The Republican. [volume] (Oakland, Md.) 1877-current, 1915-05-13
FROM THE NATIONAL CAPITAL.
lmperfeC:iOns of The Income Tax
Law discussed

Law discussed.
Washington. d. C. MAY 12.-Because
Of imperfections in the income tax law,
numerous amendments will be recon-
mended to the next Congress by the
Treasury Department.
Official experts are quietly at work on
this statute, preparing a 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
CT weakness that runs through the
whole gamut of Democratic legislation
occurs in one of the most vital pro-
visions Of the income tax law. 1t re-
lates to deductions that shall be allowed
IN computing gross income, a basic ele-
ment in this system of taxation.
Paragraph B of the law states that
in computing income for the purpose
OF the normal tax there shall be allowed
as deductions" among other things
losses actually sustained during the
year incurred in trade" etc. What is
the meaning of the words Gin trade?"
The courts must decide.
The phrase is capable of an infinite
variety of interpretations. As constru-
ed by the Treasury Department, deduc-
tons from gross income for losses Gin
trade" can be made only in connection
with ,at which occupies and engages
the me attention, and labor of anyone
for be purpose of livelihood, profit OF
inf vement; that which is his personal
ccnc> or interest, employment, occu-
patton but it is not necessary that it
should be mig sole occupation or employ
ment.
For istance, it is sad that if grocer
has inv sted in real estate, IN making
his inc, tax return any real estate
profit st be ADDED to gross income
but from real estate investment
mus ededucted from gross income.
7 cry part Of the country bitter
c. have been made against this
n the question is to be taken
to the =. Irts 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 responsible 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 law is resolved in favor of
the government by the administrative
officers.
Errors in the income tax law are too
numerous to mention in detail. Wit
ness the fact that in the first few weeks
of its operation thousands of applica-
tons for refund were made One of
these has just been allowed, and is
fine example of the laws uncertainty:
The Department refunded to one man
who had paid $500 as income tax all but
$l2 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 CT violation he paid the
government $500 instead of Sl2.
Examination of the Department
decisions 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
blunders committed by the Democratic
administration. Future Congress and
the courts must correct the mistakes,
and meanwhile the people must pay for
them.