The Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1912-1917, 1915-05-18
Failures of Democracy.

Because of imperfections in the
income tax law, numerous amend
ments will be recommended to the
next Congress by the Treasury De-
partment.
Official experts are quietly at
work on this statute, preparing
report on the crudities it contains
and outlining proper legislative &C
ton to correct them. The law IS.
honey combed with errors.
A striking illustration of this
thread of weakness that runs all
through the whole gamut OF Demo
cratic legislation occurs in one of
the most vital provisions of the IN
come tax law. 1t relates to deduc-
tons that shall be allowed in COM
putting gross income-a bacic ele-
ment in this system of taxation.
Paragraph B of the law states
that in computing incomes for the
purpose of the normal tax there
shall be allowed as deductions 5"
among other things Losses actual
ly sustained during the year incur
red IN TRADE" etc. What is
the meaning of the words IN
trader" The courts must decide.
The phrase is capable of an in
finite variety of interpretations. As
construed by the Treasury Depart
ment, deductions from gross in
come for losses in trade" can be
made only in connection with that
which occupies and engages the
time, attention, and labor of any
one for the purpose of livelihood,
profit or improvements; that which
is his personal concern or interest,
employment, 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 ad
ded 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 'ques-
ton is to be taken to the courts
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 a law is
resolved in favor of the govern
ment 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 thous-
ands of applications for refund
were made. One of these has just
been allowed, and is a fine example
of the laws uncertainty.
The department refunded to one
man who had paid $500 as income
tax all but $I2 of the amount. He
had had the help oil a revenue Of
hcer in making his return, yet so
indefinite was the law that for fear
of violation he paid the govern
ment $500 instead of SI2.
Examination of the Department
decisions on the income tax law
shows a mass of contradictory ruiz
ings. Over and over again opin-
ions were reversed, because the
terms of the law did not permit of
clear interpretations.
Every day additional evidence is
found that adds to the long list of
Legislative plumbers committed by
the Democratic administration. Flu
ture Congresses and the courts
must correct the mistakes, and
meanwhile the people must pay for
them.