Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1918-09-23
FARMER HARD HIT
BY WAR TAX BILL,
M'FADDEN SAYS
Congressman and State Cham
Der of Commerce Secretary
Point Out Injustices

That farmers and businessmen will
be unjustly assessed if the new war
tax bill goes through as 1t stands is
the gist of { statement issued to-day
by Congressman l.. T. McFadden,
chairman and Paul Littlefield, secre-
tary of the State Chamber of Com
merce Special Committee on National
Tax Legislation.
Farmers and businessmen cannot
be cognizant of the attempt made in
section 210 of the revenue bill of 1 91S
recently passed by the House of Rep
resentatives and now in the Senate,
to tax their property upon the sale
of the same under the guise of a tax
upon income" says the statement,
which continues:
This section provides that for the
purpose of ascertaining the-gain de-
rived from the sale of real and per-
sonal property, in the case of prop
erty acquired before March /. 1913,
property shall be valued at the fair
market price as of that date, and in
the case of property acquired after
that date the cost thereof.
ANY increase in the selling price
OF property sold during the year
1918 above the value as ascertained
Iby the revenue bill, shall be consid-
, cred income and taxed under the
AuNNo piOpOoCu III lilS
bill.
Assessment Against Property
Thfs tax practically amounts to an
assessment against property and not
n tax upon income for the reason
that the purchasing power of the
, dollar which is our standard of value
has fallen so per cent. since March
l, 1913, so that the dollar of 1918
will purchase only one-half what 1t
wnu11 havn H.,
ties in 1913 and the exchange value
of all property measured in dollars
! is therefore twice what it was In
1913, in order to obtain the same
| value in commodities for the prop
erty sold.
''This-can be more clearly illustrat-
ed by the transaction of a farmer
who purchases a farm March /, 1913,
for $4,000, keeps the farm for five
years and sells it March l, 1918, for
$4,000. Under the revenue bill, the
difference between what he paid for
the farm in 1913 and the price for
,, which he sold the farm in 1918,
which is $1,000 is income profit for
the year 1918 and taxable as such.
The $4,000 which the farmer re-
ceives for his farm in 1918 will not
purchase any greater quantity of
commodities than the $4,000 would
nave purchased IN 1913 owing TO the
rise of 100 per cent. in prices.
This bill then practically compels
all owners of real estate to either
hold the real estate until after the
war or if they sell the real estate at
fair value considering the depre-
citation in the purchasing power of
the dollar, they must pay percent
age tax called income tax, but really
levy against the property upon its
sale.
Tax on War Profits
The same method of taxation is
applied in levying war profits.
The earnings of a plant covering
period of from five to eight years
ago G911, 1912, 1919, are taken and
compared with the earnings of this
year, any increase in earnings this
year over the period of from five to
eight years ago, are war profits,
without taking into account the
shrinkage in the value of money.
This is unjust as any value COM
puted upon the basis of the dollar of
1918, will give only one-half the
money value of the plant to-day. So
to earn the same return in real value
on plant this year as was earned in
1918, the return must be double the
number of dollars to equal the earn
ings in dollars of five years ago."