Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-11-13
LEGISLATION IS NEEDED
T)S|MPL|FY TAX LAWS
BY I. A. FLEMING.

Invested capital" the one great Is
sue in doubt in the war revenue bill. Is
now the subject Of much study and con-
sideration by corporation attorneys the
country over.
The opinion Of one of the most I'M
portant law firms in the country mas
been given to the Investment BANKERS
Association. and this is one suggestion
made by the lawyers:
TT Is not too much to say that as TO
future income the government will lose
much. and may lose most OF the rev.
enue anticipated from the tax; that is.
of course, unless the act Is revised
along sounder and more effective lines.
"As the act is now drawn it seems
relatively easy by one arrangement or
another, to greatly diminish the future
yield of the tax. The very accidents
which make the act destructive to some
forms Of past income point the way to
its avoidance on future income.
No legislation of recent years has
contained so much lt-to-1nterpret
language. Men familiar with taxation
methods and forms, of years OF expert
ence admit their inability to cope with
the knotty problems.
REPRESENTATIVES of six local trust
companies came together yesterday
afternoon and delegated to John b.
Larner and E. J. Stellwagen the task
of continuing the study of the prob
lem. -,
Tt Is to be hoped that Congress will
make plain that which is next to m
possible to unravel," said Mr.: Steil-
wager who has wrestled with the
matter from the date OF its passage:
and declares that digests of the law. OF
which there are many. fail when oirect
explanation is desired.
Under the terms of the law. borrow
ed money is not invested capital, gooo
will Is part of invested capital II the
good will was purchased from another.
but good will created by a corporation
Is of no value as an asset"
The opinion given to the investment
Bankers Association adds:
Dividends on the stock of a taxaole
corporation are not subject to taxation.
and the stock is. therefore. excluded
from computation in determining the
invested capital of the person: firm or
corporation holding it. Municipal
bonds are likewise excluded; corpora
ton bonds are not excluded.
The effect of this provision exclud-
ing both securities held and money
borrowed would seem to be that the
investment banker would not have any
investment capital under the act"
Referring to the scheme for the
valuation of tangible property, the
opinion further says:
TT is plainly impossible for the gov
eminent to determine the value of tan
gible property acquired many years
ago. and if it is to allow a substitution
of the new properties for old the re-
suit will be practically determination
of the actual 1914 values. which is just
what the act. apparently. is intended
not to allow"
Mixed, capable of many meanings.
difficult to determine. ambiguous. ac-
cording to legal talent, the making
plain and understandable, would seem
to be a necessary congressional work
in the Immediate future, If the gov
eminent is to obtain it's revenues.
On the Local Exchange.
Sales on today's session of the local
stock exchange were not large, twenty
four shares of Railway preferred SELL
ing at 20 and twenty-five shares of
Mergenthaler Linotype stock at 13S to
l3S.
Holders of securities, either stocks or
bonds, who will liquidate on this mar
ket must accept steadily declining val
ues. How long these conditions will
prevail remains to be seen. but when
the change does come it may be hard
to get back stocks around the present
price levels.