Arizona republican., 1921-11-21
MONDAY MORNING. NOVEMBER 21. 1921
IhdUe ledrned that to do one's nert duty is to take c step toaOord aU that IS aVorth possessing.
 -J. c. Holland.
Our Verdict

Two Phoenix citizens have submitted to The Republican their divergent views regarding the action of in rejecting the wishes of President Har ding relative to the revision of the og $2o0o0o One of these gentlemen sustains congress and the other vaantly stands by the pres dent.
 As our income is somewhat short of s2ooooo we be said not be directly concerned in the surtax that may be regarded a disinterested and fair arber. We inclined take the side of the president. and in handing down opinion must indulge in recitation of circumstances
 The present surtax is 65 per cent The tax vision bill it passed the house reduced max imum surtax to s2 per cent The maximum increased by the to 50 per cent. bill with this and other changes with which the Phoenix disputants seem not to have concerned themselves, though many of the other changes affect them more directly. to conference where it expected compromise would be effected. But the senate con- ferees held doggedy to the surtax amendment and last Thursday that was accepted by the house.
 The house started out some months ago with two ideas regarding tax revision which both helpful and reasonable The first do away with the profits taxes which have only harmed the public by organizing production and distribution prices. but had lost their value the treasury revenue producers The second reduce income surtaxes to a point from which they woulI longer drive capital from productive indus try into exempt securities These of taxation had become clog business and bar to a return of normal economic conditions.
 This taxation during the served it's purposes. It brought the government very quickly and in large amount what it needed. High prices and active demand kept industry running regard less of the draft that was made upon it. Capital could afford to pay these taxes and still yield larger returns than ever before. But time coming Uhen denna and ould he xv1,e r,rices recede and when incomes would shrink
 Capital began to withdraw from industry and to seek refuge in axexempt securities to the volume of which billions had been recently added many other billions-federal, state and municipal. These securities had before been sought to great extent by capital refuge. They had been pretty well disseminated throughout the country. Large capital had found much profitable field in industry. But the situation changed. A man with a capital which had been yielding him $20O,oo0. 65 per cent of which was taken by the government naturally sought investment which though it yielded him something less than s20o000 left it all with him. He then had nothing to about and was no other expense than that of keeping his scissors sharp for cutting coupons
 is the theory of taxation, that taxes should be paid by the people in proportion to their ability It therefore matter of satisfaction to the great majority of whose incomes oppress- i've, that the laid so heavily upon great incomes and profits And the satisfaction would remain if did not perceive that the great incomes escaping through the loophole of tax-exempt securities and the same time that industries anguishing of the capital that escaped. Meanwhile the taxes to be paid and the rest of must pay.
 A maximum surtax of 32 per cent would leave incentive to holders of great capital invest productive industry, while fear that a maximum of 50 per cent will be effective keeping capital in hiding maximum of 65 per cent has been.
 Still of doubt derive satisfaction from the fact that the government is standing at the hole with a 50 cent club though the prospect of capital emerging is a dim
 We believe in short that 50 per cent maximum is more traffic will bear;" that if it had been IS per cent lower as the president advised. much of the capital would have to bear a great share of taxation and at the time to set the factories to smoking and the wheels to turning.