Evening star., 1921-05-07
INDIVIDUAL TAX
PLAN PROPOSED
Representative Would Levy
! Per Cent on Net Hold
inqS of Person,

Levying tax Of per cent on the net
Worth Of an individual is proposed by
Representative Bachrach Of New jersey
a member Of the House ways and means
committee, as an alternative for the final
sales tax to make possible the abolition
Of the excess profits and other burden
some taxes. Representative Bachrach is
working on such a bill, and expects to
introduce it soon. In statement issued
today he says he agrees with Secretary
Mellon in his advocacy Of the repeal of
the excess profits tax and the so-called
nuisance taxes" but says a number Of
the other special excise taxes. such as
the freight and express transportation
taxes. should be eliminated.
But, frankly, I do not see how these
changes can be made unless there is
found some new source which we can
tap in order to get revenue to make up
for the money lost in the repeal Of these
taxes" Mr.. Bachrach says He thinks
customs receipts for the fiscal year 1922
will amount to twice the $500. 900
estimated by the Secretary of the Treas
ury.
Fnvors Sales Tax.
PERSONALLY I am still of the opin-
ion.' continued Representative Bach
rach, that the adoption of a sales
tax plan would be the simplest and
easiest method Of raising additional
revenue and at the same time bring
a reduction in the cost Of living and
a return of business prosperity. The
claim that such a tax would add to
the cost Of living I do not grant: the
state Of Pennsylvania has had sales
tax in operation for number OF
years-it applies to wholesale and re-
tail sales only. 1t is good revenue
producer for the state and that it has
not added to the cost of living is con-
clusively shown in the report OF the
United States Labor Department in
the Monthly Labor Review for Febru-
ary. 1921. This report shows the
change in cost of living in nineteen
cities from December. 1914, to Decem-
Der, 1920 OF the one Pennsylvania
city -Philadelphia-ther re-
port shows that the increase in the
cost of living during that period was
higher in the cities Of Buffalo. Cleve-
land. Detroit, Houston. Jacksonville.
New York and Norfolk than in Phila-
delphia. OF course. there is some op-
position to the adoption Of a sales
tax, but in my opinion we will have
it on our statute books sooner or
later.
However, as an alternative propo-
1
tion of bill which would levy tax
of l per cent on the net worth Of the
individual to take the place of those
taxes which feel very strongly
should be eliminated. Under the most
unfavorable conditions such a tax
should bring in more than billion
an exemption of $4,000 allowed to
each person under this plan so that
the person of small means would not
be affected by it, and they would not
be obliged to pay tax on their small
savings; it would encourage rather
than discourage the people to own
an encouragement of business thrift.
THE adoption of such a tax would
permit of a substantial reduction in
the surtax schedule, the elimination
of the excess profits tax and prac-
tically all Of the special excise taxes.
and in addition l believe 1t would
permit of a substantial amount being
set aside as sinking fund for the re-
demption of outstanding Indebtedness.
Successful in Europe.
'In several countries in Europe a
tax on the net worth Of individuals,
as suggested above. has been adopted.
and here in our own country we had
such a tax during the civil war which
was very effective in raising revenue
at that time.
"Such a law would force those to
pay tax who are now investing their
money in federal and municipal tax
exempt securities for the purpose Of
avoiding the payment of income tax,
and it would also force those individ-
uals to pay a tax who own unimprov-
ed property in growing business sec
tions Of the country upon which they
pay only local taxes and who refuse
to dispose of such property exceDtinR
at exorbitant prices; they would have
to pay a tax or else dispose Of their
property at market value. Such a law
would primarily affect the person of
means. but at the same time, If it's
adoption would bring a correspond
ing substantial reduction in the sur
tax schedule. as I think it would, the
burden of taxes would not be any
higher, and. as matter Of fact, would
he lesS than at nfe2eut"