Evening star. [volume] (Washington, D.C.) 1854-1972, 1917-08-06
Calls Lenroot Plan Inadvisable.

Oh the SO-Called LenrOOt SurtaxeS on
incomes of over $4,000 added in the
House, designed to raise $66. 0O0, 600,
as follows:
In view of the fact that in addition
to the large increase in the normal
tax and surtaxes upon incomes. the bill
provides for large increase In the war
profits tax of col p0rations and partner
ships. and includes individuals in the
scope of that tax. and in view of the
proba bility that il Will be NC ssary
hereafter to further increas. these
rates in order to provide for increased
war expenditures. your c mlnittee te-
lieves that for the present it is mad
visable to increase the SUI tax rates b.
yond those proposed in the original
House bill"
Retroactive Principle Unsound.
Regarding the elimination of the
House retroactive income taxes on 1915
incomes. which would have produced
$1OS 900, 0o0, the report stated.
This tax seemed in principle both
morally and economically unsound. In
comes of the last year have paid their
taxes. and the balance has either been
spent or saved and added to capital. i'll
which form it will yield returns in the
en- suing years. To tax this tax-paid
inssome again is not only double Ia a
tion OF a peculiarly obnoxious kind. but
VIC uld possibly compel a taxpayer to
impair his capital and thus dlminisn
government sources of taxation 1t
WOULD be one of those disturbing taxes
which would alarm business aad cnecH
Industrial productivity 1t is very p-or
se ,nomy and would hold out threae
Of uncertainty
Discrimination Removed.
The new tax of / cent for each % cents
paid on parcel post package was SAID IN
the report to remove discrimination in
favor Of the railroads and the pareei post.
s.in addition to this" the report said.
"your committee can Sc no intrinsic rea-
son why, in this present emergency, the
government should not impose tax upon
this method OF transporta non. especially
in view Of the fact that the rates on first
and second class mail are increased"
The House per cent taxes upon cleo
tricity, gas and local telephone service
were eliminated because 1T appeared to
the committee that this tax would fall
with very great severity upon the people
Of moderate means as wen as the poorest
classes, who at the present time depend
very largely in the cities upon gas or cleo
tricity to furnish them with both light
and heat for cooking as well as, in many
cases, with power for running small ma
chinery like that Of the sewing machine.
The committee felt that tax Of this
character ought not to be imposed unless
point was reached where il would be-
come necessary to tax everything sus-
ceptible to taxation Light and heat are
the very last things which should be sub
Jet to taxation For similar reasons the
committee recommended that the tax
upon charges for telephone service to sub
scribers be eliminated"
Striking out OF all insurance taxes
from the House bill WAS based upon
the belief that excise taxes upon in
surance II q questionable principle and
-should be subjected to tax only as a
last resort"
Elimination or reduction Of all of tho
dve per cent gross sales tax upon many
manufacturers was defended because
the mnuu1Acturers also must pay high
S income and excess profits taxes. Your
eommittee felt" the report said. that
only where the conditions are excep-
tional should such q manufacturers
gross sales tax be justinable." For
these reasons the House tax on patent
medicinea was reduced to DER cent.