Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-12-09
MONEY HEAD
Continued from PAGE Onel

And the country should face the fact
that present taxes even may not in
the future be relied upon to yield the
needed revenue
He said the excess profits tax should
be repealed and must, of course. he re.
placed. He said he believed it should
be replaced "in large part by some
form of corporation profits tax"
Reduction of the higher groups of
the income surfaces accompanied by
increases in the lower income sur-tax
rates also was suggested by the sec
rotary, who asked Congress to con-
slder such general revision, with a
reduction to maximum rate lower than
that contained in the present law. pro-
vided acceptable new taxes of equal
yield can be found
The secretary said the plain fact
was that the present rates. which are
as high as 20 per cent. could not be
successfully collected and that the eff
fective way to tax the rich is to adopt
rates that do not force investment in
tax-exempt securities.
Mr.. Houston suggested a number Of
sources Of revenues which could bo
tapped and others which could be re-
vised to make up for the loss Of rev.
enue occasioned by the changes in the
taxes which he recommended. These
sources were outlined as follows:
A tax of 20 per cent. on corpora ton
profits. distributed or undistributed. in
addition to application of a higher
sur-tax rate to yield $500. 900, 900.
An additional tax of per cent. on
corporation incomes to yield s4s5. ooo..
600.
REIMBURSEMENT Of sur-tax rates on in
comes to yield an additional $3.50, 0oo,-
000
Adjustment of the $4,000 exemption
allowed corporations on income to yield
s5S,000.
An increase from the present 4 per
cent. to six per cent. is the tax on in
comes of $4,000 or less and from per
cent. to IL per cent. in the tax on In
comes between $1,000 and $1,000 the
whole estimated to yield S150,940,0 900
annually. ~
A tax Of two cents a.gailon on gaso-
line for motor cars and oil other pur-
poses. to yield s9o.o0o.000.
A federal license tax Of 80 cents per
horsepower on the use Of motor cars
to yield s10o,00o.000.
An additional sales tax on nutomo-
biles, motorcycles and motor car &C
cessories to yield s100.o0o.ooo
A ten per cent. additional tax on
theatrical admissions to yield &c.,
100000. -.
An additional tax of 81 per thou
sand on cigarettes to yield $4,000, 900.
An additional tax Of % cents per
thousand on cigars to yield $4,000, 900.
An additional tax Of cents per
pound on tobacco and snuff to yield
100000
An additional tax of per cent. on
candy to yield $20,00000o.
An additional tax of per cent. on
chewing gum to yield s2,000,000.
An additional tax of per cent. on
toilet soap and toilet-soap powders to
yield 100000.
A 10 per cent. tax on the sale by
manufacturers. producers or import
ers of perfumes, cosmetics and medi-
cinal articles in lieu of the present tax
on the consumer to yield SO, 900.
An additional 5 per cent. tax on
jewelry and precious metals to yield
$4,000, 900.
An additional tax Of per cent. on
musical instruments to yield $13,00e.-
900.
An additional tax of per cent on
motion picture films to yield $4,000
600.
Readjustment Of Surfaces
In the readjustment of surtaxes, MIR.
Houston proposes the division of in
comes into saved or reinvested and
spent" On the former class he
would limit the highest tax to 20 per
cent. while the income spent would be
subjected to a tax ranging. as high as
so per cent. Under the plan proposed
by the secretary, incomes between
$4,000 and $4,000 woud be taxed per
cent. on the part saved and the same
on the part spent. The same ratio
with graduated increase would ap-
ply to incomes up to $4,000 where the
maximum of 20 per cent. on saved in
come is reached. From $4,000 to
$4,000, the rates would be 20 per cent.
on saved and IS per cent. on spent:
$4,000 to $4,000. 20 per cent. and 80
per cent, $4,000 to $4,000, 20 per
cent. and IS per cent; $4,000 to
100000, 20 per cent. and 40 per cent.
and over 100000, 20 per cent. and 30
per cent or a total tax of 20 per cent.
The present maximum rate is 20
per cent. on incomes of $1,000, 900, but
Houston declares it has long passed
hn mint nf nc nj Inn. oa,,p tixy-
ity" since it encourages the invest
ment an tax-exempt securities. He
says the "only effective way to tax
the rich Is to adopt rates that do not
force investment in tax-exempt Sc
curities."
The new rates while not laying as
high a levy against the great in
comes will the secretary expects, pro-
duce a greater return to the govern
ment since the wealthy class will not
find it profitable to invest in bonds
of states, countries or municipalities
which are tax-exempt, but pay low
err rate of interest.
These possible sources of income
are mentioned for the information Of
Congress-" Mr.. Houston says. while
! shall not attempt to discuss them,
attention should be called to the new
and additional consumption taxes.
Reasons have been given for the be-
lief that no valid objection exists to
the employment of a moderate num-
Der of consumption taxes properly Sc