The Connecticut labor news., 1921-04-22
WEALTHY TAX DODGERS
 SHIFT TO EXEMPT BONDS
Specific Evidence That Million aires Are Covering Up and Escaping Levy Even Though Their Numbers Are Increasing While Workers Pay the Bills.

How far have the rich of America gone in their search for avenues of 1 escape from the income tax?
 The senate committee on reconstruc- ton estimated at $14,O00,O00,00O the cOuntry's investment in tax-exempt se- curities nearly two and one-half times the pre-War total"
 David F. Houston, in his last report as Secretary of the Treasury, did not attempt to make an estimate of the amount, but he did say:
 Tax returns and statistics are dem onstrating what 1t should require no statistical evidence to prove. For the year 1916 net income amounting to $9o2, ,972, ,985 was included in the returns of taxpayers having net income over $3OO,OOO year. This aggregate fell to $731, ,372, ,153 for the year 1917 and to $401 ,1O7 ,868 for the year 1918.
 There is little reason to believe that the actual income of the richer taxpay- CTS of the country had fallen in that interval. It is not taxable income which has been reduced, and almost certainly through investment by the richer taxpay CTS in tax-eXempt securities. The effec- tive way to tax the rich IS to adopt rates that do not force investment in tax exempt securities"
 DODGERS INCREASE.
 Specific proof of the extent to which this refuge in tax-exempt securities IS being found IS given in the statistics of income for the year 1918, published a few weeks since by the Bureau of h. ternal Revenue, and the most recent de tailment of the wealth of the country.
 In these statistics it is demonstrated that for the so-called millionaire grOup'-thOse whose incomes are in ~eX- cess of $5O,OOO a year that IS, five per cent return on $1 0OO,OOO-there was during that year a reduction of 80 per cent. interest and investment income.
 In 1917, 19,1O8 persons in this group had $371 ,520, 1925 interest and investment income In 1918, 14,495 persons in the group had $214,259,233 of such income, a decrease of $167, ,261 ,092- This de- crease, furthermore, came about while the income for taxpayers of all classes fDOm this source increased by $49O,770,- 235 from $936,715,456 to $1,403, ,485 ,69l.
 Convincing as is the fact that the de- crease is confined to the millionaire group" there is a still more unquestion- able indication of what has happened. In l917 those who had incomes in ex- cess of $5O,OOO,OOO a year drew 72 per cent of the entire amount from the in terest and investment item. In 1918, the proportion had fallen to 13.7 per cent shrinkage of more than 80 per cent.
 TAX EXEMPT SECURITIES.
 From these facts 1t IS possible to ap- prOXimate the actual investment in tax exempt securities. An average return from such securities Is five per cent. A decrease of $167, ,092 in the income therefore represents an investment of $3.345.221 $40
 The year 1918 was the first in which the definite flow of capital toward tax exempt securities was to be observed. The figures on which Mir. Houston based his argument indicated decrease of 2 per cent in net income 1916 to 1917, but decrease of 45 per cent. from 1917 to 1918. The situation IS much more clear ly marked when the net income for the entire millionaire group is taken and not that alone for those having $30OOOO or more a year. For the whole group net income decreased AS per cent. from 1916 to 1917, but fell 469 per cent. from 1917 to 1918
 There is reason to believe that this flow of capital has been far greater since 1918 than it was during that year, Some authorities believe that 1t will be shown to have been twice as great in 101O- when "easy money" began to be much less in evidence-an that in 1920 it was as great as in 1918. The total would just