Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-12-21
END EXCESS PROFIT
TAX, KAHN ADVISES
Business Demands Revision OF
Financing Laws, Banker Tells
House Committee
SALES LEVY IS FAVORED
by the Associate5 Pres

WhShtuRtOn. l)er. 2l.-BuSlncSS u
the county is demanding and must have
revision Of the tax laws II il is to con-
tinue a healthy growth. Otto II. Kahf.
New York banker. told the House ways
and means committee today in course
Of stat 'ment in which he denounced
economic asnects of the treaty of YER
sail'es and declared for a continuation
Of income surtaHes.
The excess profit tax "must go" Mr..
Kahn said, adding. that while il was
theoret' 'cally sound. its disadvantages
outba!anc"d its advantages.
Continuation Of the income surfaces.
Mr.. Kahn explained. was a social and
economic necessity. but he warned
against excessive levieS on the higher
o tncom" on the ground they did not pro-
duce the maximum of revenue for which
they were designed. He said also he
opposed any exemption under income
tax provisions.
Your problem" Mr.. Kahn con.
tnued, us to find out how to make the
surtaKes economically sound IL l. a
question of finding how and what rates
can be made tO produce the maximum.
But | think there is danger in excess
sive lcvieS in surtaXes and this should
be guarded aga nst.
Committee Fsvors Sales Tax
Before Mr.. Kahn was called. Chair
man Fordney stated that he and other
members Of the committe' were in favor
or some kind OF sales tax as one
OF the means Of raising the four bill
lions Of revenue needed annually BY
the government.
1t seems a sensible tax" said the
chairman, but we do not want a sales
TAX that will be multiplied and pyra
mided into burden on the consumer.
We want to avoid a law which will
cause to be pass d on to the consumer
levy which nets more profits 10 the
merchant than tax to the government"
The chairman added that under some
of the present taxes, merchants were
add ng under the gu'se of taxes much |
more 70 the price of articles than the |
tax levy justified. He contended that
this was one OF the problems which !
Congress must solve in revising rev.
enue laws.
Condemns Treaty Provision
Mr.. Kahn was asked during the
course Of his statement whether he |
thought the signing Of the treaty of |
versailles would oovate any Of the diff. |
fculties, industrial and financial, now |
confronting the country. He replied |
that the Versailles peace was las |
equally devastating as the war in it,
disregard Of econ mic aspects"
Mr.. Kahn blamed "the present fnan
eial turmoil" for the predicament in |
which the farmers find themselves. He |
said their condition was not due 10 |
financial defation because there has
not been financial dehati0n 40 far"
Taxation. according to Mr.. Kahn,
was one Of the factors bringing about
q collapse Of the market He declared |
II was necessary that we retrace our
steps and re establish saner and farer
ny stem OF taxation without any undue
tenderness 70 capital" Declaring that
the rich ARE very canny and will pro
tect themselves always Mr.. Kahn |
said capital should pay its just taxation |
and that system must be worked out |
which would compel those taxes to be |
paid.
Opposes LoTy on Bank Deposits
Asked regarding recent proposals to
tax bank deposits the witness said such !
step would be almost calamitous in
its effect"
1T would practically make us go
back to the days of barter--wOuld be
throwing monkey wrench into the
whole machinery Of finance" said he.
Questioned as TO the statement of W.
G. McAdOo. former secretary Of the
treasury. that delation had been car.
ried too far and that Federal Reserve
banks should be allowed 70 reduce in.
terest rates and member banks pncOur.
aged TO extend more liberal credits, Mr.
Kahn said smilingy that with all due
respect to Mr.. McAdoo and his ability.
i think that statement was made with
an eye TO 1924 rather than To 1921 "