The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-12-14

/ speak oni, for myself-that It would be
wise for Congress 10 refund those Gov
ernment obligations falling due, and re-
duce taxation to a point where our reve-
nue. will meet Government running ex-
TShses l do not believe we can collect
from the people sufficient money TO meet
our ordinary running expenses and ma
terially reduce the Government obliga-
lions in that length Of time.
Mr.. Fordney was asked by Represent
alive SABBATH tIlL) whether any revenue
revision would be passed at the present
session.
"Oh. no. he replied There is
stumbling block on Pennsylvania ave-
nue."
DR.. Adams in his testimony strongly
urged that revenue be kept sufficient to
pay off the Government floating indebt-
edness of more than SO 600. 000. 900 within,
the next three years. To do this. he was
certain $4,000 900. 900 annually In taxes
would be needed.
THE Secretary Of the Treasury, In his
report to Congress" said DR.. Adams,
expected the present revenue, with strict
economy and good luck, would pay of
the floating debt. 1t follows that IL you
are to repeal. modify or reduce any of
the present taxes, other sources of tax
able revenue must be found. 1t is my
! personal view that the Secretary was
courageously sound in his view that we
must prepare to pay off our floatins
debt
Excess Profit Yield DwindIing.
In outlining his objections to the ex-
cess profits tax. DIR. Adams said IL fast
was reaching the point where It's yield
would be reduced greatly.
I "TJnleaa the administrative burden or
the excess profits Is reduced. the admins
Istrative machinery will break down." he
said in citing another objection.
The loss in revenue through repeal OF
the excess profits taxes, the reduction of
surtaxes and the repeal of petty con-
sumption taxes, he said, would be about
! s7s0, 100000
Citing his objectiCcs to n sales tax,
DR.. Adams pointed out that it would
| involve extending present administrative
| machinery to every small merchant and
the millions of people with whom the
| Government does not have to deal at
present. His substitute, the tax on I'M
| distributed profits Of corporations would
| mean no addition to the administrative
machinery. he said. He pointed out that
such a tax of 90 per cent. would be
| equivalent to about per cent. on the
whole income of corporations.
After stating that any revision of the
revenue laws must be preceded by
decision as to whether a progressive in
come tax is to be preserved, Dr. Adams
said that If the income tax is to live
the rates must be made reasonable.
moderate and bearable."
1.-THE consequence Of that decision is
unacceptable" he said. LAS a friend of
the income tax, ! say We must red uce
ii or II is going to go. | have always
| been resolutely opposed to the high rates
| which are certain to break the back of
the income and surtaxes."
DR.. Adams then declared the present
rates on high incomes are ''merciless"
, He pointed out that under present laws
men with incomes over 100000 Year
are forced to pay surfaces as high as 65
per cent. and with an added normal
| income tax of s per cent, in all 10 per
| cent. He then reviewed the Treasury
| investigation to show how these men
were investing greater sums each year
! in tax free securities. One method sug-
gested by the Treasury. he said, was to
permit a lower rate Of taxation on the
| saved or reinvested income" of such
| persopS~ For instance, he said, II a
man had an income Of 100000 year
| and invested 5000. 900 of that In property
which would be taxable in 1.-The future
| the rate of taxation might be 20 per
cent. on the reinvested income plus the
| per cent. normal tax, or total OF rs
per cent.
Representative Green (Iowa) sug-
gested constitutional amendment to
! tax municipal securities DR.. Adams
opposed this on the ground that the
amendment could not be made retroac-
tive and that the Government still would
be unable to collect taxes on these securi-
ties during the several years which
probably would be required to obtain the
adoption of such an amendment He
estimated that there were now $4,000
00O,0 900 invested in municipal tax free
securities. and that the Treasury was
losing $1,500,000 annually in these tax
| exemptions.