The Washington times., 1920-12-08

that part OF income saved and re-
invested in property or business
yielding taxable income. Houston
suggests the higher rates might be
left upon incomes "spept or wasted
In taN-free bonds.
But by adopting this partial abnte-
m~nt Of an evil applying solely to the
wealthy, the Secretary said an pre-
MUM would be placed upon saving
and IL penalty upon spending, aud
legitimate check put npOn Investment
In non-taxableN-
3-"Consumption' taxes ara recon-
mended to reach a class Of surplus In
come of taxable capacity" but from
which the Government derives no
revenue. This proposal is designed 10
cover, the Secretary said, luxurious
and wasteful consumption among
those persons who do not ordinarily
pay income tax"
REPEAL "SODA- REVENUE.
Repeal of taxes upon fountain
articles Of food and drink" imposed
by present revenue lawn, Is recon-
mended. and Congress lis urgrd to
substitute heavier taxes upon certain
other luxaries. Regarding new ex-
else and luxury taxes, the Secretary
saidi
at is not necessary TO tax every
luxury. II is desirable to avoid alb
solute necessaries of life. because
some individuals have little or no
waste income to be tapped either di-
rectly or indirectly"
Present iuxuary taxes are poorly de-
fined and uncertain and difficult OF
collection, the Secretary said.
at would in my opinion be neither
wise nor cxpedicnt TO increase
radically the volume of consumption
taxation. During the fiscal year just
ended taxes on transportation and III
surances, beverages, tobacco products,
admissions and other consumption
taxes yielded 81 ,150, 100000. or 81 per
cent of the total internal revenues.
This amount could be moderately in
creased to 20 or 50 per cent Of the
total.
TAP WASHERS, BANK ROLL.
"What should be sought are a few
consumption taxes which tap the sur
plus income which is being wasted,
not a conglomerate multiplication of
petty taxes upon every article of lux
urious or unnecessary consumption
which can be neither clearly defined,
cheaply collected, nor administered
without widespread evasion"
The new luxury" tax yields, to-
Eether with other sources for new
revenue. totalling 81 000,0oe. were
estimated by Secretary Houston as
follows:
Normal income tax. by increase of
the 1 and per cent rates TO and IL
per cent S15O,9iO.O0O.
Readjusted surtax rates $3.50, 900, 900.
Corporation income tax. bearing an
additional 6 per cent Sl65 100000
Corporation undistributed profits
tax $500, O00, 600
stamp taxes at higher rates $751;
cOO,OOO.
Federal license tax on use OF auto
mobiles, at q tax rate of 30 cents per
horsepower. 100000 900.
RAISE CIGARETTE TAX.
Cigars. at rate of % cents per
200 additional $5,OOO,00o.
Cigarettes. increase Of 81 per thou
sand S7O,OOO,OOO.
Tobacco and SNUFF at q cents a
round additional SS.000,OoO
Gasoline cents a gallon, 500
OOO 900.
Thcatcr admissions. 10 per cent adj
ditional, so, 600 900.
Automobiles and accessories at ,
per cent additional sales rates $780,
OOO 900.
Musical Instruments, ; per cont
rate increase, $4,000, 900.
Chewing gum, : per cent additional
100000
Candy, per cent additional. SEQ
100000.
Toilet soaps and powders. per
cent additional, 100000.
JcwClry and precious stones, per
cent additional. S25, 900. 900.
Motion picture 1lms, per cent ad-
ditional, 100000.
Perfumes, cosmetics and medicinal
articles, 10 per cent Increase tax
upon sale by manufacturer. producer
or importer, ,1G,O00,0OO
PRESSING NEED or REVISION.
Secretary Houston told Congress
that unless amendments to the tax
laws are enacted in the early months
Of 1891, they cannot without great
con fusion 10 made to apply to in
comes foe the calendar year 1921.
There Is pressing need Tor cXpe.
di'ior by Congress" he said Th,
business interests havc % riLh' TO
know w n,~nuCr tho rate OF taxation
tho, will bc called upon 10 nay. Tho
purchaser aud consumer haze an
equally vital interest in the early ia.
termination n tho tax burden"