The Washington herald., 1918-08-08
MAY EXTEND
INCOME TAX
TO PRESIDENT
Amendment to Revenue Bill
Would Include All
State Officials.

The President Of the United States
will have to pay an income tax on his
salary Of s75.Ooo<if an amendment to
tho revenue bill adopted by the Ways
and Means Committee yesterday
should become part of the law. The
tax would amount to something over
$4,000 under the new rates agreed upon
by the committee. Under the rates Of
the present law it would be 5000.
Justices of the> Supreme Court and
all other members of the judiciary.
and all other officials, Federal, State,
county and municipal. would be in
ciuded In the rate.paying class. They
are exempt under the present law.
There is a story around the commit
tee rooms to the effect that President
Wilson has always paid his income
tax, although specifically exempted by
the law.
Decision Up to Courts.
The committee Is not at all sure
that the proposal to collect income tax
from the President and the other offi-
cials named in the amendment would
be constitutional. In fact, the CON-
mittee took the position. in agreeing to
the amendment, that the question
should be passed up to the courts for
an authoritative decision.
In 1869, Attorney General Hoar
wrote an opinion to the effect that a
tax on the salary of any Of the off,
cials in question amounted to a
"diminution" of that salary, which
is unconstitutional. The committee,
after a long discussion of the Ques-
tion today, reached the opinion that
an income tax was not a diminution
of the salary and that 1t is not pro-
hibited by the constitution.
Several members Of the commit
tee took a decided stand in favor
of making the income tax apply to
the salaries of these officials in
cluding the President. They con-
tended that such salaries. by whom
soever earned, should not be permit
ted to escape taxation in time of
war. They cited in support of their
argument the words of the income
tax amendment itself, which reads
that the tax should be levied on all
incomes from whatever source de-
rived"
The committee decided also to
change the law so that the interest
on State, county and municipal
bonds might be taxed. The tax
would not apply to bonds issued for
the refunding of existing indebted
ness.
The committee has serious doubt
as to the right of the Federal gov
ernment to tax securities of this
character, but 1t decided to let the
amendment go in and allow the
question to be settled in the courts
in the same manner as the right to
tax officials salaries is to be deter
mined.
Permit InstalIment Payments.
The new bill will contain a Sec
tion to permit payment of income
tax in installments, the plan being
as follows: One-third of the total
amount to be paid when the return
is made; one-third within three
months, and the balance within six
months of the date of the return.
No interest or other charges are to
be made on these deferred pay
ments, but an inducement for the
payment of cash will be made in the
provision that persons who trans
NIT the full amount OF cash with
their income tax return will be en-
titled to a deduction equal to 1 and
1-9 per cent of the total amount OF
the tax.
The committee adopted an amend
ment to the inheritance tax section
to provide for the inclusion OF the
proceeds of all life insurance poll
cies in excess of $4,000 as part of
the gross estate.