The Republican journal., 1915-05-20
Washington Letters.

Because of imperfections in the income
tax law, numerous amendments will be
recommended to the next Congress by
the Treasury Department.
Official experts are quietly at work on
this statute, preparing report on the
crudities it contains and outlining proper
legislative action to correct them. The
law is honeycombed with errors.
A striking illustration of this thread
of weakness that runs through the whole
gamut of Democratic legislation occurs
in one of the most vital provisions of the
income tax law. 1t relates to deductions
that shall be allowed in computi G gross
income-a basic element in this system
of taxation.
Paragraph B of the law states that
SIN computing income for the purpose
of the normal tax there shall be allowed
as deductions among other things ''los-
SEES actually sustained during the year
incurred in trade" etc. What is the
meaning of the words Sin trader The
courts must decide.
The phrase is capable of an infinite
variety of interpretations. AS con-
strued by the Treasury Department, de-
iu ctions from gross income for losses
sin trade can be made only in connec-
ton with chat which occupies and en-
.pages the time, attention and labor OF
anyone for the purpose of livelihood,
profit or improvements; that which is his
personal concern or interest, employ
rnent, occupation, 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 estate 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. Wheth-
er the ruling is right or wrong, it is the
uncertainty of the statute that reflects
upon the intelligence of the political
party responsible for it.
Nothing but heedlessness could have
permitted it. The tax payer bears the
burden of the blunder, for it is a maxim
IN governmental affairs that every doubt
in a law is resolved in favor of the gov
eminent by the administrative 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 lust been allowed, and is fine ex
ample of the laws uncertainty.
The department refunded to one man
who had paid $500 as an income tax all
but S12 of that amount. He had had the
help of a revenue officer in making his
return. vet so indefinite was the law
that for fear OF violation he paid the
government $500 instead of Sl2.
Examination of the department de-
cisions on the income tax law shows
mass of contradictory rulings. Over and
over again opinions were reversed and
rereversed, because the terms of the
law did not admit of clear interpreta-
ton.
Every day additional evidence is found
that adds to the long list of legislative
plumbers committed by the Democratic
administration. Future Congresses and
the courts must correct the mistakes,
and meanwhile the people must pay for
them.
WASHINGTON, D. c., May II, 1915
In the closing days of Congress the ques-
ton of the national defense came active
" to the front. Congressman Gardner
presented an astounding summary of our
military and naval unpreparedness, cul-
ninating in direct charge that the ap-