Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-10-18
.FREAR PLANS To
|. CHANGE PRESENT
INCOME TAX LAW
Will Lead a Fight to Make
All Reports Public Prop
erty: Government Is Los
ing Money, He Says.

Washington, oct. 17.--Citina
reports that the Standard Oi
company Of New Jersey had de-
clared 400 per cent stock divi-
dend, Representative Frear, Wis
consin, republican member Of the
house ways and means commit.
tee. asked Secretary Mellon in a
letter today if the treasury had
invoked section 220 of the 1921
revenue act, (which provides
methods for reaching holders of
surplus when held for the pur-
pose of escaping taxation"
Mr.. Frear also wrote the sccre-
tary that, according q newspaper
dispatches subsidiary members of
the Standard Oil company were
declaring various stock dividends
and that the United States steel
corporation "wil take the same
course with Il surplus estimated
at several hundred million dol
lars"
In making his letter public to
the secretary Mr.. Frear an
IDullCtu Ill Il STATEMENT AiltiA ~
the next congress he would lead
a fight to make all income tax
reports public records, addine
that these were the only impor-
tant government records now kept
secret by law. Some campaign
ing will be required, Mr.. Frear
said, to change the present law
at may not get far during the
short session" he added, "but il
Is certain to bs live issue lr
the siXty-eighth congress"
1T is possible" MIR. Frear de-
clared. that disclosure of se'
crct tax reports held by the
treasury will show that over
5000, 100000 and possibly severa
times $20O,O00,00O is being lost
to the government annually
through tax free securities, stock
dividends and other escape slnice-
ways known to large taxpayers
that should be collected"
president Harding" said Mr
Frear. sought TO reach tax tree
securities by a constitutions
amendment, but for some reason
the proposal was smothercd and
never passed the house.
Congress, he declared, alone
was responsible for failure tc
pass corrective legislation.
Only the Treasury knows.
III the income tax is right IN
principle by taxing incomes, ac'
cording to ability to pay through
graduated surtaXes," Mr.. Freal
declared, then the law should bt
enforced equitably, In othel
words, il the ukeieller family
for example, with reputed in
come of a million dollars a day
places it's Standard Oil profits IL
stock dividends 30 as to render
them non taxable, it may be as
sumed that it has equally pro-
tected the remaining income by
large investments in tax free Sc
curities and, instead of paying a
hundred million dollars tax an
nually on this enormous income
as was generally supposed, it may
have been shaved down to one
per cent of that amount. No one
can tell. because the returns are
held secret under Nthe law. Only
the treasury knows.
The administration of the law
lies with Secretary Mellon whose
absolute honesty is not questioned
in following the strict letter OF
the law, but Mr.. Mellon is quoted
by Klien to be worth 300,0OO,OOO,
which, If reasonably accurate,
should yield an annual income OF
about s15.00O,00O or more an
nuaIly, while his daily income Of
$4,000 is several times his an
nual salary as secretary of the
treasury. Whether Mr.. Mellon
avails himself OF the same ave-
nues of income tax escape as MIR
Rockefeller is only known TO the
secretary of the treasury who has
the records and what is true OF
Mr.. Rockefeller and Secretary
Mellon is equally true of many OF
the twenty thousand individual
income tax payers whose annual
incomes are supposed TO run
from $4,000 to $2j0,000,000 each,
If correct reports are to be had
These are all kept secret today