Arizona republican., 1920-12-09
Houston Suggests More Equitable Distribution
 Countrys Tax Burden

Continued from Page One) Of perfumes, cosmetics and medicinalI articles in lieu of the present tax on the consumer, to yield S1O,O0O,0OO.
 An additional per cent tax on jew elry and precious metals to yield s25, COG, 900.
 An additional tax of per cent on musical instruments to yield $13,00O,- 0O0
 An additional tax of , per cent on motion picture films to yield s4,0o0,O
 Readjustment of Surfaces
 In the readjustment of surtaXes MT. Houston proposes the division of in comes into saved" or reinvested, and spent" On the former class he would limit the highest tax to 20 per cent while the income spent would be sub- jected to a tax ranging as high as 90 per cent. Under the plan proposed by the secretary, incomes between 5000 and $60O0 would be taxed 2 per cent on the part saved and the same on the part spent The same ratio with a graduated increase would apply to in- comes up to 0o0o, where the maxi mum of 20 per cent pn saved income Is reached From $30,000 to $40,000, the rates would be 20 per cent on saved and 20 per cent on spent; 900 to S5o,00O, 20 per cent and 30 per cent; $5O.00O to $75,0O0 20 per cent and 35 per cent; $75,O00 to S10O,O00, 20 per cent and 70 per cent, and over S10o, 900, 20 per cent and 50 per cent or a total tax of 70 per cent.
 The present maximum rate is TO per cent on incomes of s1,o00,Oo0, but MT. Houston declares it has Tong, passed the paint of its minimum productivity" sInce it encourages the investment in tax-exempt securities. He says the "only effective way to tax the rich is to adopt rates that do not force invest ment in tax-exempt securities"
 The new rates, while not laying as high a levy against the great incomes will, the secretary expects, produce a greater return to the government since the wealthy class will not find 1t prof itable to invest in bonds of states, countries or municipalities which are tax-exempt, but pay a lower rate of interest.
 New Consumption Taxes
 These possible sources of income are mentiopad for the information of congress-" Mir. Houston says. While shall not attempt to discuss them. attention should be called to the new and additional consumption taxes. Reasons have been given for the belief that no valid objection exists to the employment of a moderate number of consumption taxes properly selected, but it would. in my opinion, be neither wise nor expedient to increase radical ly the volume of consumption taxes. |" The articles included in the suggested list Of additional consump- tion taxes have not been selected be- cause their use is particularly harm ful or in any sense less legitimate than those not included. Consumption taxes must be judged by practical standards. What should be sought are a few con sumption taxes which tap the surplus income which is being wasted, not a conglomerate multiplication of petty taxes upon every article of luxurious or unnecessary consumption which can neither be clearly defined, cheaply col lected nor administered without wide spread evasion
 Repeal Soda Tax
 The repeal of the tax on soda foun- tain and other beverages is asked, the secretary says, because the collection of the tax, the aggregate of which is small. has presented an administrative problem of magnitude. Added to that, MT. Houston says, there has been con- stant and widespread evasion of such taxes.
 The excess profits tax, Mir. Houston declares. has not fulfilled the theo- retical grounds upon which it was en- acted and has been found to be wrong both in theory and in political phil osophy. He says it discriminated against the conservatively financed corporation while aiding materially the firms whose capitalization is exagger- ated. He urges that it be replaced by some form of a corporation profits tax. mot only on the grounds of the governments revenue needs, but upon grounds of equality and justice" The corporation profits, the secretary con- tinues, should not be allowed to escape with a tax of 10 per cent while other | tax payers are subjected to taxes or their incomes ranging as high as 7C per cent.
 MT. Houston again urges the neces- sity for rigid economy in government expenditures, asserting that only bS conserving the finances carefully car the expenditures be kept within tho s4, 900, 100000 annually which he sug. gests should be the basis for a revenut lprogram. He is hopeful, however. tha with the heavy burdens placed by th' transportation act" out of the way