Potosi journal. (Potosi, Mo.) 1894-1929, 1915-05-26
The Weakness Of
Democratic Legislation.

OemOcrdllC Legislation.
Because of imperfeetions in
the income tax law, numerous
amendments will be resOmmend-
ed to the next Congress by the
Treasury Department.
Official experts are quietly at
work on this statute, preparing
a report on the erudities it con-
tains and outlining proper legis-
lative action to correct them. The
law is honeycom bed 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. Itrelates
to deductions that shall be allow
ed in computing gross income, a
basic element 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 deduc-
tons" among other things, loss
es actually sustained during the
year incurred IN TRADE, etc.
What is the meaning of the
words in trade?:" The courts
must decide.
The phrase is capable of an in
finite variety of interpretations.
AS construed by the Treasury
Department, deductions from
gross income for losses in
trade" can be made only in con-
nection with that which occu-
pies and engages the time, atten-
tion and labor of any one for the
purpose of.livelihood, profit and
Improvement, that which is his
personal concern and interest,
em ployment, occupation, butit is
not necessary that it should be
his sole occupation or employ.
ment."
For instance, it is said that il
a grocer has invested in real es.
tate, in making his ineeme tax re
turn any real estate profit must
be added to gross income, but
losses from real estate invest
ment must not be deducted from
gross income.
From every part of the country
bitter complaints have been made
|against this ruling, and the ques
tion is to be taken to the courts
for final adjudication. Whether
the ruling is right or wrong, il
is the uncertainty of the statute
that reflects upon the intelligence
of the political party responsible
for it.
Nothing but heedlesness could
have permitted ii. The tax pay
er bears the burden of the blum.
der, for it is maxim in govern
mental affairs that every doubt
In a law is resolved in favor o1
the government by administrat
i've officers.
| Errors in the income tax law
are too numerous to mention ir
detail. Witness the fact that in
the first few weeks of it's opera
ton thousands of applications fol
refund were made. One of these
has just been allowed, and is {
fine example of the laws uncer
tainty.
| The Department refunded tt
one man who had paid $500 a:
Income tax all but S12 of tha'
amount. He had had the help o.
la revenue officer in making The
return, yet so indefinite was the
law that for fear of violation HI
paid the government $500 instead
of So.
! Examination of the Depart
ment decisions on the income
tax law shows mass of contra
dictory rulings. Over and ove1
again opinions were reversed ant
re-reversed, because the term:
of the law did not admit of s.ea,
Interpretation.
Every day additional evidence
is found that adds to the lonl
list of Legislative blunders com
mitted by the Democratic ad
ministration. Future Congress
es and the courts must correct
the mistakes, and meanwhile tht
beople must pay for them.