Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1921-01-06
HITS FEDERAL TAX
ON INVESTMENTS.
Chicago Expert Tells Commerce
Chamber Here Whole System
Needs Revision
DECENTRALIZATION URGED

Absurdties in the federal tax sys-
TEN were raked over the Goals Of criti-
cism today by George Il. Buckingham,
lawyer and tax expert Of Chicago, in
nm address in the Bellevue Stratford
before members of the Chamber OF
Commerce.
After a review Of what he termed
"glaring defects" in the methods of
imposing and collecting taxes, Mr..
Buckingham made these five recon-
mendations:
Abandon Invested capital" rs a
basis of tax computation. So far as
there is n levy on corporate profits,
make il fiat levy on actual profits.
Deccntralize the system. Make the
assessment locally.
Fix and determine the assessment
before the tax Is paid.
Make the assessment final, In the
absence Of fraud.
Make all levies uniform in rate and
application, as far as possible, and
make as few exceptions and exemptions
as possible.
Rulings Weary Brain
Rulings by government officials on
what constitutes Invested capital"
Mr.. buckingham declared, are enough
to cause attacks Of brain flag and
headache in every business center in
the country.
THE law and regulations have so
defined invested capital, :" he declared.
THAT no accountant would recognize It
Ms such if he met it at high noon in
the middle of the road.
1.-The thing which masquerades at
Washington rs invested capital. bears
Itt1o ,h1appa 60 ttu La nj
the bank or the factory. 1t is fair
to estimate that more than one half
of the time and energy of admin:stra-
ton is consumed in the hopeless task Of
asccrtaining this so called invested cap
ital.'"
Digniicd business men chuckled and
smiled as Hr. Buckingham told of a
| might school, the commissioner of In
ternal revenue has established to teach
Flaw and accounting" to young clerks.
so they could grapple with the involved
tax laws.
Exponents Of direct taxes were in
power in this country, the speaker con-
tinued. when the war came with its
heavy burden Of debt. The results were
income taxes. excess profits taxes and
other methods which dug directly into
the pockets of taxpayers.
Would Tax Soft Drinks
Some of Mr.. Buckingham's sugges-
tions may arouse the ire OF men who Use
pipe, cigar or cigarette or of the girl
who looks on chocolate ice cream soda
as 'simply heavenly"
The tax expert said an increase in
the excise tax on tobacco would ber-
haps add $500 100000 to the nation s
revenue. Another big revenue producer,
he said, would be heavy luxury tax
on soft drinks.
Mr.. Buckingham auditors smiled
when he further suggested heavier tax
on alcoholic liquors, but the smiles faded
when he added fused for those purposes
which are still legitimate"
At the beginning Of his address Mr..
buckingham spoke on figures which n
generation ago would have staggered
| taxpayers by their immensity. He men
toned casually that the naticn's out
standing obligations total twenty four
billions of dollars. In four years Of
war and reconstruction, he said, tax
payers have paid 45 per cent Of the war
cost.
Mr.. buckingham commended the army
reorganization plan. and pointed out the
economic advantages that would result
from a "naval holiday" such as has
been proposed by the United States,
Great Britain and Japan.
He was merciless in his criticism Of
Americas civil budget. The govern
mcnt has grown "too paternal," he de-
clarod. Expenses of the civil service
could be cut in two, he said, il the gov
ernment departments were placed on n
business basis.
Discussing the excess profits tax
which many business interests wish
repealed, the speaker said it Iuts Al
premium on extravagant management.
''ln its effect on business manage
ment," he stated, at is dcmoralizing
beyond any other economic factor
Mr.. buckingham sketched a graphic
verbal picture Of the thousands of clerks
at Washington employed in milling over
tax returns. Despite the size of the
clerical army, he said, it is four years
behind its work.