Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-01-18
MUST THE STATES BE TAXED
TO HELP THE CORPORATIONS?
Secretary Melons Constitutional Amend
nent Would Help Industrial at the
Expense of Public Securities

A : THOUGH the peopl" had not had all
n The constitutional amendments they
could stand for year or two, Secretary
Mellon IS pcrsisting in his demand that
Congress submit to the States an amend
ucnt which vii, expressly permit the Fed
eral Government 70 taA the income from
State aud municipal bonds
Common prudence would suggest that
Congress wait until tho income tax. the
woman suffrage and the prohibition amend
ments had adjusted themselves 10 The con
dttions Of living before trying any. more
experiments Involving such radi'ai changes
n customary methods Of procedure.
The income tax amendment was urged rs
necessary grant OF power 10 Congress for
ne" in emergencies. but no sooner had il
been ratified than Congress began 70 levy
an income tax. The tax law in its present
form is iar from satisfactory and 1t is
likely ~ b" many years before Congress can
he educated t"thc point whore II will refuse
:" b" influenced by tn" d"magogic but talla-
rtou~ plea to tnS th" rich and to let the
poor escapr
The 'quaI suffrage ani"Hdment has dvubcd
the potential number ~ voters by giving
the vote 70 millions Of women who have
never done any political thinking and who
hUv" only the most rudiIn"ntary ideas about
the nature aud function Of our Federal sys-
tenn. Tn" women are not TO blame for
their lack Of knowledge and experience
They will gain both in time. But while they
are at Il there should b" no more expert
m"uts with extensions of Federal power.
And tho prohibilory amendment. with al
that can be said ~ its favor has produced
nll sorts of complications the unraveling OF
which VIII tax both the patience and in
gCnuitc Of the most skilled cnforr"rs Of the
law.
The Mellon amendment j. IL natural corol-
larry Of the uniRteigencc Of Congress in
lcgisiating under the income tax amendment
Heavy tavos have been laid on the incomes
from all kinds Of corporate stock and from
all forms of partnerships. Th" market for
corporHt" stock has suffered as Il result
Men with moncv TO invest have sought mu-
nicipal and State bonds tho income from
which cannot be touched by congress This
il because The Federal take. or large III
comes Hr" confsrntory IN" Goycrnuont has
lest The tU&", which it might have collected
II It's tax laws had been framed with any
appreciation Of the rights "r property!
It IS astonishing thai 81 experienced Il
banker a. Mr.. Mellon should seek to ,.ure
th" evil by abolishing the rcfuG" sought by
capital from c"ntiscatoTy taxes instead Of
by urging that more rCasonHbl" taxes bc
levied on large incomes But perhaps it i
Mr.. Mellon experience a u tion,rr Of in
dustrisl securities that has led h.m to e. lie
this course.
Il IS uud"uDr"d 'hut the ..,.r."r iol IL.
dustriGl and public utility ,'rGt'ir, has
been poor ever since tie war .urun,-- tax law
was passed. capita. Lus h"ou un.nterrsted
in public utility or manufacturing stocks
and bonds ~ permanent investment, be
cause the net yield OF these securities after
the dcduCtiOn "f III" income rt, has heo,