The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1920-12-08
Repeal of Excess Profits Taxes
and Increased on Income Taxes
Part of Plan to Change
Present Methods
SUGGESTS NEW METHODS

SUGGESTS NEW METHODS
Washington, Dec. S.-Immediate re-
vision of the nations tax laws on the
basis of an annual levy of four billions
of dollars for period Of four years
and including an increase of two per
cent in the taxes on incomes up to
$4,000, is urged by Secretary Houston
in his annual report sent today to
Congress. " Il, I'M
Repeal of the excess profits taxes,
elimination Of certain Of the. so-called
luxury taxes, including the levy on
soda fountain and similar beverages,
and a readjustment of the rates inEthe
higher groups of income taxes, is pro-
posed by the Treasury chief. Tolmeet
the losses brought about by thesa pro-
posed changes, Mr.. Houston recon-
mends revised and new taxes to yield
about $2,000000,000 as follows:
A tax of 20 per cent on corporation
profits, distributed or undistributed, in
addition to application Of athigher sur
tax rate to yield $500, ,000,000.< >.
An additional tax Of per cent on
corporation incomes to yield $465 5,O0O,-
900. " 4. -
Readjustment of surtaX rates on in
comes to yield additional $3.50 900 900.
Adjustment of the $4,000 exemption
allowed corporations on income ito
yield $5S,000. - &,
An increase from the present 4 per
cent to six per cent in 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 $4,000 and 100000, the
whole, estimated yield $150,94o 900 an
nually.
A tax of two cents a gallon on gaso-
line for motor cars and all other pur-
poses, to yield $90,000,000.s
A federal license tax of so cents per
horsepower on the use Of motor cars TO
yield $100,000,0O0
An additional sales tax on automo-
biles (other than trucks and Wagoas)
and motorcycles and motor car acces-
sories to yield 100000 900. s.t
A ten per cent additional on theatri-
cal admissions to yield $70,00O,O0O.
An additional tax Of 81 per thousand
on cigarettes to yield $70,000.0OO..
An additional tax of 25 cents per
thousand on cigars ito yield $5,OO0,O0o.
An additional tax of per cent per
pound on tobacco and snuff to yield
$S,0O0,00O. ... .. ~ .
An additional tax of 5 per cent on
candy to yield $20,0O0,O0O. J
An additional tax of Z per cent on
chewing gum to yield $2,000,O0O
An additional tax of Z per cent on
toilet soap and toilet-soap powders to-
yield $4,00O,000.
A 10 per cent tax on the sale by
manufacturers, producers or import
ers of perfumes, cosmetics and medl-
cinal articles in lieu of the present
tax on the consumer to yield $1O,OOO,-
900.
An additional five peycent tax on
jewelry and precious metals to yield
$25,000,000. ,.. '..
An additional tax Of per cent on
musical instruments to yield Sl3,OO0,-
900.
An additional tax of 5 per cent on
motion picture films to yiefu S4OOO,-
900. "
Limit Highest Tax
In the readjustment of surtaxes, ~Mr.
Houston proposes the division OF IN
comes into Saved" or reinvested ana
spent" On the former class ne would
limit the highest tax to 20 per cent
while the income spent would be sub
jected to tax ranging asHhlgh as oo
per cent. Under the plan proposed by
the Secretary, incomes between So,0Oo
and $4,000 would be taxed 2 per cent
on the part saved and the same on the
part spent The same ratio with d
graduated increase would apply to in
comes up to 100000 where the maxi
mum of 90 per cent on saved income
is reached. From $4,000 to $4,000,
the rates would be 20 per scent on;
saved and 25 per cent on spent; s4O,0O0
to $4,000, 20 per cent and 80 per cent;
$50 900 to $4,000, 20 per cent and 35
Der cent; $4,000 to 100000, 20 per
cent and 40 per cent, and over SloO,-
O60, 20 per cent and 80 per cent or
total tax of 70 per cent.
The present maximum rate is ~ per
cent on incomes Of 81 l,OOOO00, but Mr.
Houston declares it has "long passed
the point Of it's minimum productiV-
ity" since it encourages the investment
in tax-exempt securities. He says the
"only effective way to tax the rlch is
to adopt rates that do not force IN
vestment in tax-exempt securities
The new rates while not laying as
high levy the great incomes Will
the secretary expects, produce great
er return to the government since tne
wealthy class will not find it prohtable
to invest in bonds of states, countries
or municipalities which are tax
exempt, but pay lower rate OF IN
terest. -
These possible sources OF income
are mentioned for the information OF
Congress-" Mr. Houston says. 'Whlle
| shall not attempt to discuss them
attehtion should be called to the ne"
and additional consumption taxes.
Reasons have been given for the be-
lief that no valid objection exists to
the employment of moderate NUMBER
of consumption taxes properly select
ed. but it would in my opinion. pe
neither wise nor expedient to increase
radically the volume of consumption.