Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-12-21
|REWSE TAX LAWS,
PUT LEVY ON SALES,
| KAHN TELLS HOUSE
Excess Profits Measure
''Must Co." Banker
Declares.
PROBLEM is TO MAKE
INCOME TAX SOUND
Warns Against Exacting Excessive
Revenues From Larger Earners;
Also Opposes Exemptions.

Business Of the country is denlan anding
and must have revision of the tax laws
if it is to continEe a healthy growth.
Otto H. Kahn, New York banker. told
the House ways and means committee
today in the course of a statement in
which he denounced economic aspects
of the treaty of Versailles, and declared
for continuation Of income surta1es.
The excess profit tax must CO." Mr..
Kahn said. adding that while 1t was
theoretically sound its disadvantages
unbalanced its advantages.
Would Continue Income Tax.
Continuation of the income surtaxes.
Mr.. Kahn explained, was social and
economic necessity, but he warned
incomes OH the ground that they did
not produce the maximum Of revenue
for which they were designed. He said
also that he opposed any exemption un-
der income tax provisions.
Your problem," alr Kahn continued
taxes economically sound. 1t is a Ques-
tiOn Of finding how and what rates
can be made to produce the maximum
But / think there is danger in eXces-
sfve levies in surtaxes, and this should
be guarded against"
Favor . sales Levy.
Before Mr. Kahn was called Chair
man Fordney stated that he and other
members of the committee were in
one of the means OF raising the four
billions OF revenue needed annually BY
the government.
'It seems a sensible tax" said the
chairman. but we do not want a sales
tax that will be multiplied and pyra-
M N he >
We want to avoid law which will
cause to be passed on to the consumer
= levy which nets more profit to the
merchant than tax To the govern :
ment.'
The chairman added that under some
OF the present taxes merchants We're
adding. under the guise OF taxes,
much more to the price of articles
they sell than the tax levy justified.
He contended that this was one OF
the problenis which Congress must
solve 10 revising revenue lava
X versailles Peace .D~vsstattsx.- ~ z
Ar. Kahn was, asaed duril,s ii.ee;;
thought the signing Of the treaty OF
Versailles woul6 obyiate any Of the
Industrial AMI fnauci:ti.
now confronting the country. He re.
piled that the Versailles peace was 'as
equally devastating as the war III It's
Mr.. Kahn blamed 'the present fiuan-
cial turmoil for the predicament in
which the farmers. find themselves
He said their condition was not due to
firiancial deflation, because there has
not been financial 1s:iation SO far
Taxation. according to Mr.. Kahn.
was one Of the factors bringing about
a colIapse Of the market. He declar-
ed II was necessary that we retrace
our steps and re-est2blish a saner
and fairer system of taxation with
out any undue tenderness to capital"
Declaring that the rich ARE very
canny and will protect themselves
always" Mr. Kahn said capital should
pay its Just taxation and that sJS-
tenn must be worked out which would
compel those taxes to be paid.
Opposes Tax ON Hank Deposits.
Asked regarding recent proposals
to tax bank deposits. the witness said
such step would be almost calam-
itous in it's effect"
'It would practically make US go
back to the days of barter-would be
throwing monkey wrench into the
whole machinery of finance" said he.
Questioned as to the statement of
W. G. McAdoo, former Secretary of
the Treasury. published today, that
defiation had been carried too far and
that federal reserve banks should
be allowed to reduce interest rates
and member banks encouraged to ex-
tend more liberal credits, Mr.. Kahn
said, smiIingly, that with all due re-
spect to Mr.. McAdoo and his ability,
think that statement was made with
an eye to 1924 rather than to 1921"