New-York tribune., 1920-12-18
Big Bond Issue
Urged toCover
All L. S. Debt
]. W. Bache, Banker, Tells
House Committee Refund
of Liabilities Would Aid
in Equalizing Tax Burden
Offers New Revenue Plan
| Per Cent Levy on Sales
Would Net = Billions q
Year; Opposed to Surtax

WASHINGTON, Dec 17.-rlotation
of bond issue into which would be
refunded virtually the entire bonded
Indebtedness Of the American govern
ment was proposed to the Ways and
Means Committee OF the House TODAY
hy Jules W. Bsche, a New York banker.
IS means Of equalizing the burden
Of taxation resulting from the World
War
Bonds Of the new issue proposed
by Mr.. Bsche would run for fifty
years. They would bear scale Of in
terest rates starting at 6 per cent
for the hrst five years, 5ia per cent
the second i've years. per cent the
third period OF five years and a perma-
nent rate OF IA Fer cent year there.
after until maturity. Mr.. Bache de-
clared that such an issue would serve
20 bring Liberty bonds back to par,
while at the same time permitting se-
firemenV OF per cent of thu outstand-
srs Liberty bonds each year.
ne New York banker also submitted d
revenue program which he declared
would easily produce S3,500,0O0,000 an
nually. Included in it was sales tax
OF | per cent, which, he estimated,
would yield S2.ooO,o0O,o0o annually.
Continuation of the excise taxes yield
ing about S500,000,000 q year and the
enactment of q tariff which would pro-
duce SI00,000,000 annually income also
were embraced in the program.
Would Abolish Surtaxes
As regards an income tax Mr.. Bache
recommended the enactment of q fat
normal rate of 8 per cent on all in
comes, with an exemption of $4,000.
Taxes on incomes below $1,000, he de-
elared, were small and did not come
from persons from wnom the govern
ment should seek revenue. He declared
that the superincome or surtaxes had
vest ali their money in tax exempt
securities and in causing every cross
roaGs town in the country to issue a
lot of securities that some day will
cause a lot of grief"
In discussing the sales tax the wit
ness declared that probably after the
first yeau only one-half of one per
cent would be required. The sales tax,
he said, would bring in more money
and with less disturbance to banking
and business than any other tax that
could be levied. He advocated, how
ever, that q Federal licensing system
be created in connection with it, re-
quiring every person or firm doin. a
business OF $4,000 a year or more to
DE licensed. This would provide q
system of checking up on all persons
supposed to be paying taxes, Mr. Bache
declared, as well as supplying the gov
eminent with other information rela-
tivs to its own resources.
Abolish Tax in China, He Urges
The Ways and Means Committee also
heard testimony to-day from H. H.
Arnold, of Shanghai, president Of the
American Chamber of Commerce Of
China, who advocated the removal of
the application of excess profits and
other taxes to American corporations
doing business solely in China. Appli-
cation of the taxes, lie said, worked to
the benefit Of competing foreign firms,
who were not taxed by their govern
ments.
In connection with consideration Of
tax revision by the Ways and Means
Committee one Of its members, Repre-
sentative Treadway, Republican, Massa-
chusetts, introduced in the House bill
which would provide for tax of one
fourth of l per cent on all bank de-
posts except savings accounts. He
estimated that the tax would produce
$500 oO0oOo annually and his bill
would have the tax collected by the
banks at the time Of deposit.
J. J. Klein, New York public &C.
countant, urged the creation of region