The Bridgeport times and evening farmer., 1919-09-04

In a memorandum to "a public man in Washington" given out yes
 terday by its author, Otto II. Kahn
 of the firm of Kuhn, Loeb X Co,
 suggests the appointment by the Gov
 ernment of a non-pOliucaj body of
 experts to study the effects of the
 various kinds of taxation which have
 been in force during and since the
 termination of the war, and to make
 recommendations to Congress based
 upon such study. MT. Kahn. who
 submitted the memorandum in re-
 spouse to a request from the un-
 named official for his views on the
 high cost of flying, makes plain that
 he believes it to be demOnstrIblo
 that ''the unscientifc system of tax
 auOn adopted in this country since
 1917" has played a considerable part
 in boosting prices.
 Denying that il is his wish to ob-
 ject to the obvious purpose under
 lying our war taxat ton, to impose the
 greatest burden upon those best able
 to bear it; and agreeing that taxation
 must be laid in accordance with the
 dictates of social justice, the banker
 concludes that the very extreme of
 the burden laid upon business and
 income has partially defeated the
 purpose which the framers of our
 taxation legislation apparently had in view, and at the same time has given rise to certain unforeseen and trOub- Ious developments as invariably happens in the case of extreme measures, especially where economics are involved Now that the emer- gency of the war is over, I believe that the entire matter should be sub jected to unprejudtced and competent critical review
 After concediug that the farmer, the wage worker and the salaried man and woman are entitled because of the diminished purchasing power Of the dollar to a prOpOrtionate in | crease in income, the memorandum insists that the owner of industrlally invested capital has suffered similar l ly. while in addition thereto ne IS | subieck to 9 heavy excess profits tax and, if his income is large. to an 1 income tax of unparalleled severity. | Leaving out of account, however, the relatively small number of these in 1 possession Of large incomes and de- 1 dning owners of industrially invested capital as, primarily, the storekaeper, | the average merchant, and the mil | lions who derive their incomes, all | or in part from investments in cor poration securities, MT. Kahn urges 1 that such ''by the same token as the farmer, the wage worker, and the saIaried man, feel the need of a | larger return than formerly
 l TO emphasize his argument that spectacular earnings of certain indi- l viduaIs and corporations afford no l just criterion as to the earnings of 1 business a s a whole and to show that | there are numerous cases where ! earnings have shrunk since the war i the writer quotes from a recent in l vestigation in England, where. ho l says conditions appear to be similar i This investigator concluded that thz 1 increase in cost of certain articles 1 during the past two years as com | pared with the two years before the
 war had been divided so that - | per cent. went to labor, 10 per cent l U the State through taxation. anI 2 ! rer cent. to capitol.
 i Thus it is set forth that the return l on industriauy invested capital nc doubt has been diminished on the 1 whole, MT. Kahn arguing that if ii be taken into consiTe ration that thc 1 purchasing power of the dollar has | shrunk nearly one-haIf. it will be seen that the actual yield is mucr less than it was prior to the war and that there has taken place iE fac