The New York herald., 1921-02-13
Would Abolish Excess Profits
Levy and Adopt q Com
modify Sales Tax.
AHI INCOMES REPORTABLE
Propose Minimum Levy Of So
~ on All Who Receive an
Inc0me.

Administration and the next Congress
h enc put forward by the legal COM
mittse OF the Music Industries Chamber
Of Commerce. This plan, submitted to
rp NEW YORK HzRAIp yesterday. 10
hayed upon these fundamental ideas:
I. That the excess profits tax and So
called war time" excise taxes be abol-
ished and that the individual surtax
rates be materially reduced.
Z, That all persons residing In the
United States and having reached the
age Of 81 years be compelled to report
income and that minimum tax Of IS
be imposed upon all persons who receive
an independent income.
3. That the additional revenue re-
quiyed ESTIMATED maximum. $4,000
0oe.oo0). be raised for the most part by
q Uniform tax ON all sales of commodi-
ties, wares and merchandise. not in
Guiding capital assets, to be paid
monthly by sach seller.
eliminate Excess Profits Tax.
A countrywide investigation impels
the music industries to believe that the
excess profits tax must be eliminated.
not only because 1t proved to be difficult
OF administration, discriminatory aHd
conducive to excessive 'loading' OF
prices. extravaganza Of business man
agement and hestlity between tax
payers and the government. but also be-
cause its productivity has already
greatly decreased and Its future yield la
very uncertain.
The higher rates of Individual income
6urtaxes have proved to be confiscatory.
with the result that individuals subject
to them have placed their funds In tax
exempt securities instead of In business
enterprises. The Government has been
deprived OF the revenue which these
taxes were intended to yield and nor
NAL business development has been
greatly retarded. Therefore. the surtax
rates should be revised SO as to elirnl-
nate such conversion Of investments
from taxable to tax exempt securities
Well informed persons believe that sur
tar rates In excess of about 80 per cent
will cause a general transfer Of funds
to tax exempt securities and defeat their
own purpose.
The committee reporting the new plan
Offers the following comment regarding
the unfairness and insufficiensy OF war
time excise taxes:
"Not only would continuance Of these
war time excise taxes violate the essen
tiai principles of justice and fairness In
taxation. but they would fail In many
instances TO continue to yield the ex-
peoted revenue. Few industries. In nor-
nal times, and certainly not all those
now subject to excise taxes. can maintain
volume of sales and reasonable profit
when subject to an additional tax bur-
den Of from 8 to 10 per cent To the
extent that these taxes curtail industry
they curtail the source of the very reve-
nue. which they are supposed to yield.
and also decrease the revenue from the
income taxes OF those industries.
Canadian Example.
"The depressing effects of the Ca
madam excise or luxury taxes became
so evident that the Canadian Govern
rnent was compelled to abolish them.
The repeal has met with general public
approval 1t Is reported that a number
of plants have already resumed or are
planning TO resume production, largely
as q result of the repeal of these taxes.
'srhe Revenue acts of 1917 and 1918
created consumption or sales taxes on
about 30 classes of manufactured prod
ucts selected hurriedly, without any evil
any definite principle of taxation or
economics. These taxes impose an addi-
tlonal and discriminatory tax on q
limited number of industriesAand violate
the principle of equal taxation for ALL
which Is as vital as the famous principle
of mo taxation without representation
These taxes were justified at the time
only by the existing emergency and the
,rnperative need for additional revenue
ipa
were understood to be emergency taxes.
10 be repealed after the war. President
Wilson, In a message to Congress on
Nav 20 1919. said:
ssMany Of the minor taxes provided for
In the revenue legislation of 1917 and
fofs. though no doubt made necessary
by the pressing necessities Of war time.
can hardly find sufficient justification
under the easier circumstances of peace.
and can now be happily got eid Of.
Among these. hope you will agTee, are
one exclses upon various manufac turers
and the taxes upon retail sales
"These industries. with plants located
all over the country and with hundreds
OF thousands Of employees dependent
upon them. are now protesting against
the retention of any OF these ineQuitable
and discriminatory taxes. and will never
oease to fight for equal rights in tax
ktien."
Minimum Income Tax.
An interesting feature Of the report
Just made public is the recommendation
that all persons over 81 and In receipt
OF an income should be required to make
a raturn and to pay a minimum OF IS.
The recommendation Is as follows:
Recent Government reports show that
only l,ef2,000 persons made returns on
1913 incomes OF from $1,000 TO $4,000.
although there must have been many
millions whose incomes fell within
this group. Some method should be
found to compel reporting of these In
comes. Furthermore. persons whose tn
conres are less than the exemption should
not De entirely exempt from direct sup
port Of the Government. For these rea-
sons all persons with independent In
comes should be compelled TO report
same even where they are below the ex-
smptions. and a small tan should be Inn
posed on Independent incomes Such a
tar Of only S5 would add at least y90.-
o0eoO0 10 income tax revenues In addt-
ton TO forcing payment on many In
comes above $1,000 which are not now
rspartad."
Commodity sales Tar.
Meeting various arguments that have
been raised against the imposition Of a
commodity sales tax. the committee