit must be added to
gross income but losses from real es-
tate investment must not be deducted
| from gross income.
From every part of the country
bitter complaints have been made
| against this ruling, and the question
is to be taken to the courts for final
| adjudication. Whether the ruling is
right or wrong, it is the uncertainty
of the statute that reflects upon the
intelligence of the political party re-
sponsible for it.
Nothing but heedlessness could
have permitted it. The tax payer
bears the burden of the blunder, for
it is maxim in governmental affairs
that every doubt in a law is resolved
in favor of the government by the ad-
ministrative officers.
Errors in the income tax law are
too numerous to mention in detail
Witness the fact that in the first few
weeks Of its operation thousands OF
applications for refund were made
One of these has just been allowed
and is fine example of the laws un
certainty.
The Department refunded to one
man who had paid $500 as income
tax all but S12 of that amount. He
had had the help of a revenue Officer
in making his return, yet so indefinite
was the law that for fear of violation
he paid the government $500 instead
of $12.
Examination of the Department de
cisions on the income tax law show.
a mass of contradictory rulings. Ovel
| and over again opinions were re
versed and rereversed, because the
terms of the law did not admit Of
clear Interpretation
Every day additional evidence is
found that adds to the long list OF
Legislative blunders committed by the
Democratic administration. Future
Congresses and the courts must cor.
rect the mistakes, and meanwhile the
people must pay for them