Arizona republican., 1918-09-17
HOUSE DEFEATS
 EVERY CHANGE
 BY COMM |TTEE
But Approves Increased
 Normal and Surtax Rates
 In Considering Amend ments to War Revenue Bill
Republican A. p. Leased Wire]


 WASHINGTON, Sept. 16-Beginning consideration of amendments to the war revenue bill the house in Is min utes today approved the greatly in creased normal and sur-taX rates for individuals, estimated to yield S1,4S2,- GOO and defeated every change pro- posed in the draft of the bill as pre- pared by the ways and means com mittee.
 After spirited controversy, motion to strike out the provisions extending income taxation to salaries of presi- dent, federal judges and state, county and municipal office holders was 'le- feated. Another controversy developed over the provision to tax interest from future issues of state, county and mu- nicipal bonds. but final vote was postponed until tomorrow because of | lack of a quorum.
 | Would Cause Immense Loss
 An amendment proposed by Repre- sentative Hardy of Texas, depocrat, to change the basis of calculating profits from sales of property held by the owners since 1913, also was rejected overwhelmingly after Majority Leader Kitchin had declared the principle ad- vanced would cause revenue loss of $2,000 000 900.
 Besides voting on the question Of taxing income from state, county and municipal bonds, the house tomorrow will consider administrative provisions of the individual income tax sections the corporation income tax provisions and possibly reach the war excess 1 profits sections.
 Summary approval today of the nor mai and surtaX income rates was a general surprise.
 Opposition Sharp But Futile
 Representatives Montague of Vir- ginia, and Walsh of Massachusetts, led sharp but futile opposition to the clause subjecting salaries of federal and state office holders to income taxes. A motion by the former to eX- empt state. county and municipal offi- cials. whom he declared, congress nas no power to tax, was defeated, 72 to 32, while Representative Walsh's motion to exempt salaries of the president and federal judiciary was voted down, ~ to r.
 The section providing that income from state. county and municipal bonds issued in the future with a per sonal exemption of interest on total holdings of S5,000. shall be considered gross income in calculating incomes was attacked. After vigorous discus sion, a motion by Representative Mon- tague to strike out the clause was de- feated on rising vote, AS to 26. Rep- resentative Platt of New York, now ever. made a point of no quorum. and the house adjourned.
 Taxes on Official Salaries
 Opponents of the sections taxing sal aries of federal and state officials ard | dC Of toe n,Nd hniI h divisions. said congres has no power tC levy such taxes, because they infring, upon state sovereignty and are in v:o- ) lation of the constitution. Those sup porting the committees draft upheld both the policy and legality of the pro visions.
 Representative Montague asserted that the federal government has nc power to tax state officials salarie! and cited supreme court decisions |; support his position.
 Representative Crisp of Georgia, saio | the committee doubted the constitu . tionality of the tax on federal judges salaries but that the doubt, in tn emergency, was resolved in favor O
 the government. There is no equit,
 in a s1O,O0o officeholder being exemp
 from taxation while his neighbo
 across the street earning only S4,00 z has to pay taxes" said MT. Crisp. r To Prevent Discrimination Q The provision to tax income fror e state. county and municipal bond: Q which Representative Montague an f others declared would reduce the valu l. of 5000 0000 such bonds now issued I. was supported by Representative n Kitchin. Longworth and others of tn X committee as designed to prevent dis It elimination against Liberty bonds. r Admitting that there is doubt IT. = garding constitutionality of the pro
 posed tax on salaries of the presiden 1t federal judges, state and count IS and municipal officers as we'll as o It the latters securities, RepresentatiN l. Kitchin and others said the bill rC n solves the doubt, in the present ta
 emergency. if not the government an
 that it is highly desirable that the di:
 puted questions be settled by the sl
 preme court in test litigation.