The Washington herald., 1918-09-19
TAX RULE AIDS
SMALL BUYERS
Little Investors Will Gain
by Bond Exemption,
''s Says Holland.

Not the men OF ldTse luCOAlccS -
least the majority Of them. nor those
who are contemplating buying In ek-
cess of $4,000 worth OF the Fourth
Liberty Loan. but instead those who
are spoken Of as small investors, will,
il Is believed. be greatly relieved by
the action of Congress should 1t ap-
prove Secretary McAdoo's recommen-
dation respecting the exemption OF
taxes upon these bonds below GER
tain amount.
This morning a citizen Of New York
who Is often spoken Of as multi
millionaire and who has gained ex-
cellent reputation for his ability and
shrewdness as well as his capacity to
forecast market movements, said that
IL would be very gratifying to men
OF his acquaintance who are in pos
session Of large incomes and who con-
template buying Fourth Liberty Loan
bonds in amount proportionate TO
their incomes II the wise proposition
made by Secretary McAdoo be ac-
cepted by Congress. For IL this be
Gone many hundred thousands, pos
sibly. Of American citizens will be
more fully persuaded to invest a con-
siderable part Of their savings IN
these bonds than would be the case
u me DOllNo mNAN AlooAt ~ NANNANASAA'
L. $. May Have Fortune.
In substance this man of great
wealth said: Il presume I have one
Of the larger incomes which are re-
Ceived by men in the United States
but am willing to say that il the
government needs it or IL the gov
ernmcnt deems it expedient to take
it. l will turn in every penny of
my income to the government and l
will not be alone in doing this, for
some of my friends have told me
that they too will gladly yield to
the government their entire incomes
in case the government asks for
them. Should this be done I and my
friends will of course be obliged to
live upon our principal. That would
% no hardship. especially in view
# the fact that our contributions
would serve to some extent in aid
ing the United States and her allies
in winning a triumphant military
victory
There is. however. another side
to the suggestion that men who
are in possession Of very large in
comes pay these incomes over to the
government no matter what the
rate If the income tax may be. Sec
star Nc.tdoO has recognized thai
is i-1praCt!cabIe. for economic
IONS. to take too much of the
-rCc incomes. For these incomes
re for the most part Immediately
o. cs a0On as possible reinvested in
!-1I-tr.-- or commerce or in busi-
- 'f @c.ivities all of which are nee
=saig To hCal;hfuI national condi-
IL
~. Secretary McAdoo has recent
r J." '7 C7rcfEI nsideratfon, upon
'..-. ,.'c on was based respect
- ' 'mOu1t Of large incomes
~ M be taken by the govern
~ JpCn President.
y 'T' 81. &c c-inion in other parts
Z. p ""u"try is similar to that
E-Is in this city the rev.
r" hiI when IL is finally enacted
I''-, Will contain no provision
j. would be possible or in
y" tfSt President Wilson's sal
hch is his income aside from
hicA h receives from royalties
's'" his H~g,IS. Re taxed Further
"c-r. i seCGnE' to be the common
-"a.ou FCre that it would be not
''-l-- unadvisaDle but unjust if the
Judas ol our FCdCl al Court be COM
Eried 10 continue nayment of some
l~it If their salaries on account Of
Ho Income tax.
President Wilson might. il he were
% DISPOSED and &. the tax were levied
lrCn his salary and income. appeal to
ne courts, so that it could be de-
eTmined whether a tax of this kind
would be constitutional But the
7TOba ii.tiCs are that the Presiden;
would take no action of that kind.
but instead. would submit without
protest to the eNaCtiOns of the law.
Lawyers here saw. however. that it
would be impossible for any Judge
II the Federal courts to ask the court
o Eass upon the constitUtiOnality Of
hat part OF the law which imposes a
* upon their salaries because the
Judges themselves would be the in
teTCstCd parties Moreover. the amount
which would be received on account
Of a tax Of this kind is. relatively
speaking, so small that 1t does not
seem as though Congress would be
Justified, in view of the doubtful
constitutionality. in imposing a tax
Upon these salaries. Apparently pub
lie opinion disapproves of action of
this kind.
The chances are, howeTC:. that IL
4 tax be imposed upon municipal or
state securiti : legal steps will be
taken so that he courts ma" deter
'a'ne or pass TT;-E he constitT:Iunal-
ity Of taxation Of that kind. Mayer
Hylan, Of New York, has alre ady
gone on record as strongly protesting
against the proDosition that munich
pal securities be taxed He appar-
emily believes that. aside from the
question OF constitutionality, taNa-
tion Of these securities would seri-
ously affect the credit of conElun!-
ties and might even go so far as