Smyrna times., 1920-12-29
URGES SALES TAX INSTEAD
OE EXCESS PROFITS LEVY
OTTO III. KAHN TELLS HOUSE
5 COM. BUSINESS is STIFLED
Proposes Upward Revision of Tariff
and Reduction on Big Incomes With
Lighter Burden on Business Men

Lighter Burden on Business Men
Establishment of a sale tax, repeal
of the tax on excess profits, reduction
of the higher rates on income sur
taxes, upward revision of the tariff
and the levying of a fiat tax on net
profits of corporations were advocated
before the House, ways and means
committee last week by Otto H. Kahn,
New York banker, in comprehensive
discussion of tax revision legislation.
Mr.. Kahn, one of the few witnesses
invited by the committee to appear be-
fore it, dwelt at length on the ques-
ton of sales tax, partly in response
to indications in the committee that |
this sort of tax is gaining in favor. |
Chairman Fordney, before MIR. Kahn |
was caIled, said he and several other |
members believed some sort of sales
tax would eventuale but were seeking
methods by which the tax would not
be multiplied and the consumer un-
justly taxed in the final purchase.
Guard Against PrOfiteering
AS a result of the chairman's state
ment Mr.. Kahn discussed that phase
of the problem, advocating legislative
provisions which would require the tax
to be made known in each SAFE and adj
ded to the selling price as a separate.
item. Such an arrangement, he said
N his opinion, would cneck "the prof
iteering which has resulted" from the
excess profits tax,
In his discussion of the need for
revised taxation program, Mr.. Kahn
declared American business could not
experience a healthy growth if the
government travelled con road of ex
cessive taxation and continued to ab-
sorb the life blood of business through
concentration of taxes on incomes and
capital" He added that "the tax bur-
den" had already actually stopped
commercial development.
"What has happened in the past" !"
he continued, "can reasonably be ex-
pected to happen again in the future.
We have seen the end of this tax plan
and have seen it's disastrous results.
1t has forced every business house to
run to banks for credit to conduct
business, but finally the banks ran out
and the Federal Reserve Board had to
call halt.
Retailer to Feel Pressure
"After this came the collapse in
markets. 1t hit the farmers first, but
none have been spared and all bust
ness houses felt effects. The retailer
has not been struck to the extent thai
l fear he will. You can see from tha
i what will happen unless the principle
is changed"
Il One of the means suggested by Nh
v Kahn for lifting the present tax bur
den was funding of the victory note
and war savings securities He urg
ed payment of taxes of the treasur
Il certificates of. Indebtedness, howeve
saying it appeared this could be dor
M without inconvenience before they ia
due.
"Every manufacturer and ever
business man." he said, "has addt
d more to the prices of his commoditi
b in anticipation of the profits tax tn;
q he has had a right to add. 1t h
started at the very beginning of t
life of a manufactured article and co
tinued on through to the retailer. T
consumer paid II all. l submit t
sales tax would be lighter burden
u least"
Low Rate at First
u The witness said he was not prep;
ed to say sales tax would be a 81
cess. He said, however, he belieV
At would work successfully, but
cause it was in the nature of an
pertinent he would propose low
rate for the initial test. He sugge
ed rate of 1-3 of one per cent,
timating that such levy would p
duce approximately $650,000, 900
year. This yield, Mr.. Kahn said, '
based on the assumption conditi
would be normal when the tax wo
become effective in 1922.
Mr.. Kahn also proposed tax
Is per cent on ret profits of corpo
tions, tax which he said he was c
fident would produce at least 81,
1000.
The tariff revision he proposed,
witness said, ought to add appr
mately $350,OOO,0O0 to the inn
revenues now obtained annually n
ing that source yield nearly 81
N 100000.
Under the revised income SUI
schedule proposed, Mr.. Kahn estir