New-York tribune., 1920-12-22
I,nAdvOcates
Flat Tax Rate
On Net Profits
Banker Would Limit Sur
taxes 10 Not More Than
80 Per Cent: Holds Ex-
emption Idea Is Vicious
Would RefundW ar Bonds
Normal Flow Of Capital Is
Declared Essential 10
the Revival Of Commerce

-~,- ~. T-tbane's Washington Bureau
vASHINGTON, Dec. 21.-Otto H.
robn international banker, laid before
,be House Ways and Means Committee
to-day plan for revision of the reve-
rne law. Il includes flat tax OF IS
,er cent on the net profits of sll COR
,orst;ons as a substitute fer the excess
rrofits tax, reduction Of surtaXes Ito
reasonable level" imposition of
sales tax and the increasing of revenue
from the tariff.
Refundng OF the floating public debt
vas opposed by MIR. Kahn. He advo
Gated the funding of all Victory and
Liberty bonds outstanding against the
Government. New bonds issued to
take their place should bear high
rate of interest, but should not be ex-
empted from taxation, he said.
"The first essential of normal fow
Of commerce is a normal flow of CAPT
tal." said Mr.. Kahn. This capital
must be accumulated and supplied
either by private enterprises or by the
state Taxes must be paid in cash.
and cash is the life blood OF business
"If the government approprlates too
large part Of the business mems cash
either two things will happen. There
will be d restriction Of the normal cx-
pansion OF business enterprises or
debts viii be incurred to an undue ex-
tent. Tie result Of our present taxes
mas been an intoierable strain and
debts have been incurred to an undue
extent.
Taxation Blamed for Turmoil
ut has not been financial dehation
Nhicn has brought about the present
surmcll due to greatly reduced prices
Of NAM OF our commodities, including
agricultural products. Our taxation
Gas been one of the most potent fac
tors, NJ Q must retrace our steps back
and reestablsh q saner, farer system
of taxation and one that is more simple.
"Ihe excess profits taxes must go. |
AN sorry to say that, because in theory
the tax Is d good one. The best brains
there are, however, have been unab e
to work out a system which will apply
the tax evenly and without undue hard
ship. Inc necessary disadvantages ac-
companying It outweigh and overbal-
ance the advantages"
Surfaces should be continued as a
social and economic necessity. said Mr..
A~hn, mo then referred to tne English
'yStem OF taxation, which ranges from
20 per cent on the lowest taxable in
eoEnes 20 60 per cent in the higness
brackets. Our taxes tagged trUm 4
per cent 10 73 per cent" he laid. "The
greater variation and spread in our
.aw is much wiser and better than TIE
english system" said Mr.. Kahn, "but
me best way would be between the
.yo."
The very heavy taxation or large in
comes, declared Mr.. Kahn. had resulted
N reduction IN single wear of
gl65.o0o.0oo in the amount of mortcaes
.norey available in New York for real
state
II an against all income tax exemp-
lons. said he. 81 think exemptions
re an economically vic Gus principle. -"
Air Kahn was asked his opinion of
sse tax on bank deposits proposed in
the 7teadway bill.
a tax of that nature would be al
,lost calamitous," the banker replied.
he tax Wou4c be imposed on rams
action ~ which there is no element
ii prcht and the business man could
not stand such tax 1t would make
Us practically 90 back to the days Of
-arter. Such { tax, however small,
could be throwing a monkey wrench
INTO the financial system of the coun-
tiy, and | do not mean the financial
structure Of Wal Street, but OF the
whole courtry, involving the small
telmer and merchant
A fla tax on corporations is the
BEST substitute for the excess profits
taxes, N my opinion. lnsteAd Of the
iV per cen. tax now In effect increase
ms f'a' tax on all corporatlons 70 Is
per cent on net profts Corporations
could we'll afford to pay this increase
-or tho blessing Of getting rid Of the
excess r~ofl,s tax"
STAMP taxes such a. taxes on checks
OF one two and lhree cents. and other
minor taxes could BE- expected 10 WELD
s-10oco COO Mr.. Kahn told the com
.n.ttee
Ar. Kahn also touched upon tariff
revision. He declared that ",qithout
making : high protective measure
we could Increase the revenue from
ne ne tam law by s250.000, 900 to $780,