The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-17
Attempt to Exempt State and
Municipal Salaries Fails,
n to II.
BITTER FIGHT ON BONDS
Vote on This Provision De.
ferred-Dry Goods Men An.
peal to Senate Committee.
Special Despatch 70 THE srs.


day of final consideration OF the revenu.
bill in the House. proceeding under the
i've minute rule and reading the hIu
from start to finish for amendments the
personal income tax and the income
supertax provisions were approved nv
the entire body without a single attempt
to amend them. These provisions /,
was feared would be attacked from
many quarters.
The House hit a snag, though when
1t reached the portion OF the bill pro.
viding for taxing the salaries Of public
oficials OF all sorts. Representative
Montague tVa) led the fight aga!ns,
this, first attempting TO exempt the SAL
aries OF State officials from the income
tax and the supertaxes.
war should not make US hystericpl
The maintenance OF the equilibrium ~
the Federal and State Governments a
the foundation OF our Government" M
Montague said. land in my judgment
the enactment of this tax will disturb
that foundation. 1t Is not the tax but
the principle behind 1t to which Object
bad Precedent Feared.
II submit that the imposition o. M,
tax will lead to bad precedent which
will be destructive OF the fundamental
rights of our people. and sincerely be-
lieve that the game is not worth the
candle We should not. under the war
exigencies confronting US. depart from
the established traditions and principles
laid down by authorities, that the Sta'a
Government cannot tax the Fedora,
Government and that the Federal Cow
eminent cannot tax the State Govern
ment"
In reply Representative Crisp (GaD
declared that in levyng war taxes L
would not be fair to make the private
citizen with a salary pay tax on Il
and exempt the salary OF a state Official
II do not share the fear of the gentle
man from Virginia that this invades the
rights of the States" he continued. He
said that since the income tax amend
ment to the Constitution had been
adopted the placing Of a tax on The In
come OF state official was not uncon-
stitutional.
After Representatives Graham tPa>
and Kitchin IN. c. had been heard. tho
former attacking the tax and the latter
supporting IT, the House voted 70 TO -,
to retain the tax in the bill.
Taxing of President.
Representative Walsh ,Mass) then o.
fered an amendment to strike from the
bill the provision taxing the incomes no.
only Of State officials but of the Pres
dent. the entire judiciary and all rnnlc-
ipal officers After another hot debate
along the same lines as that precipitated
by the Montague amendment the House
rejected the amendment. II to II.
The bitterest fight came on the pro
vision in the Kitchn bill imposing The
income supertaxes on State and mun!''
ipal bonds. This provision Mr.. Montague
and many other members bitterly on
posed as a blow at the foundations ~
the American governmental system
1t was pointed out repeatedly that =
this tax were permitted under the Coz
stitution any state would have tho co.,
rr-nonding right TO tax the bonds oi TIE
| Federal Government. and the two
| branches of the Government eventually
could tax each other out of existence.
The Ways and Means COMMITTEE
| fought for the provision on the GrourI
| that the coming issues of Liberty bonds
| must he made so attractive that th"r
| will he readily marketable They de-
Tended the constituuonality Of tA" tax
| also.
| Attacked by Cooper.
! It was even suggested that the House
go ahead and approve this tax and leave
! Il to the courts to determine the com
| stitutionality of the tax, on the thc"r'
that 1t would not be called into legal
question at all. Representative 'Nop"'
| (Wis) however, declared that any mem
Der Of Congress voting for anything that
| he had any suspicion was unCons'llu-
tional was violating his oath Of "t'c"
When vote was finally taken twenty
six members arose in favor Of striking
| from the bill the tax on stat" ana
municipal bonds and forty-eight oNp's-
| ing 1t. .,
Representative benjamin Fairch 4
| On. W demanded that the whole we'"
bership Of the House get chhNe" 10
wee on this highly important que.
and made the point that no quorum was
present. When he insisted on IN" N"'
| Representative Kitchin moved the an,
| journmeHt of the House and tho '"".
vote on the bond matter went over unit
| tomorrow.
once the House is through VITA '.'
CORPORATE income and the war and ~ Pcs
profits sections progress on the nIoasA'r
| will be much faster and may perDll' pas
! sage OF the bill before the end Of ''e
! week.
senate Committee HcnriuG.
A warning that eventual ruin f'r 80
| whole dry goods business of the '"'lHF
might follow the conclusion OF pca'' ,
less the inventory system was o.''f.i
| in the provisions OF the Revenue y ''
given TO the Senate Committee T..
| nance by s. l.. Swarts of New N'-'
counsel for the National Dry Guo.S Ne
| sociation.
The committee was told that ino "'--
ent merchandise values were - ""'
mally high that 900 per cent, au"N" g
pre-war normal was not an a'''I". ,
state of affairs In most OF th' lines ''
goods carried by the merchants
Tho suggestion advanced 10y the H'.
L ~ =