Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-03-18
FEDERAL TAXATION CAUSE OF
HIGH COST OF LIVING,
He SAYS.
EXCESS PROFITS TAX
AMONG CHIEF CAUSES
Effort to Evads Payment OF Huge
Taxes to 0overnun emit Produces
Waste and Extravaganes-chies9o
Banker Gives Thoughtful Talk Be-
fore Searehlisht and Marshall Clubs

\ That the federal system OF taxation
that grew out OF the war, and espe-
ciaily the excess profits tax. has had
much 10 do with waste and extra
vagance and the resulting high cost
of living Is the belief Of II. H. Mer-
rick, president Of the Great Lakes
Trust Company. who spoke before
a Joint meeting OF the Searchlisht
i and Marshalltown Clubs at the PHI
grim Hotel Wednesday night. Hand
icapped by the very short time In
which he could develop his subject,
because of the late hour at which the
meal was served and his having TO
catch an early train, Mr.. Merrick
I cid not have time TO go exhaustiVe,y
into the question.
He spoke on the general and lars.
I subject of Problems of the Day.
but devoted most OF the three quart
ers OF an hour to discussing taxa
ton. Mr.. Merrick is not an orator
but he proved a very interesting and
convincing speaker.
Effect Of Federal Taxation.
Mr.. Merrick said that the excess
profits tax was direct invitation
for men in business to evade pay
ment by squandering money, extrav-
| agantly in the conduct OF their bust
nssses-and Tire buying public pays
the bin in the increased price OF
commodities.
Two concise examples Of extrnva-
gance 20 Illustrate the point %ere
told by the speaker. They were cases
that came under his personal OBJ
servation in Chicago.
One was that of a medium sized
manufacturer OF Chicago, who came
to Mr.. Merrick with his federal in
come tax report Of his business just
before fling 1t.
Put Profit in Trucks. -.
In the report Mr.. Merrick noticed
an item of some $4,000 dollars
shown as a reinvestment in the bust
ness. Mr.. Merrick thought the item
very large and inquired regarding
1t.
was that during August and Sep
TENDER Of last year he knew that his
profits would be large. and that his
excess profits tax would be very
heavy. To avoid paying such q
large sum he purchased six expen'
sive trucks. He had no use for then
in the business. They were. boush
without tires. were taken to th'
factory and were lacked up and left
never having been used. Other sim
liar and extravagant disposition was
made of more money from the pro.
fits to cut the excess down before
the report was made.
What's the Use.
Another case: This time Of man.
ufacturer who had started in business
seven years before and bad built ur
a small but very successful concern
He had limited himself. up to last
year to $4,000 for his personal Twins
expense out Of the business. Yet
when he showed Mr.. Merrick his re-
port he had last year increased hif
living expenses from $500 to- $40, 900
The principal items in the in
crease were for a very expensive flat
and automobiles. But the manufac-
turer had figured that II the govern
ment was going to take most of his
excess profits in taxes he might az
well spend the money extravagantly
and get out Of 1t what he could.
Everywhere" the speaker said
business men were heard remarking
70 hell what's the use Of earning
more money by sticking close to
business when the more one earns
the more the government takes
from him In taxes.
This was the principal explanation
Mr.. Merrick said, why California and
Florida winter resorts are crowded
to overflow with business mer
spending their winter doing nothing
Misdireeted Remedies.
And for this extravaganza at the
source of production the buying
public pays. and will continue to pay
until a sane and equitable method OF
federal taxation is provided, he said
The attempted remedy Of stopping
buying is not only not q remedy but
it is uneconomic and not American
he added.
illinois women" he said. banded
together to stop buying eggs. The,
= quit buying for one week and tina
week four South Water street firms
dealing in eggs failed.
Z 1.-THE newt Week the. s:!.. Sv;..n::
milk and several Illinois milk pro
ducing concerns went out OF bust.
( ness" -.. 80. ..
Higher Wages No Cure. ..
The solution Of the problem o
high costs lies neither with tn,
I democratic nor the republican par
ties. he said. He declared the issu'
to be q primary one.
"One, and an important reason
why it has not been solved, 10 be
cause senators and representative
have so long been absent from thei
I homes while attending the long ses
! sions Of congress that they are on
Of touch with the people," he declsr
ed.
J "They do not know what tn
I people want, and the public IL sittint
\ quietly by saying little and maxim
I no protest. It was time" he thought
that the public should be aroused.
Lack Of production was anothe
: cause, he said. yet In the face o
this fact up to within sixty days az
| the iaboring man had all but con
WINGED the nation that the cure Is I
! keep raising wages to catch up wit
rising costs. There Is the sam