New-York tribune., 1918-12-18

@ as ''Eomes zones and profits arc concerned
suhseonso," measure, to be amended by a
asnastHeht Congress only when wo c.n
ascertain what the govcrnn,em+ e, we e,an oa,.
gu" what the country can stand"
Champions Other Parts
On other phases of tho nm v,,;,,,
a WHOLE he strongly chamn;onsa md''S Son as
"eor Penrose spoke in part "foi as foi,ows. nvs'.
me bill has had exhaustive consid.
"ra',on v, %. IN the committees of the House
" SENATE for period cxtending over
,neVsrai months. Hearings have heon
n mau' intormaton has been received
.,om oihclal experts and commun;cn-
Slons >hs from taxpayers fully recitinp
-, Il take this opportunity to commend
.ne SPIRIT OF patriotism free from any
n'11 ;n th OF partlsanship. which prevailed
me consideration OF the bill. In the
1oellherations Of this committee. which
..reQuently in the history of the coun-
01y has been the centre of political
S.rIe wagcd over economic questions,
"l''y one purpose seemed to prevail
ana that was to raise the taxes re-
luired tor the needs of the govern
ment ny methods fair and equitable
should also like to say that a sim
way spirit prevailed among the taxpay-
ers who appeared before the committee
or saw the members thereof in per
Sonal interviews. | do not recall a
single important case where exemption
from taxation was requested for anv
section or industry. The single desir.
on the part of the taxpayers seemed to
be that the taxes should be levied along
llnes fair, equitable and sound from an
economic point of view. Further than
that no claim was raised
Praises Tax Board
I'm the act of 1917 many glaring
Inconsistencies and omissions exist. 4
large number OF these defects were
cured by the rulings and construction
on 'he tax advisory board, created and
supported by the Secretary of the
reasury and the Commissioner OF In
ternai Revenue. and ! take .this oppor-
tunlty to express my appreciation of
tte invaluable work accomplished in
TINS connection by the board. It's rul-
lngs and constructions have been sane,
wise and courageous, and have resulted
IN my oplnlon, in preventing many dis
astrous results which might have fol-
lowed the act of 1917 had the board
not undertaken to interpret the act
on board and equitable lines.
The remarkable feature about the
board has been its lack of legal power
to determine finally taxes or construc-
tlons. It's power has been entirely Of
Il recommendatory character and / do
not know of any case of Importance
where It's decisions have been over
ruled. The taxpayer has had the priv
ilege of appealing directly to the board
and on the whole ] recall few bureaus
of the Treasury Department which
have administered such trying and
arduous duties more effectively. The
board has been retained in the present
bill and it is worthy of note that it
has been the deliberate purpose to re-
tram from bestowing any actual power
upon the board beyond that of recon-
mendation, the thought being that it
can perform its duties most effectively
and retain the confidence of govern
ment officials and taxpayers moro firm
ly by continuing its powers as purely
recommendations.
Confusing Defect Corrected
III think it we'll to call particular at
tention in passing to very confusing
defect in the present law which has
been corrected in the pending bill. T
refer to the very Objectionable feature
of the 1917 legislation in that the in
come tax was left spread through two
statutes. This made it difficult for the
taxpayer to find out what his rights
and obligations were. In the present
bill these taxes have been put in a
single statute.
ut was most confusing to the tax
payer to be confronted with this in
dependent extension of additional taxes
running all through the law of 1917
including excess profits taxes. The
present measure is a complete codi-
fication of the tax laws, so far as
concerns the internal revenue system
"The question of subjecting individ-
uals and partnerships to the war excess
profits tax was given very ample at
tention and consideration by the COM
mittee. Their exemption from this tax
is an apparent discrimination against
industry which happens to be carried
on under the corporate form | became
convinced, however, that because of the
high surtaX rates to which individual
incomes are to be subject, even where
derived through partnerships, this dis
crlmination is more apparent than real,
and that the difficulties of placing in
dividuals under the tax are insuper
able.
Il am the more reconciled to this
conclusion because of my belief that
in the interests of the economic and
cal profits tax, however labeled, oughN
in the near future, to be altogether
abolished. In their places should be
substituted some carefully worked out
scheme of general and uniform taxs-
tion upon income" :
Recognition of Losses
''rhe nature of the incomet tax is
readily understood, and it is of the
new and ameliorative features only
that ] wish to speak," the Senator con-
tnucd. 81 should like now to call par
ticular attention to the admirable
amendments looking to adequate recog
milton of losses, l call attention par
ticularly to the amendments relating
to shrinkagc in inventory value, con-
cerning which many communications