The Washington herald., 1921-02-14
BIGGEST PROBLEM
EVER FACED.


BIGGEST PROBLEM
EVER FACED.
Now, should Congress repeal the
various taxes the Secretary asks II
! to. the revenues would be sadly de-
| nleted. Not even suggestions such
as the one made recently by Rep
! resentative MCFadden to amend the
Constitution in order to impose a
tax on Federal securities would
remedy the situation, since such
measure, if practicable, would come
too late to help a country in such
financial straits as this country ap-
pears to be, according to the dag
nosis of the Secretary of the Treas
ury.
The Secretary says that, as he
cannot successfully collect the high
er surtaxes, or incomes. therefore
the higher rates should be lowered
and the present rates on smaller in
comes should be raised. Should
Congress follow the advice of the
Secretary. it would mean that over
1000. 900 income taxpayers would be
| loaded with that portion of the tax
cs which less than 100000 taxpayers
refuse to pay, for the Federal gov
ernment recently issued a table
showing that in 1918 only 15S.6O6
persons in this country had an an
nual income Of over $4,000, whereas
4.265. sos persons paid taxes on in
comes of $4,000 and under.
"Rut, due TO the opposition OF
Congress to the program of the Sec
retary there is little hope that
these discredited tax laws will be
revamped. AS the chairman of the
1t 70
said last month: We are facing the
biggest problem ever faced by any
country. 1t is going to tax the in
genuitv OF experts. and it requires
the help Of legislators, the govern
ment. and the business community
to equip America with proper rem
edies'"
Sees Sales Tax as solution.
The solution TO the problem lies
in the sales tax. in the opinion of
HOrd. who declares that its praCti-
cability has been demonstrated by
its successful operation in the Phil
ippines, where it has been found ="
equitable that the island govern
ment now intends to double the tay
rate. Canada on the North, Mexic"
on the South and France TO the
East. are all enjoying the benefits of
sales tax laws and Hord says that
this country could safely and profit
ably follow their example.
The sales tax might be described
as an indirect tax on certain per
sonal property collected at the tim"
of change of ownership. All per
sonal property is not reached by
this tax. but such kinds of personal
to a certain extent. incidentally, pay
other taxes which would be i'm
posed in the sales tax law. Work
stock. agricultural implements and
agricultural products consumed by
the farmer himself or sold by him
mightsn be taxed and this might
be a wise exemption.
Such a tax would be easily as
sessed and fully collected. Therefor
there are no nontaxpayers to enjoy
an unfair advantage over law-abid-
ing competitors. There are no provi-
sons in the law impossible of full
fnmsnt and all administrative reg
ulations would be made to fit com
merCial conditions.
If the sales tax law of the Philip
pines were used as model, the tax
collections would be ample for all
needs and yet would nevertheless
impose no hardships, Hord says. The
island sales tax is not heavily Gu
muIative, seldom exceeding per
cent of the cost price of the goods
to the ultimate consumer, which is
very low compared with the present
luxury consumption taxes uncom-
plainingly paid in the United States,
which run from per cent to 100
per cent on necessities.
Tax Virtually Concealed from
Consumer.
Internal revenue stamps are in
no case affixed to articles of mer-
chandise coming into the hands of
consumers in the Philippines. The
stamps are glued to merchants lii
censes and to invoices from the
manufacturer to the merchant, but
never are they glued to the goods
themselves. Therefore, the ultimate
consumer is allowed to forget, and
has forgotten, Hord says, that he
is paying tax.
"A few days ago" said Hord, "a
friend. now on Wall Street, but
formerly for several years in Man
lila, asked me what all this news
paper talk as to a sales tax was
about. / told him that II was the
same tax that he, as an ultimate
consumer, had paid in Manila for