The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-12-27
Secretary of Treasury Houston
Declares Economy Necessary.
Wants Present Revenue Con-
tinued for Two Years.
WOULD CUT THE SURTAxES
Soldier Bonus Possible if Veter-
ans Accept Insurance.
Must Reduce Income Tax or Ex-
pect More EyaSions.

Washington, Dec. 27.-Government
economy. tax simplification and revi-
sion were recommended today by Sec
retary of the Treasury Houston to the
senate finance commission.
Houston made these proposals: Re
duction of extreme surtaxes; substan-
tial reduction of aggregate taxes col
llected from the people; substitute for
excess profits tax; a simpler and more
certain tax upon corporation income
or profits. and a simple system" of
specific sales or consumption tax.
Houston opposed increased surtaxes
and declared a total normal and sur
tax rate of 1914 per cent is the high
est that can be successfully collected.
A higher rate means more evasions
of the law, he added.
Soldier Bonus Costly.
Houston said the soldier bonus
probably would cost $2,S00,0 100000 per
year for two years. However, if all
eligible veterans took advantage of
the insurance provision that alone
would cost $4,5S4,000 per year.
He confessed his inability to suggest
how this money shall be raised If the
bill passes.
"I have given my thought to plans
for meeting existing government costs
rather than revenues to meet new bur-
dens," he said.
Houston estimated the tax revisions
he proposed would yield about ST.
731, 100000 per year.
Rich Avoid Taxes.
Houston recommended that the rev.
enue from taxation be held until 1873
at a level of $4,000. 100000. as COM
pared with tax receipts of S5,400, oOO,-
600 for 1920, and $4,70O.000,000 es-
timated for 1921.
Carpets and rugs brought taxes OF
$2,136. 900 in November, 120. as COM
pared with $1,340,000 in November,
t1s19. Near beer yielded $2.900,000 in
taxes in November, 1920, and S1,7l6,-
| 600 in November. 1919. Admissions
and club dues produced $7,902,O00 in
November, 1920, and $5,S77,000 in the
same month in 1919; Candy taxes
| jumped from S6,322,000 in November
1918, to s7,136,00O in November. 1920
| The reduction of extreme income
surtaxes would not exempt the rich
| but would tax them, he continued
They now avoid taxation by investing
| in tax free securities.
The excess profits tax is losing Its
productivity and promises in the neal
/ futuresto become a statute of exemp-
| tions rather than an effective tax" he
, said. .I recommend that it be re-
| placed with simpler and more GER
tain tax upon corporation incomes OF
profits
He suggested ''either a flat annual
tax on corporation profits such as has
recently been adopted in the United
Kingdom, or a tax upon the undistrib-
1 utable profits of corporations"
Suggests New Taxes.
Advocating a simple system of spe-
cific sales or consumption taxes de-
signed to collect a moderate portion OF
| the aggregate tax levy from a few
| highly productive taxes on non-essen-
| tials, Houston said that miscellaneous
sales taxes supplied about 20 per cent
| of the revenue during the last fisca
year
| This could be increased to 80 or 81
per cent, but no radical increase
such as doubling, would be justified
lie urged fair balance" between
consumption and wealth taxes and
opposed the substitution of sales ta1
for corporation taxes.
Taxes Houston proposed revising
would yield less than s73O,000, 900 pei
year whereas substitutes would yield
| over $4,000, 900, Houston said.