The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-22
KAHN FOR SALES AND.
CORPORATION TAXES
Banker Urges Congress to Re-
peal Excess Profits Law
and Lower SurtaX.

WASHINGTON. Dec. 2l.-Estab'ish-
ment of sales tax repeal of the tax
on excess profits. reduction of the higher
rates on income surtaxes. upward re-
vision Of the tariff and the levying of a
fiat tax on net profits OF corporations
were advocated before the House Ways
and Means Committee to-day by Otto
II. Kahn. New York banker, in COM
p-ehensive discussion of tax revision
legislation.
Mr.. Kahn dwelt at length on the ques-
ton of a sales tax, partly in response to
ind cations In the committee that this
sort of tax was gaining in favor. Chair
man Fordney before Mr.. Kahn was
called, said he and several other mem
hers believed some sort of sales tax
would eventuate, but We're seeking
methods by which the tax would not be
multiplied and the consumer unjustly
taxed In the final purchase.
Mr. Kahn advocated legislative pro-
Wis ons which would require the sales
tax TO be made known in each sale and
added to the selling price as separate
item. Such an arrangement. he said.
would check 1.-The profiteering which
has resulted" from the excess profits
tax.
In his discussion OF the need for a
rev sed taxation programme Mr.. Kahn
declared that American business could
not experience a healthy growth II the
Government continued to absorb the
life blood OF business through concentra-
ton OF taxes on incomes and capital"
He added that "the tax burden had al
ready actually stopped commercial de-
haa l.
ness house to run to banks for credit
TO conduct business he said, but
finally the banks ran out and the Fed
eral Reserve Board had to call halt.
After this came the collapse in markets.
1t hit the farmers first but none has
been spared and all business has felt
| the effects. The retailer has not been
| struck to the extent that fear he Will.
You can see from that what will happen
unless the principle is changed"
| One of the means suggested By Mr..
Kahn for lifting the present tax burden
was funding of the Victory notes and
| War Savings securities. He urged pay
ment out of taxes of the Treasury GER
tificates of Indebtedness, however. say
ing it appeared this could be done with
out inconvenience before they fell due.
Discussing the sales tax Mr. Kahn
safd:
Every manufacturer and every bust
ness man has added more to the prices
! of his commodities in anticipation of
! the profits tax than he has had right
! to add. 1t has started at the very be-
| ginning OF the life OF manufactured
| article and continued on through to the
retailer. The consumer paid II all.
submit the sales tax would be lighter
! burden. at least"
The witness proposed a low tax rate for
! The initial test. He suggested one-third
| of per cent. estimating that such q
levy would produce approximately $3.50,
100000 year. effective in 1922,
| Mr.. Kahn also proposed Ii tax of Il
! per cent on net profits of corporations,
a tax which he said he was confident
would yield al least $1,000. o0,o0o.
! Under the revised income sIrtaX
I schedule proposed Mr. Kahn estimated
/ the Government would derive between
| $3.50, 900 600 and $1,000. 900, 0o1A Questioned
as TO rates for the reduced surtax, Mr..
Kahn said that present rates were driv-
ing rich investors to place their money
| in tax exempt securities. most of which
! he declared We're sold on a basis to
| yield 51a per cent. 1t was therefore his
belief. he said, that by fixing the sur
! tax charge at or near 90 1-3 per cent.
as n maximum the Treasury would re-
ceive as great yield. II not greater.