Bisbee daily review., 1920-12-22
]. 5. BUSINESS BEING WRECKED
 BY H|GH TAXES.
 CHARGES KAHN
Revenue Burden Has Already Stopped Commercial De
 velopment, Says Banker
URGES NEW SALES TAX
Financial Authority Claims Consumer Is Bearing the
 Brunt of Taxation

WASHINGTON. Dec. 21.-Establish- ment of a sales tax, repeal of the tax on excess profits. reduction of the higher rates on income surtaXes. up- ward revision of the tariff and the levying of a flat tax op net profits of corporations, were advocated before the house ways and means commit tee today by Otto H. Kan. New York banker. in a comprehensive discussion of tax revision legislation.
 Kahn, one of the few witnesses in yited by the committee to appear be fore it. dwelt at length on the lues- tion Of sales tax, partly in response to indications in the committee that this sort of tax is gaining in favor. Chairman Fordney, before Kahn was called, said he and several other mem- bers believed some sort of sales tax would eventuate, but were seeking methods by which the tax would not be multiplied and the consumer un- justly taxed in the final purcnase.
 As a result of the chairman's state ment Kahn discussed that phase of the problem. advocating legislative provisions which would require the tax to be made known in each sale and added to the selling price as sepa- rate item. Such an arrangement, he said. in his opinion. would check the profiteering which has resulted from the excess profits tax.
 Discusses Situation
 Tn his discussion of the need for revised taxation program, Kahn de- elared that American business could not experience a healthy growth if the government continued lon road or excessive taxation and continued to absorb the life blOod of business through concentration of tayes on ili- comes and capital" He added that the "tax burden already had actually stopned commercial develonment.
 What has happened in the past he continued. "can reasonably he eN- nected to happen again in the future. We have seen the end of this tax and uiap and have seen it's disastrous re- suits. It has forced every business house to run to banks for credit to conduct business, but finally the banks ran out and the federal reserve board had to call halt.
 After this came the collapse in markets which hit the farmers flrst, but none have been spared and all business has felt the effects. The re- taller has not been struck to the eX- tent that l fear he will. He can see from that what will happen unless the principle is changed.
 One of the means suggested by Kahn for lifting the present tax bur den was funding of the Victory notes and war savings securities. He urged payment out of taxes Of the treasury certificates of indebtedness. however. saying it appeared this. could be done without inconvenience before they fall due.
 Discussing the sales tax, Kahn said he had "wavered and wobbled' on, the proposition for some months. not feel ing sure that he had a right to sug- gest it's use.
 'I think a man ought to lean back wards" the witness continued, when he proposes an arrangement by which he win benefit, as I will benefit Dy the sales tax. Nevertheless. l believe sincerely that the consumers Ill the final analysis will not suffer the bur den under a sales tax that they now suffer under the excess profits tax
 Consumer Paying All
 Every manufacturer and every business man has added more to the prices of his commodities in anticipa- tion of the profits tax than he has had a right to add. It has started at the very beginning of the life of manu- factured article and continued on through to the ertailer. The con sumer paid it all. I submit the sales tax would be lighter burdr. at least
 The witness said he was not pre- pared to say sales tax would be success. He said, however, at that, he believed it would work success fully but because it was in the nature of an experiment he would propose a low tax rate for the initial test He suggested a rate of One-third or one per cent. estimating that such levy would produce approximately $65O,- coo 900 year. This yield, Kahn said, was based on the assumption that conditions would be normal when the tax would become effective.
 Kahn also proDosed tax of 10 per cent on net profits of cornorations. tax would be a lighter burden at least would produce at least $1,000.0O.OO0.
 The tariff revision which he pro posed. the witness said, ought to add oCONTINusD ON PAGE TWO