The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-09

I 0Oo,U0O yield from excess pronts taxes
for the fiscal year of 1920, the pres
ent fiscal year, ending with next June,
is not counted upon to show more than
81 go, 100000 For the new fiscal year
Secretary HoUsToN does not expect
that tax TO yield more than $780,
100000. The income surtaXes of the
/ high brackets he warns us are show
ing similar unproductivity. But of
the total estimated receipts of o,139.-
100000 for this year, exclusive Of pub
I lie debt, the income and profits taxes
are together set down for $780,
100000, or nearly 60 per cent. OF the
estimated $3.50, $4,000 for next year,
So, 625, 000,OOU must come from income
and excess profits taxes or the Treas
ury's finances will fail.
The Secretary does not hesitate to
declare that, because the heavy war
income surtaXes cannot be success
fully collected, as much revenue, per
haps even more, will be gathered by a
reduction of the higher surtax rates.
1t is well to quote in part his own
words:
Tax returns and statistics are
demonstrating what II should re-
o,,ira M s+atistfcal axyidnnra 70 nrove
For the year 1916 net income amount
ing to $ss2,972,sS5 was included in
the returns of taxpayers having net
income of 100000 a year This ag-
gregate fell to s7S1,s72,1 1853 for the
year 1917 and to 1892 ,247,S25 for the
year 1918.
There Is little reason to believe
that the actual income of the richer
taxpayers of the country had fallen
in that interval. 1t is the taxable
income which has been reduced and
almost certainly through investment
! by the richer taxpayers in tax ex-
empt properties Whatever one may
|
propriety of projecting income tax
rates to a point above 70 per cent
when the taxpayers are subject to
State And local taxation, the fact re-
mains that to retain such rates In the
tax law is to cling to a shadow while
relinquishing the substance.
1.-The effective way to tax the rich
is to adopt rates that do not force
investment in tax exempt securities.
The simplest remedy for this situa-
| ton would be a general reduction Of
the high surtaxes accompanied by
Increases in the lower surtax rates
Although also for the repeal OF
the excess profits taxes unequivocally
Secretary Houston does not seem to
us to be on such solid ground MS be-
fore In the new taxes he recommends
to replace the fading profits taxes.
He favors as a compensatory measure
progressive income taxes on corpora
tions. He favors as well heavier
consumption taxes on luXuries, with
modification or adjustment OF some
of such taxes now in operation, Ike
soda fountain drinks, ice cream, &C.
It is interesting to see the methods.
with the estimated new revenues, rec
commended by Secretary Houston.
He would increase the normal income
tax from the 4 per cent. and s per
cent. rates Of the present to per
cent and II per cent, to yield $loo'-
DOC. 600 more than now. He would
have the surtax rates readjusted to
WELD in the lower brackets $230,OOO,-
600 more and the corporation income
tax with an additional 6 per cent,
s465. 900 600. together with $5S.0OO.OO0
more from an adjustment of the
So. 600 exemption. Or he would have
the corporation taxes readjusted 10
fax undistributed profits with new
surtax rates. &C., to yield S69O,OOO,Oo0
more; stamp taxes increased and ex-
tended to yield $134,000,000 more !;
Federal license taxes on use of auto
mobiles. S1O0,O00,O 900 more; cigars, So
100000 more; cigarettes. S70,OOO,OOO
more; tobacco and snuff. $S,00O.OOO
more: gasolene, $9O,0O0.0o0 more; adj
mission to theatres, S70,000,0O0 more !;
motor parts, tires, tubes. equipment
end accessories, $100,000,000 more !;
musical instruments. $13,000,00 more !;
chewing gum and candy. $22.O0O,OOO
more;. toilet soap. &C., $4.00O,OOO
more jewelry and articles of precious
metals, $25.oO0OO0 more; motion pic
ture films, 100000 more; perfumes,
cosmetics and medicinal articles. with
the tax upon the sale by the manu-
facturer. producer or importer, In
place of the existing method, $4,000
600 more.
Secretary HoUsToN, nevertheless,
lille admitting the success of the
continued use of consumption taxes