Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-07-29

u. S. REVISION
OF TAX LAWS
CALLED VITAL
Credit Chief Says Business
Hats Because of Uncer-
tainty of Situation.
VIEWS OF J. H. TREGOE

NEW YORK, July 29.-Expressing dis
appointment that Congress has failed TO
revise the Federal taxation laws, !. II.
Tregoe. executive secretary, National As
ISOLATION Of Credit Men in message to
the SIS OC0 manufacturers, wholesalers and
bankers who are members, AYERS that
business will be in an uncertain state
until it knows just what burdens in the
way Of taxes it viii have to bea-.
Prafsing the efforts of President Hard
ing to reduce Government expenses, Mr.
Tregoe declares that a budget exceeding
s.. 800 O00, coo will hinder industry. He
says:
1T is our intention to conduct a coun-
try-wide campaign Of education regarding
the necessity of revision Of the present
system Of Federal taxation until we have
sent our views TO every American business
man and Congress has appreciated the
importance Of the subject in our program
for the revival of business. fair and
reasonable revenue bill should have been
produced before this and taken prece-
dence Of tariff legislation. This has been
our firm conviction and We are not only
surprised but disappointed that the posi-
lions OF the two matters should have been
reversed.
BUSINESS MUST
KNOW TAX.
Business will be in an uncertain state
until it knows just what burdens in the
way OF taxation it will be called upon to
bear. There IS no divorcing the revival
Of prosperity from a program Of rigid
economy in governmental expenditures
and a revenue measure that is perfectly
fair to business and equitable in the OBJ
tanning Of sufficient revenue for the re
Quirements Of the Government. We en-
phasize again that budget exceeding
three and a half billions for the present
year will hinder industries and every
effort should he made to economic. to
remove duplication in governmental func-
lions and the attainment Of dispatch and
economy in all matters wherein money
must he expended. We appreciate the
efforts of our President 10 accomplish
This, an effort that Congress should fully
appreciate. concur in and assist.
"A taxation bill founded on the very
closest economy should be produced I'm
mediatcIy and unless Il is done the slum-
bering Indignation will burst out and we
will fail TO realize that harmony which
ought 10 prevail when We are seeking
common ends and the nations progress.
One thing we must know. that if the
budget represents in dollars the same
sum that was expended the previous year
greater taxation for the reason cha. the
purchasing power Of the dollar has in
creased about 20 per cent The in
creased purchasing power Of the dollar
should be reflected IN decreased revenue
requirements. To seek the same sum IN
dollars would be-tO increase the burden.
Therefore. with the increas ed purrhas ing
power Of the dollar the needs of revenue
as expressed In dollars should decrease.
he al
executive and legislative departments OF
Government to give business just treat
ment and 10 show value for every dollar
received"
DOLLAR IN
TAX RELATION.
The August issue OF the Credit Monthly
under the caption. High Taxes IS. Fall
ing Prices presents a novel and new
view Of Federal taxation. saying:
The fact that for one dollar the gro
Ger will now deliver TO his customer more (
groceries than a year ago and the depart I
ment store viii deliver more OF its gen /
eraI merchandise, has a very significant
hearing upon tn etax problem. A redur
ton Of 20 per cent in the commodity in
Gex number Of the Bureau Of Labor sta
tistics means that one dollar today i
equivalent TO Sl.67 a year ago-thinkins
Of money As the measure Of command Of
commodities. To put It in another way.
90 cents today commands as many COM
modities as one dollar commanded
year ago, using the index figure referred
TO above
at is obvious that this changing rela-
tlOn between the dollar and the amount
Of commodities the dollar VIII command
in the market, has bearing on taxes. be-
cause the people, in paying the same tax
total in dollars this year are giving up
largely increased commodity cot nj.
THE process Of the changing relation
between the dollar and its command over
commodities is still continuing Indeed,
IL is possible that before we begin to
pay the tax levied for this year the com
modify index number will be 80 per cent
below its 1920 peak instead Of 20 per
cent. as now One dollar Of wholesale
commodities. when the tax comes due.
will then be equivalent 20 twice the
amount Of wholesale commodities of a
year ago. Since money is only a medium
of exchange and a measure Of commodi-
ties and service, a tax of S1OO would be
equivalent to tax Of 500 a year ago.
IMPLICATIONS
FAR-REACHING.
THE implications from this fact are
far-reaching. a tax of four billions to-
day represents a tax burden measured
by commodities Of eight billion dollars
n year ago. To be sure. our Government
like every government has incurred debts
IN inflated currency that must be paid
dollar for dollar in a currency that has
increased in buying power; but the Gov
eminent must seize every opportunity to
pare down expenditures for current and
future commitments If the financial
structure OF the country is to remain
sound. For to demand the same tax
total in dollars this year as last Is tan
tamOunt to doubling the tax burden as
measured In commodities. We can re-
duet the tax burden only by reducing
the tax total in dollars at a faster rate
than the index number Of commodities
falls.
This principle applies to all taxes.
whether they be Federal, State, county
or town. Any department Of govern
ment which maintains its tax levy this
year at the last years level Of dollars
IS laying upon the people the burden Of
delivering the equivalent OF a largely
increased volume Of commodities
Taxes are in the last analysis paid
by commodities. To demand the same
tax total in years OF falling prices is
economically a fallacious policy and is
bound to bring serious financial and eco
monte consequences"