Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1922-12-11
Tho EXCESSIVE SnrtnX

SECRETARN OF THE TREASURY MEL
~ LON in his annual report 10 Congress
once more raises tho question whether or
not tho levy OF high surtax upon indi-
vdual incomes does not defeat tho purpose
of the tax. 1t is his judgment that it does,
and this judgment is based upon the expert
cnce of tho Treasury Department in collect
ing tho revenue OF the government.
Also It is the judgment Of less intimate
~ interested authorities that n tax may be
so high as to drive men Of large incomes to
seek tax-free investments as means Of
escaping the eXactions Of the government.
The more investors there are OF this class.
the less income the Treasury realizes from
incomes subject to the surfaces.
Tho manifest purpose OF the leves I'M
posed upon incomes is to raise money. These
taxes are not laid upon the people Of tho
country as a penalty. They are not laid
n matter of contiscation. They are not
laid for the purpose OF discouraging bust
ness or to prevent men Of wealth from
enjoying the proceeds Of their prosperity.
They laid solely to increase the re-
sources OF the Federal government.
When these taxes become so high or so
oppressive that men OF large incomes put
their money In tax-eNempt securities, with
drawing it as far as possible from produc-
tive business. the collections necessarily
fall off and tho government is the loser.
This is exactly what is happening in this
country, according to the experience OF Sec
rotary Mellon and tho Treasury Depart
ment. Less money is being received each
year from the imposition OF surfaces, 1t is
shown.
The remedy Mr.. Mellon proposes Is
straightforward measure. He urges
duction Of % per cent in tho surtax rates
now in effect And he makes this recon-
mcndation in the face OF opposition that he
knows he must encounter In both branches
OF Congress. He understood no doubt.
when he drafted his annual report that he
would be charged with policy designed to
relieve the rich men OF the country OF
some of the existing burdens of taxation.
He probably understood that he would be
accused OF some personal interest in such
4 situation nasmuch as he himself is one
Of tho nations richest men. But this did
not deter him.
Although the opposition which might
have been and probably was anticipat ed has
now developed, the administration seems
determined to press Congress at the first
favorable opportunity for downward re-
vision OF tho surfaces. The President and
Mr.. Mellon will find themselves strongly
supported in most quarters. The country
at large must eventually realize that Fed
eral taxes, rs applied to individual incomes.
are still excessively high. Some reductions
were ordered year ago. TO become encc-
tive during the current year. but they APP
Piled more particularly to the smaller in
comes. Similar decreases must be ordered
soon or late in the surfaces if the business
OF the counUy is to be resumed upon nor
NAL lines.
Moreover, the same argument which APP
plies 10 taxation that is cOnfscatorv i'm eff
feet applies to tariff rates. The duties inn
posed may he so high to bar the importa-
ton OF goods from abroad, and unless goods
arc imported. revenue from the tariff is
lost. When taxes are so high that large
taxpayers seek refuge from them in tax
free investments. the government is the
loser, not the man OF wealth