The Washington herald., 1920-12-18
Bache Outlines Proposal
To Tighten Tax Load
Of Country.
WANTS GRADUATED
RATE OF INTEREST
FavOrs Sales Tax and Ii.
cense of Business, He
Tells Committee.

tons gross debt into hfty-year
bonds to tighten the tax burden was
laid before the House Ways and
Means Committee yesterday by J. S.
Bache, of Jules Bache and Company,
New York bankers.
Bache's proposal would establish
a graduated scale of interest rates,
beginning with per cent for the
first five years, 5is per cent for the
second five years, per cent for the
third five years and "A per cent to
maturity.
He contended the arrangement
would bring all of the war bonds
to par and would permit the rev.
enue program to be reduced to 33.-
500. 100000 annually. included in
which would be provision for retir-
ing per cent Of all outstanding
bonds each year.
Wants Sales Tax.
In connection with his program
for funding the debt, Bache recon-
and the establishment of provisions
for licensing every person doing
business. The sales tax he would
uals doing business agregating &c.
900 per year or more.
The / per cent rate. the witness
contended, should produce more than
$4,000, 600. 900 annually. That was a
a... 6ryUUr h.
gross amount may run much higher.
With the sales tax should be an
excise tax which he estimated would
produce about 100000, 200.
A third levy. which Bache advo-
Gated, was a 5 per cent normal in
come tax, granting exemptions up
to $1,000 per annum and doing
away entirely with the superincome
or surtaxes.
Urges High Tarin.
IA the last Rem OF revenue pro-
dueing provisions, Baehe urged q
high protective tariff, levy which
would produce about S70o, ,o0o, 900 a
year. The combined revenue thus
raised would be about $3.500, ,0O0, 600.
q nd the witness declared it would
be obtained without fuss or furor.
noise or disturbance, and with the
least difficulties resulting in finan-
cisl and industrial circles"
The licensing provision he be-
lieved, would provide the govern
ment with a direct knowledge OF
every person il would have to look
to for taxes. while at the same time
the psychological effect would be 10
cause most taxpayers to turn over
their assessment without extra
work from the government.
Says Collection Easy.
He believed the task of collection
would be immeasurably easier un-
der the system he proposed than
under present revenue laws.
Bache was strongly opposed to
the higher brackets of income
taxes He charged them with hav-
ing driven every rich man who
could do it to invest in tax exempt
bonds of municipalities, counties,
States and other political subdivi-
sions. He said he was getting out
of business and putting all of the
money can turn that way into
just that sort of bondSs
The committee also heard an ap-
the American Chamber of Commerce
OF China, who asked that all cor
poration taxes = as they apply to
American corporations doing busi-
ness solely in foreign countries
be repealed. He declared that only
by this method could the Americans
doing business in China be put on
an equal footing with corporations
owned by the British, French and
Italians and others in the same ter
ritory.
Reserve Prevented.
Corporation taxes applied to these
firms, Arnold said, meant that they
were prevented from laying by a
reserve fund to carry them over the
periods of frequent business depres-
sions in China, whereas the other
foreign corporations were able to
meet this drain without difficulty.
]. ]. Klein. of New York. a tax
expert and economist. was before
the committee with a series of rec
concentrations for changes in the
tax laws, in which he urged that
Congress seek an amendment to the
Constitution eliminating the tax
exempt features Of State and mu-
nicipal and other bonds which the
Federal government has been un-
able to tax.
He proposed that a simple return
be required from every person over
81 years of age, whatever his in
come. which could settle disputed
tax assessments.