Evening star., 1921-07-31
TAX REVISION BILL =
WILL BE EXPEDITED
Report on Measure Promised Soon After
Middle of August of Its I'M
portant Features Forecast.


D nothing is SO dangerous, members
OF Congress realize. as not to know what
the tax is to be. and (2) if the machin-
cry to collect the tax is topheavy There
are cases today where it would cost
more to collect than the amount due
the tax is SO complicated, and in levy
ing federal tax the question of econ
omy in the machinery of collecting is
very important.
Growing out Of that is another con-
sideration which members of Congress
feel should be stressed: A tax SO un-
certain. complicated and difficult to
collect supplies the occasion for the big
business interests and important tax
payers to draw away from the Treasury
Department its tax experts. These big
business men can afford to pay big
salaries to these experts to interpret
their tax requirements-so you have the
very undesirable situation of the best
experts advising the individuals and
corporations how to evade the tax as
far as possible with less competent men
In charge of the governments forces for
collecting under the law. The existing
system encourages such a situation.
The business men are not to be blamed
for it. because they have to do it in
their own defense.
So it has been decided that the excess
profits tax must go-D because 1t vio-
lates all the three principles OF Ger
ftainty. economy and convenience" 2)
1t is failing of its own self. because so
little is being collected under it. The
excess profits are now SO negligible as 10
cost, as rule, more for collecting than
the amount collected.
go No tax ought to be levied on the
principle of killing the goose that lays
the golden eggs. On that basis there is
a demand which is almost certain to be
| respected to reduce the upper ranges Of
the surtax. These upper ranges that
reach 20 per cent drive incomes into in
vestments in non-taxable securities. The
higher incomes, therefore. produce less
| revenues than the lower incomes. We
have been getting the rates SO high that
the returns are diminishing. 1t is like
| making tariff SO high as to discourage
| importations entirely. and SO getting less
revenues instead Of more. The latest
| returns show a remarkable falling off in
F, the people paying taxes on big incomes.
not because the incomes cease 10 exist,
but because they are invested in sccuri-
ties on which ttXes do not have TO be
paid.
| Making Up Loss in Receipts.
| The repeal of the excess profits tax
and the reduction in tax on the higher
ranges Of the surtax and the repeal of
the transportation tax will mean an esti-
mated loss in revenue of more than
$500. 900. 600 That will have to be made
up but how?
I) The new tariff law ought to pro-
duce about s15O.000.o00 more than the
present law. The present law brings in
337000.000. Chairman Fordney of the
ways and means committee told his col
leagues that the new tariff act which has
passed ti,e House will bring in $500. .00O.-
900 more than its predecessor. That re-
mains to be seen, and some of the re-
publican leaders are far from being as
optimistic as Representative Fordney.
CD The proposed increase of the
fiat corporation income tax from 10
to Is per cent would mean probably
about s50o.OOO.OOO.
| go There is talk of increasing the
| excise tax on cigarettes and other
smoking tobacco, and it is claimed
that about $780, 900 could thus be
raised.
90 Some favor increasing the in
heritance tax so as to force it to
yield about $50 1000. 900 more, and sew.
| eral members of the ways and means
committee argue that this can easily
| be done.
| 60 There is dispute as to whether
| there should be a small tax on bank
! checks and an increase in postage. 1t
is considered unlikely that there will
| be a bank check tax because it would
be so extremely inconvenient 1t is
pretty well agreed that an increase
/, in letter postage of one cent would
be very convenient way of collect
| ing s7O.000,0OO and there is strong
| probability that il will be written
I into the new tax bill.
The nuisance" tax referred to by
| Secretary Mellon, or the soda water
tax, will probably be repealed on the
ground that it really yields little to
the government in revenue, while af-
| fording a great deal of nuisance to
practically every person in the coun-
try. One of the real reasons for do
ing away with the soda water tax is
| that a comparatively small percent
| age of the pennies thus collected
from the people have really found
I! their way into Uncle Sans strong