New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-10-09
Oficeholding Tax Dodgers

Much of the criticism of the per cent
tax imposed by Congress on excess earn
incs Of individuals seems to us to be mis-
directed What the conference committee
had in view when it suggested this new
tax was TO equalize conditions between the
excess earnings Of persons organized as
corporation and those of persons working
a, partnership or AS individuals. 1t is be-
side the question to say that this new TAX
5iscr;minates between individuals who
eniov an income from investments and
those who earn income from personal SER
vices. Income Of all sorts, barring some
unwise exemptions which we intend to dis
cuss further on, is taxed regardless OF It's
source. Only what Congress regards as
excess earnings, whether Of individuals or
of corporations, are dealt with IN the
paragraphs of the excess profits section
which were added in conference.
The vicious thing which the committee
did. in our opinion, was TO exempt from
the individual excess earnings tax the
salaries of Congressman, Of all United
States officials and of all officials OF the
states. the territories and the District OF
Columbia That was an exhibition OF petty
self-considerat:on, so far as the Repre-
sentatives and Senators who voted for the
conference report were themselves con-
cerned. Ii showed a meanness OF spirit
which the country has every reason to re-
sent. There is nothing but empty pretence
in the apology for this cheap taX-dodglhg
escanade which Mr.. Kitchln has offered.
He saws that the salary drawn by mem
her of Congress does not represent re-
turn from a profession or occupation
What else can il represent? Does II repre-
sent income from an investment? Even
Mr.. Kitchin will hardly make clam OF
that sort. In the income tax law salaries
If REPRESENTATIVES and Senators are sub
Iect to the Federal tax, just as ordinary
salaries are. They clearly represent per-
sonal occupational earnings. They ought
10 be taxed as such, in so far as they eX'
coed S6.OOO-the limit fixed by Congress
beyond which individual earnings IN gen
eral become excessive
In order to strengthen their own fimsN
claim of exemption Mr.. kitchin and ms
colleagues also exempted from the excess
earnings tax the salaries of all officers ant
emploves of the United States. This &C
ton. of course, was also selfish after
thought. Officials of the United States pa!
an income tax on their salaries. Beng al
employe of the government Is even NOR
undeniably an occupation since the tenure
of Office is more permanent. Excess occu
n. national earnings of government Officials
N ought. therefore, TO be no more sacred
. from the tax collector than the excess oc
cupational earnings Of non-officeholders
The latter will have no patience with al
effort Of this sort to create select arts
tocracv of officeholding tax dodgers
The basis Of such an aristocracy was
unfortunately, laid in the income tax sec
tions of the Underwood tariff law Of 1913
That law exempted from its provisions tn
salaries of all state and territorial Office
holders and Of all oficeholders of munich
palities. counties or subdivisions of state
and territories. The Sixteenth Amend
ment. declared in force some months be
fore the Underwood law was passed. gav'
Congress the power Ito lay and collec
taxes on income, from whatever source de
rived" In spite of this ample warran
Congress reverted to the custom of eX
empting from Federal taxation the com
pensation Of state employees and incom
from state bonds.
Having up to that time exempted from
taxation all income from national securi
ties. Congress may have felt justified II
also exempting-to he logical as well a
courteous-all income from state securl
fies. But now that income from the new
Liberty Loan bonds has been subjected Il
taxation there is no substantial reason
wbv income from state bonds should b.
any longer exempted. Nor is there an!
Good reason why Congress should exemp
from income and excess earnings taxes TIT
salaries of state, county and munlclpa
officials.
These last officials now form a muci
overfavored group. At this time the!
enjoy extraordinary privileges. They arr
exempted from the selective draft. Their
salaries are protected from both the IN
come tax levy and the excess earning
levy. There is no justification for thes'
determinations except an ancient de
liverance of the Supreme Court TO th'
effect that since the states are not allowed
10 tax the agencies of the Federal govern
ment the Federal government ought moi
TO attempt 70 tax the agencies of the state
Governments. As matter Of fact, th'
I.dora1 1,nrernmenl for long Tune I'M