The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1921-04-15
TAX STAND
OF HARDING
IS APPROVED
Consensus of Intention of Re-
publican Leaders Supports
Two Definite Recommended
tions on Taxation Subject.
INTERPRET HIS VIEWS
BY MARK SULLIVAN

part of Republican leaders in the
house of senate supports the Two def
mite recommendations President
Harding made on the subject of tax
alton One of these recommendations
was specific. He said, We are COM
mitted to the repeal of the excess prof
its tax" The other was less defin-
ite, but no we'll informed hearer mis-
understood it. President Harding
called for The revision or repeal of
those taxes which have become un-
and are so artificial and
burdensome as to defeat their own
purpose"
BY these words everybody under
stood President Harding meant that
the income and surtaxeS on very large
incomes are turning out to defeat
their own purpose. and should, there
fore. be repealed. This opinion is
una nimous among all the leaders who
will be responsible for the new tax
program.
The Republicans draw the line be-
tween large incomes and smaller ones
is $50, 900 a year. On the so-called in
comes of $4,000 year or less the
income and surta1es run from roughly
40 per cent at $4,000 a year, down to
per cent on $1,000 a year, on the
big incomes, from $4,000 a year up
ward. the income and surtaxes are
roughly, from 40 to 70 per cent 1t is
on these big incomes that it is pro-
posed to make reductions. SO that the
highest rate paid by anybody will be
40 per cent.
Defeat Own Purposes.
The purpose of the reduction on
these incomes is not to make things
easier for the rich. 1t is because the
Tch have found it profitable to put
their fortunes wholly or largely into
liberty bonds Or into state and mu-
nicipaI bonds which are exempt from
taxation That is what President Har-
ding meant by saying these higher
taxes are so artificial and burden
some as to defeat their own purposes"
Now. if these lager incomes taxes
and tho excess profits taxes are to
be repealed and the expectation in
Washington is universal that they will
be the next question is, where shall
We get the taxes that formerly We
have been getting from these sources
y To this question two answers are
pre- posed. Oneis that the rate of tax
alton on small incomes shall be in
creased. This suggestion will strike
the army of small income tax payers
as startling. But the fact is il is
seriously discussed as the alternative
in case the sales tax should fail.
Propose Sales Tax.
The other answer is the form of
taxation called the sales tax or the
turn over tax. The tax, in its simplest
form-in the form in which Senator
Smoot of Utah introduced it provides
for a fat tax of l per cent on "all
goods, wares. or merchandise sold
Even in the simple form to which Sen,
ator Smoot has tried to reduce the
idea, there are several exceptions OF
exemptions. One is that a merchant
or other person whose total gross
sales are under $4,000 a year should be
exempt This would leave most farm
ers free of the tax. Another exemp
ion is that goods sold for export
should not be taxed.
How this new proposal will fare in
congress cannot be foretold. Senator
Smoot is the chief advocate of it. and
it is no secret that even some of his
associates on the finance committee
SO not share his conviction, the rea
sons animating these doubters have
little to do with the merits of the tax
or with its practical effectiveness
The hesitation is based on doubts
whether it can be put through con
gross and fears lest it should turn ou
to be so unpopular as to hurt the Re
publican party.
Expect Opposition
n Undoubtedly. among the rank anf
file of congress, and especially of the
lower house, there will be much op
position. This opposition is supposed
to reflect the prejudces of that figure
potent in all political considerations
who is called the little fellow. Blu
the fact is the great majority Of the
little fellows" are paying very con
siderable income taxes now. The onl,
possible hope of any relief for these
small income tax payers lies in the
passage of the sales tax.
Many radicals oppose the sales taI
because it violates their most ancien
contentious that there should be M
taxation on fundamentals of food
clothes or shelter. If the Republi
cans had the courage that their i'm
mense majority ought to give then
they would face boldly this ancien
plea against taxes on consumption.
Inevitably taxes must fall either OF
consumption or on non-consumption
There is no escape from that In tn
present state OF lne "Orlu IL is pre-
cisely consumption that ought to b.
taxed and not consumption tha
should be rewarded by exemption from
excessive taxation.
Non-consumption is merely anothe
word for savings. Men should cor
tribute to the expense of society il
proportion as they consume the worl
of society. At time when the worl
has recently destroyed so much of it
q stored up goods. and when there i
SO much need for another accumula
tion of goods to replace the waste O
war through saving and self denial tn
objections to taxes on consumption
have not the same weight as they ha
before the war.
Copyright 1921 by the New Yor
Evening Post, Inc.)