New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-21

I q
attention, in spite Of the fact that it
deals with very important problem.
1t reads as follows:
the Commissioner OF Inter
nal Revenue, with the approval of the
Secretary of the Treasury, may, IN
der regulations prescribed by him,
with the approval of the Secretary of
the Treasury, require all internal
revenue tax payers, who are required
by law to render returns, to pay
without prior levy, assessment or
notice, and at the same time as the
return is required to be made, or in
monthly instruments thereafter, any
such internal revenue tax or portion
thereof, any provision of law fixing
any other time as the time when such
tax is due to the contrary notwith-
standing. Provided, that the whole of
such tax shall be paid before the ex-
piration of the time fixed by law for
such payment. All penalties provided
by existing law for failure to render
return and pay tax when due are
hereby made applicable TO any failure
to pay the tax at the time required
by such regulations.
And the following section provides
that
collectors Of internal reve-
nue. are authorized to receive at par
certificates of Indebtedness . q.
in payment Of income and war profits
The main objects of these pro-
visions presumably are to relieve the
money markets of the periodic strain
incident to the payment of taxes and
to create broader demand for short
term government obligations. 1t is
doubtful, however, if the desired
ends will be accomplished by this
measure. Tax payments will be
extraordinarily large next year, and
the burden on the money markets
will be correspondingly heavy. The
United States Steel Corporation
alone will have to pay S20O,O00,0O0 in
taxes, it is estimated, and while that
will be the largest single impost, it
will represent only a tenth of the
total amount to be raised through
taxation in various forms-mainly
through income and war profits
levies.
Against these payments individuals
and corporations alike are already
building up huge reserves of cash.
On the assumption that payment
would not be required before June 10
next, they have, in some instances,
effected arrangements with banks
and trust companies under which
they were assured of good rate of
interest, with the understanding that
deposits would not be disturbed prior
to the usual date for tax payments.
These arrangements would, of
course, be upset under the Senate
hill, thus entailing a loss of interest.
! That, however, is not a very grave
objection, since investment in
Treasury certificates of Indebtedness,
convertible into tax receipts, would
also yield fair return. The danger
lies in the indefinite wording of this
section Of the bill. The whole matter
is left in a state of suspension,
where, if the bill passes in it's pres
ent form, it will remain until the
Commissioner of Internal Revenue
reaches a decision as to the time on
which he would like to have taxes
paid. He might arrive at and an
nounce such a decision at an early
date; on the other hand, the decision
might be long delayed. Business men
end bankers are none too confident
that the Treasury Department would
pursue the wisest course. If the Com
missioner should make an eleventh
hour call for payment of taxes with
the return a money panic might be
precipitated. Meanwhile the banks
would be laboring under a handicap,
which would probably tend to check
business activity, since the uncer-
tainty would compel them to adopt
an Ultra conservative policy in max
/ ing loans. There seems to be no good
reason why the law should not
specify a date or series of dates
for the payment of taxes. At the
same time, it would be wise to fix the
maturities of Treasury certificates of
/ Indebtedness in an amount approx
mating the estimated tax payments
to correspond with the date or dates
Of such payments.