The Birmingham age-herald., 1915-10-13
Direct Taxation of Large Incomes Would Relieve Poor of Great Burden of Indirect Taxation
INCOME TAXATION TENDS TO SHIFT
 BURDEN UPWARD
Attorney General Defends
 Clauses Exempting Cor porations as Necessary to
 Avoid Double Taxation

Washington. October l2.-Heavier taxa tion on big incomes as a relief from the 'displ oportionate share" Of goveI.- mental support borne by the poor under Indirect taxation was defended today by the government in brief filed with the supreme court in the pending income tax cases
 The brief bears the names of Attorney General Gregory. Solicitor General Davis and Assistant Attorney General William Wallace, Jr., and represents months of study Of all the various attacks on tine income tax, the success of which would reduce the governments Income SS2 ,o00 coo a year
 The ordinary system of indirect taxa . ton on consumption places on the poor persons a disproportonate share of the burden of government support" say the brief, in reply to charge of discrimna- comes of more than s2ooo0.
 Income Tax Helps Poor
 Income taxation tends to shift the burden upward It is undeuable that the greater the income the greater inc ease with which the payment of taxes IS met Even allowing for the normal inevitable increase in the scale of liv- ing he who has the larger income can the more easily shoulder the burden ..f increasing, as the amount of the income increases. not merely the total tax. b,, also the rate of taxation At least Con. gress has. in its discretion. deternniuet that the heavier burden can be carried more easily by the larger income, and IL IS not for the courts to say that such classification is outrageous.
 As to alleged discriminations, the gov. ernment contends Congress has the rec. ognlzed power to make classifications So long as they are not unnatural and are based on real distinction. Exemption of persons from taxation on the first s3oOC income and taxation of corporations on all income is justified on the ground that corporations have no personal or family expense.
 Alleged Discrimination
 Complaints of discrimination against holding companies by requiring corpo- rations and not individuals to pay a tax on corporate dividends are met with the statement there is greater difference between individuals and holding com panies than between individuals and as- tive corporations, and that the court has upheld distinction In the latter instance In the corporation tax cases.
 Collection of the additional tax from individuals and not from corporations is defended as avoiding double taxation The argument that there is an unlawful dis crimination in the tax on husband and wife living together in that they are en- titled only to one exemption of s4ooo is answered with the point that Congress was Justified in making distinction be- tween the separate maintenance of two persons on the one hand and their com bined maintenance at lesser cost on the other.
 The corporation tax decisions are re- ferred to in the brief as authority for any interference of the tax with the formation of holding companies. and ob jections to requiring corporations to col lect at the source is met with the con- tention that there is very real differ ence between a corporation with an in- terest paying indebtedness and one not so organized