The Bridgeport times and evening farmer., 1921-12-07

prise and to prevent normal business transactions with the result that natural industrial development is re- tarded, MT Mellon adds:
 'fThe idea seems to be prevalent that in taxing large incomes only the per son receiving the income, and who is to pay the tax, Is really concerned. This is a mistake, for whatever the government takes in the way of tax, out of any income, which would other wise be saved and invested, and thereby become a part of the capital and of the wealth of the nation, af- whom it is taken. as it does the whole people of the country, in the direct loss of productive capital.
 After all, the wealth of the coun- try, upon which all the activities and the prosperity of our people depends, is made up of the private property of the individual citizens-of all the people-and anything that uneces- sarlly takes away from the accumu- lated property necessarily injuriously affects the people as a whole.'
 Discussing the proposed adjustment of the tax on business profits, Mir. Mellon suggests no specific rates, but i calls attention that the repeal of the | excess profits tax made necessary an increase of 2 1-2 percent in the cor ! poratton income tax and that th;s, with the capital stock tax, makes the
 total levy on corporations approxi- | mately 5 per cent.
 ! When we remember" he writes. l that the great bulk of the business
 Of the country, both large nd small.
 is carried on under corporate form l and that the net income must largely | De distributed in dividends. and that 1 these dividends are then :n turn sub | ject to surtax in the hands of persons 1 receiving them. it is at once seen that the resulting taxaton to persons en- gagged in productive businss s very | heavy. For instance a stockhoIdei l hi f1 1 pays about 25 per cent on his diYi dends, while a stockholder subject. tc | a 50 per cent surtaX would be taxed about 65 per cent on such profits Declaring that there were two
 "chief objections" to the present hisf
 "estate. tax rates, running up to 2;
 percent on the total value of estates
 MT. Mellon says much of what he ha!
 plies equally to the estate taxes. An
 other objection hc sets forth is tha
 in many instances a forced liquidation
 of estates to obtain the necessar! money to pay the taxes results in los
 to the estates as we'll as "to everyon
 else who is interested in these prop critics, especially if at the same tim , 1 they desire to or must sell.'
 Referring to the oft-repeated state ment that the tax laws need simplify , ing, MT. Mellon declares that tn greatest simpEfication that can b made is in the reduction of the rates.
 So long as the rates were low. h asserts, there was not much diff culty in the law; even though tn , system was entirely new and the or , ganization administering it unfanl: liar with the operation of such a law '"The complexity of the law ia } as 1t concerns the income tax itself,
 MT. Mellon concluded, 'has arise , largely out of the high rates whic l make every point that arises involv 3 substantial amounts of money, an , which means that each possible ques AJ0,, ;e ncfo fod hxy he fo a Y, 9 by the government, with resulting de ! lay in the collection of the revenue l irritation and annoyanee and expens
 on the part of the taxpayer, and cost = ly litigation. With moderate rate. 3 very much of this difficulty woul IT. disappear"