The Birmingham age-herald., 1915-12-09
Proposes That Congress ln- crease Income Tax for
 Preparedness Revenue
DESIRES TO LOWER
 EXEMPTION LIMITS
Says European War Causes Heavy !. Decrease In Customs Revenue, But Nation to Be Congratulated On
 It's Financial Stability

Washington, December s.--Radical changes in the income tax to reach thousands not now subject to it's pro- visions and to improve the machinery
 gross 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 pro vided. The Secretary proposed to lower the exemption limits so as to tax mar $3000, and single persons with $2000 in- comes. The exemptions now are $4000 and $3oo0 respectively.
 Increase in the collection force, re-
 quirement that returns must be made of gross income in place of net income, and change so that the tax shall not be withheld at the source, were among MT. McAdoo's other suggestions. He | made no estimate of the number of | persons who might be taxed if the amendments were adopted nor the amount that might be expected, but in connection with his request for larger collection force he points out that ex- animation of the past personal and corporation returns showed that 63 per cent of those inspected disclosed that additional tax was due the government. On the basis of the examinations, the Secretary says that apparently more ho ip ncI m
 more than s2o.S91, 900 in corporation tax still is due the government.
 TO ELIMINATE INACCURACY Many inaccurate returns are made," said the report, some deliberately and some ignorantly, and there are without doubt, wholesale evasions of the law throughout the country. It is absolute ly certain that the government is losing
 through inaccurate returns and eva sions 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 IS re- quired by law"
 In keeping with his recent announce ment MT. McAdoo suggested the present stamp tax and the existing duty on raw sugar should be retained in force, and said again that no issue of bonds is nec-
 essary either to provide for current ex- penses or in anticipation of added bur dens incident to policy of military pre- paredness
 "The policy of providing for the ex- penditures of the government by tax ation and not by bond issues," said the report, lis undoubtedly sound one and should be adhered to. A nation no more than an individual. can go constantly into debt for current expenditures without eventually impairing credit. wise, sound and permanent policy of raising the additional revenue required for preparedness and the expenditures of the government should therefore be devised and adopted"
 WAR EFFECTS CUSTOMS MT. McAdoo expressed the belief that with a return of peace In Europe GUS toms receipts which fell off $S6,000,000 in the last year will increase and that the legislation suggested, with a pro vision to make the surtax of the income tax law applicable at $10,000 instead of $20,000, the whole or part of the addi- tional revenues can be raised Taxes on gasoline, crude and refined oils horse power of automobiles and various oth- CT things are suggested as further revenue raising measures.
 The total estimated appropriations ., next, MT. McAdoo puts at $1,2S5,8 ,857, 1908, including $S16,364,S79 for the postoffice, which is reimbursable and about $90,- 000,000 more for the Panama canal and sinking fund. Receipts for the same year based on existing law without extension of the sugar duty or the emergency tax, MT. McAdoo puts at $5S0, 200, ,O00 and ordinary disbursements at $S32 901000, leaving an excess of disbursements over receipts N legisla- tion is not passed to change conditions, of $252,701, 900. As explained in his re- cent statement, however, that amount would be reduced to about $50,0O0,O00 by the extension of the emergency and sugar tax laws.
 BRIGHT FINANCIAL SITUATION Secretary McAdoos report says the people of the United States have reason to congratulate themselves on the finan- cial and business condition of the coun- try after the serious situation which
 confronted them year ago.
 ''The European war produced inevitable