Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-12-23
HIGH INCOME TAX
HITS NEW BUILDING
Investors Driven to Buy Ex-
empted Securities, Says
Senator Calder.

One great cause Of the existing
shortage in dwellings. Senator Calder.
republican of New York. said in adj
dressing the Senate today. is the high
rate Of federal income tax. This. he
declared, was driving wealthy in
vestors to place all their available
funds in tax-exempt securities issued
by municipalities, the states and the
national government, and he sug-
gested that Congress meet the situa.
ton by making mortgages on dwell
ing houses tax exempt to a reasonable
figure. Senator Calder is chairman
Of the Senate committee investigating
housing and he recently filed q pre-.
liminary report with the Senate.
Il am informed that the Marshall
Weld estate in Chicago and the
Hetty Green estate, both Of which
formerly Loaned heavily on real es-
tate, find their incomes from this
source to be less than per cent un-
der taxation" Senator Calder said,
"and they are diverting their capital
funds to more lucrative investments.
Tax-exempt securities during the last
Ave years have increased from $780,
Mortgage Money Restricted.
THE supply Of mortgage money"
said Senator Calder. "is SO restricted
PEELED to rely largely on savings
banks and insurance companies In the
east, and building and loan assocfa.
tons In the west. ! have introduced
a bill exempting from taxation the
income on mortgages when in the
H. de- svS5t xyfA, 11. LAI hot
individual shall own more than
$4,000 worth Of exempt mortgages.
II consider the adoption Of this
measure very necessary unless our
whole revenue system Is changed. the
excess profits tax repealed, and the
exceed 30 per cent Of the income. T.
is. the common belief that these high
taxes are taken entirely from the
rich, and while on the surface Of
things that appears to be SO, in the
end the taxes are passed down to the
grounded opinion that it would be I'M
wise to further extend our tax-ex.
empt field, but the government itself
is responsible for the present building
conditions as well as for the present
tax-exempt securities, and 1t would
tax exemption for mortgages and
thereby obtain sufficient means to re-
vive the housing industry rather than
later, in response to public demand,
adopt a government construction pro-
gram of q socialistic nature which
would mean the expenditure OF sew.
eraI billion dollars from the public
treasury.
when the present revenue laws
are revised not only should the high
rates be lowered, but ! would pro.
vide that further issues OF state and
municipal bonds should at least be
subject to normal income tax rates.
This would check the movement OF
large issues Of bonds. This. am
sure, would be welcomed by those
who are trying to safeguard the In
terests of the different communities
Of the country.
Exemption 10 Urged.
In the committees report we have
recommended legislation providing
for exemption for the next ave years
of the profits on the sale Of new
buildings erected for dwelling pur-
poses. provided these profits are re.
Invested in new buildings.
'"The committee has also urged the
creation Of . home loan banking sys-
tenn in line with our farm lean bank
Under the bill proposed there would
he established In each federal re.
serve district banks to be organized
with 4 capital Of not less than q hun.
dred thousand dollars. stock to be
subscribed for by building and loan
associations In that district. The
purpose Of these banks is to permit
the discounting Of mortgages held
BY building and loan associations"