South Bend news-times. (South Bend, Ind.) 1913-1938, 1920-04-07

sible this oppressive and discrimins-
tory taxation, with the result that
high prices continue and the cost
Of living Is burdensome. Addition
ally, these ruinous sur-taXes are
driving capital 20 investments IN
municipal bonds and other tax ex-
empt securities. with the result that
great fortunes and incomes are es-
Gaping taxation altogether. whereas
more patriotic people who buy Lib
erty bonds. certificates Of indebted
ness and other taxed securities. are
paying these heavy surfaces. How
ever. such persons also viii strive
20 evade this taxation. If the rates
are not reduced. by seeking invest
ments In the tax exempt securities.
Capital thus diverted is not avail
able for Industry or trade while
locked up in tax exempt securities,
and financial requirements must be
obtained by borrowings from banks,
which in turn causes credit eXpan-
sion. III the rates OF surtax were
considerably reduced. people would
accept them. and conditions nearer
normal would return sooner than
they possibly can while the existing
law remains in effect. When the
percent Of tax on a 100000 income
is 53.73fc or more than half Of
the total income. as IT is under the
present law, initiative is killed. idle
ness encouraged. and trade discrim-
mated against. For the reasons
previously stated, IL will be abso-
lutely necessary TO reduce surtaxes
IL excess profits taxes are reduced /
80. IL
ness as individuals or under part
nerships Will be Disseminated |
Are Serious Loss.
lone Of the most serious causes |
OF the unhealthy expansion in bank /
loans is the undigested government |
bonds and certificates of indebted |
ness carried in the banks. which |
cannot be marketed without a seri- !
Gus loss. and consequently they are |
calling on the federal reserve sys-
tom for support. II some means |
can be devised by which the mar |
ket price for these bonds will be /
improved, the people viii take them |
out Of the banks and thereby relieve /
the strain on the credit situation
Realizing the danger of tax ex-
Of Liberty bonds diverting |
investments and reducing internal |
revenue, IL might nevertheless be !
possible 10 make some tax exemp- |
lions that would prevent these OBJ |
jectiOns from becoming too serious, |
If, for example. the policy OF rails
ing revenue by consumption taxes
were relied on for a large part Of |
the internal revenue. OF course, |
any exemptions would increase in !
vestments in these bonds improve /
the market price, and help the credit (
Taxes on Homes.
The acute shortage OF homes I
throughout the country is most seri- |
Gus. and 1 understand financial in /
stitutions which have heretofore |
bought mortgages are now favoring |
tax exempt bonds instead, because |
OF the interest oil mortgages being |
subject 20 income tax. Nothing IS /
more conducive TO the welfare OF /
the nation than the ownership OF I
homes. and men should be encour- /
aged 10 build homes rather than be I
penalzed. 1t seems. therefore, that /
congress might make income from /
mortgages on homes up to a limited /
cost. say $4,000. exempt from fed
eral taxes II all the states Of the /
union would do likewise. and oddi- |
tionalIy remove property taxation /
from hO0es il would do much 10 /
encourage the building of homes by !
the people and help solve the hOus- |
ing shortage which is so disturbing |
at this time.
THE adoption Of a consumption |
tax on sales, of G small percentage, |
and possibly a graduated scale and /
some exemptions of certain necCssi- !
ties. would be scientifically sound |
and ta.se d II emendous amount of 4
revenue. Income taxes should. of /
course. lie continued and relied upon !
To- raise at least half of the total |
revenue. There are other means, no |
doubt. which congress can conceive ]
10 meet the situation if necessary. /
We could not we'll have a more un- |
scientific and oppressive system of |
taxation than the present law. and |