The Washington herald., 1921-10-02

T-vHE present revenue law was improyised to
meet the war emergency. 1t cannot be de-
nominated rational revenue law or be re-
garded as exposition Of the permanent
fiscal policy Of the government II was crude IN con-
eepton and formulation. 1t is difficult Of interpreta-
ton and application 1t is inequtable in the incidence
Of the taxes imposes and in some respects at least
impossible Of administration These defects struc-
tural and inherent the law They cannot be recthed
by mere amendments. The only possible accommoda-
tion Of the problem with view to the formulation Of
permanent and dependable revenue law, IS that after
broad survay Of the taxable subjects and sources Of
revenue. new law be formulated which shall be acc
connodated to the controlling facts and which shall
eliminate the complexities ncongruities and insqual
ties Of the existing law. nv
The bill reported by the Ways and Means Com
mtee and which has passed the House does not meet
the situation either from fiscal administrative
standpoint Il is that ii proposes changes,
II not improvements in the law. The so-calied higher
brackets Of the tax which imposed rates above
thirtystwo percentum, have been repealed and pro-
vision made that the surtax onsncomes above $4,000
shall be 32 per cent II also provided that the rate
for the corporation ncome shall be increased from
Iz5< per cent and the excessprohts tax imposed
BY Title III of the act of 1918 is repealed
These in general constisute the changes in the law
made BY the bill. These changes could have been
Of the bill as reported by the House committee
The proposal to create the so-cailed tax sihplihea
ton board only promise that to the eishtythre
pages Of amendments proposed in the pending bill,
there shall hereafter be added another great of
amendments all Of which will but further compiicate
rather than expcate the provisions of the revenue
laws. Ii is fair to say that no one other than the
man who drew this bill will be able to understand it,
and he will have meaning for il which other per-
can derive from the text of the bill itself
Tor the calendar year ending December 81. 1919.
: 1 there were sssa76o persons who flied income
tax returns with the Bureau of Internal Revenue OF
these income tax payers I3os2 reported incomes Of
less than $4,000 and the remainder 7soo8 reported
incomes in excess of $4,000; sII3952 income tax
payers have aggregate income of $I4o3 Sooz7o and
2f88o8 persons have aggregate income of $5776oo
64o In $I4ooo,ooo,ooo must sustain the an
nuai living charges and expenses Of sII3o52
and their dependents and in the other $57556oo
- must sustain the annual living charges and
Of only 2I88oS persons. The average annual income
Of the persons in the first class sass whereas the
average annual income Of the persons in the second
class is $76.3o5.
OF the incomes below the $4,000 classification
age Of IS per is derived from wages salaries and
sonal efforts 60 per being derived from wages and
salaries alone or the above the $4,000 class6ca-
ton the bulk Of them derived from property and
property inycstments. The pending bill reduces tax
alton from maximum surax rate Of 6s per cent to a
maximum Of 81 per cent on incomes which exceed
10000 but makes reduction whatever Of surtaxes
below this amount. Taxable incomes under $4,000
are afforded relief whatever. They
quired pay upon the first $4,000 per cent and
income which exceeds $4,000, per cent normal tax
and in addition thereto surtax of per cent the
income between 5000 and $1,000. surtax of per
cent the income between 10000 and $1,000. and a
surtax Of per cent upon the income between $1,000
and $roooo which means. that income between $1,000
and $4,000 pays cent normal plus surtax Of per
cent which gives efeetual rate Of per cent
such incomes. This is an unreasonably high rate on
incomes which must sustain the cost of living for