New Britain herald., 1915-12-08
RADICAL CHANGES
 IN INCOME TAX To Reach Thousands Now Not
 Subject to Its Provisions PROPOSED BY SEC. MCADOO

Secretary of Treasury in Annual Re
 Needed Additional Revenue For Ma
 tiOnaI Defense Plans.
 Washington, Dec. S.-Radical changes in the income tax to reach thousands not now subject to it's pro- visions and to improve the machinery of collection were suggested to con- gress today in the annual report of Secretary McAdoo as means by which the greater part of the additional rev. enue needed to pay for the administra- tion national defense plans can be provided. The secretary proposed to lower the exemption limits so as to tax married persons with incomes as low as $3,O0O, and single persons with $2,OOO incomes. The exemptions now are s4,OOO and $3,OOO respectively.
 Increases in the collection force, requirement that returns must be made of gross income in place of net income and a change so that the tax shall not be withheld at the source, were among MT. McAdoo's other sug- gestions. He made no estimate of the number of persons who might be taxed if the amendments were adopted nor the amount that might be ex- pected, but in connection with his re- quest for a larger collection force he pointed out that examination of the past personal and corporation returns showed that 63 per cent of those in- spected disclosed that additional tax was due the government. On the basis of the examinations, the secretary says that apparently more than 4,600,000 in personal tax and more than $2O,- 891,O0O in corporation tax still is due the government.
 Many Inaccurate Returns.
 Many inaccurate returns are made" said the report, some delib- erately and some ignorantly, and there are without doubt, wholesale evasions of the law throughout the country. It is absolutely certain that the government is losing through in- accurate returns and evasions of the law a sum many times greater than the cost of the necessary field force to investigate and check the returns and to bring to account those who are failing to make returns as re- quired by law
 In keeping with his recent an- nouncement MT. McAdoo suggested the present stamp tax and the existing duty on raw sugar sh ould be retained in force and said again that no issue of bonds is necessary either to pro- vide for current expenses or in antici- patton of added burdens incident to a policy of military preparedness.
 Policy Good One.
 ''The policy of providing for the ex- penditures of the government by taxa tion and not by bond issues," said the report, 'is undoubtedly a sound one and should be adhered to. A nation no more than an individual can go constantly into debt, for current ex- penditures without eventually impair ing credit. A wise, sound and perma- nent policy of raising the additional revenue required for preparedness and the expenditures of the government should therefore be devised and 
 Mr. McAdoo expressed the belief that with a return of peace in Europe | customs receipts which fell off $36,- 100000 in the last year will increase and that the legislation suggested, with provision to make the surtax of the income tax law applicable at $1O,OOO instead of $20,00O, the whole or part of the additional revenues can be raised. Taxes on gasoline, crude and refined oils, horsepower of auto mobiles and "various other things" are suggested as further revenue-raising measures.
 Appropriations $1,2s5, 1857 sos.
 The total estimated appropriations next, MT. McAdoo puts at s1,2S5,- S57,sOs including $316, 6,364,S79 for the postoffice which is reimbursable and about s90,OOO,OOO more for the Pan- anna canal and sinking fund. Receipts i for the same year based on existing | law without extension of the sugar | duty or the emergency tax, MT. Mo- | Adoo puts at $5SO,20O,0O0 and ordi- 1 nary disbursements at $832, 900, l leaving an excess of disbursements | over receipts if legislation is not | passed to change conditions, of $252,- l 7O1,OOO As explained in his recent l statement, however. that amount | would be reduced to about $50, | 900 by the extension of the emergency 1 and sugar tax laws.
 Secretary McAdoo's report says the l people of the United States have req son to congratulate themselves on the i financial and business condition of the | country after the serious situation