The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-05-13
TAXES AND POLITICS.


The present secretary of the treas
ury. also the present congress. are
showing tendency to become as sub.
servient to the beck and cali of~ths
farmers as were the same elements Of
the Wilson administration to the laboi
unions. This trend Is visible in the
attitude they are taking toward the
matter of tax revision.
The plan for a tax revision that will
take the shackles off business is los
ing ground at Washington. Secretary
Melons letter to Chairman Fordney
leaves 40 doubt. Political expediency
may doom the sales tax, which. up to
the present, has been gaining favor IN
congress and with business men.
The excess profits tax, counted on
for $500, 200, 900 this year, is to be re-
pealed,t according to promise, but the
same amount is to be derived by-a flat
tax on corporations. That is, corpor-
atoms that do not make the current
interest return on capital may be
removed. Surfaces are to be reduced
SO that no individual will pay more
than 40 per cent this year and SO per
cent in 1922, normal tax and surtax
combined, as against a possible 70 per
cent now. This because the higher
rates are uncoIlectfble,/ merely diving
capital into tax-exempt forms. But
the loss of revenue is to be made up
by readjustment in the lower sched-
ules.
Commenting on the situation as it
has recently developed, Roger w. Bah
son says:
There is no uncertainty as to the
present major influence on the minds
at Washington The Farmers Union
and other interests have joined in pro-
nouncement against a consumption
tax" They ignore the economic fact
that the present income tax is, in eff
feet, consumption tax. 1t is esti-
mated that allowance for federal
taxes carried into business costs is the
basis for about 70 per cent of average
retail prices, whereas a turnover tax
could reduce this to not over 3 VI per
cent of retail value. Nor should the
point be missed that the latter figure
is all that the government now really
RECEIVERS. The rest is dissipated in
business extrava gances, waste, and ex-
pense attendant upon computation and
collection.
That the western farmers should
oppose anything that will reduce re-
tail prices is understandable because,
SO far this reduction has put the heav-
lest losses on them. They are mis-
guided In not being Informed that the
sales tax is a step to reduce overhead
between producer and consumer, to
the benefit of both.
That the sales tax, to quote Chair
man Fordney. 'is the sanest, the most
economical and most effective means
of collecting government revenue"
majority in congress is convinced.
Senator Mccormick, the leading OPP
ponent, claims to have twenty only,
put of the fifty-nine Republican sena-
tors, pledged against it. Could the
sales tax be brought to a vote. it is
hardly to be doubted that sufficient
Democrat support would be forthcom-
than to make capital for 1929, out of
the ma jority party dilemma.
Congress has lost its heart, and is
in danger of losing it's head, to the
farmers. Their plea is vocal, every
day, thru two highly paid agents at
the capitol. The present congress was
elected on a promise to cut the red
tape of government regulation and
taxation which is strangling
business. Election over, the business
man rendered a vote of confidence to
the incoming administration and is
patiently. 1t now appears
that congress is tempted to violate that
play politics-te put
over stuffed elephant tax reform
in place of the real and necessary
relief