Great Falls daily tribune., 1920-11-10
off too rapidly. On the other hand if we do not

ing bonds for portion Of the sums falling DUE
They would have to bear pretty high rate Of
interest to get the money these days when per-
fectly sound corporations, and even nations
whose credit is not disputed, are offering eight
per cent for money.
Assuming that congress will agree with the
secretary of the treasury that we must raise
enough revenue to support the government and
pay its obligations they fall due and that such
sum amounts to four billions year for sew
eral years to come, there remains the much
more controverted question of how we should
raise that sum of money by taxation
Almost every one agrees that the excess prof
it's tax should be repealed. The present admin
istration recommended such repeal to congress
nearly two years ago. The Republicans did
nothing about it, but they are pledged to repeal
it latter election" AS a matter of fact it is
producing less and less revenue all the time and
would soon dry up a source of revenue. It
was war measure designed to tax swollen war
profits. 1t has worked very badly and at present
it is bar to the sale of real estate the erection
of new buildings, the development of the re-
sources of the nation, and rapidly becoming a
failure as a revenue producer No one has
word to say in its defense. We may assume
that it will be repealed as the secretary of the
treasury will recommend not for the first time.
1t ought to have been repealed some time ago.
It is when we come to consider what to put in
its place as revenue producer that wide diff
ference of opinion will become manifest. Secre-
tary Houston recommends an increase in the
income tax and super taxes to make up the diff
ference with a $4,000 income exemption. At
present we have only $4,000 income exemption
and that only for married men. Single men have
only $1,000 exemption. With all due respect to
the superior knowledge of the subject supposed
to be resident with the secretary of the treasury
his suggestion seems ia us to be almost foolish
The super tax now on incomes is working great
economic harm to the country, and an increase
would surely work more. Moreover it would re-
duce the revenue collected from the income tax
instead Of increasing it in our opinion. AS it
stands today it is doing that It is driving great
fortunes out Of investment in lines that develop
our national wealth and into investment in non
taxable securities in this country and foreign
loans Take for instance the fortune Of the late
Marshall Field which is said to be about hun
dred million dollars and was nearly all invested
in six per cent mortgages on city and country
real estate That would produce an income of six
under our present income tax laws to an amount
equivalent to about 70 per cent That is to say
five-sixths of these loans produce less than two
per cent net. Of course the trustees of the es-
tate are calling in these loans and investing the
money in non tax paying securities that net them
31a or Az per cent as fast as they can. The
result is that the government loses all its rev.
enue from this source and the money is with
drawn from productive enterprise besides. Nor
is this the full extent Of the evil that these great
super taxes work from the standpoint Of the
citizen Of the United States. A good deal Of
money belonging to great fortunes is not only
Withdrawn from productive use in this country,
but it goes abroad to work in other countries
where it receives better treatment That has
been done by the Astor estate in New York and
other big real estate holders These estates
passing piecemeal into the hands of smaller
holders cease to pay big taxes to the government
and the capital represented by them also passes
out of the country to go into foreign bonds or
real estate. Both from a revenue standpoint
and for the interests of the nation the big super
taxes of the income tax law ought to be reduced
rather than increased.
AS to what should take their place there are
all sorts Of suggestions. There is talk about
tax on sales which would be a direct tax on con-
sumption. One bill introduced in the last con-
gress proposes tax on land holdings with
$4,000 exemption. It is partly the single tax
idea. There is talk of big tariff tax on few
luxuries but it would be only drop in the
bucket as revenue producer. The same may be
said of any possible tariff tax There is talk of