The Washington herald., 1922-12-26
SENATE PLANS
TAX-EXEMPT
ISSUES FIGHT
Progressive Leaders to Renew
Effort for Amendment of the
Constitution After Holidays
INCLUDE STOCK DIVIDENDS
La Toilette Heads Committee
to Collect Data for Drafting
of Scientific Schedule Soon

Effort to bring $4,000, 100000
in tax-exempt securities within
the range of taxation by amending
the Constitution, and to make all
securities issued in the future sub
ject to levy by the Government,
will be started by progressive lead
ers in the Senate Immediately after
the holidays, it was learned yester-
day.
STOCK DIVIDENDS.
The new tax legislation, which is
said to form one of the most i'm.
portant items of the Progressive
program. also will include a tax
upon stock dividends which have
been held by the Supreme Court
to be immune.
The issuance of approximately Sc
OO0. 900 900 in stock dividends within
the last few months, no part Of
which can be tapped for revenue,
is said to have caused Progressives
to seek action this session.
Senator La Toilette, Progressive
leader and chairman of the Senate
Committee on Manufactures. said
yesterday that his committee has
been collecting data preparatory to
drafting a scientific tax schedule for
the class of securities which would
be made taxable by the proposed
amendment.
While Progressives are prepared
20 hn
the matter has not been pressed
up to this time in the hope that Ad-
ministration leaders would propose
II. Senator Smith w. Brookhart,
newly elected Progressive from
iowa. yesterday said that he has
made a canvass among Administra-
tfon forces and that he has found
these Senators favorable.
INVESTMENT HEAVY.
4 The securities aimed at include
State and municipal bonds as well
as government Donds. Immunity
from taxation afforded by this class
OF ofrseCurities. il is declared. has re-
suited in the investment of approx.
mately One-twelfth of the national
sssl'h ss1 nv sSveqnment 10 mnhs IT free from
n Principal among those affected
by the proposed legislation, it is
said will be the large corporations
and wealthy individuals.
ss"EiYery Senator / have talked
with has been in favor of taxing
this type of security" Senator
Brookhart said. I'VE are hoping
that their interest will be sufficient
to have them propose the amend
IHent.s OF course this would make
u better at this session
BF9okhart said, however. that re.
gardlsss of whether administrati tion
forces or progressives presented the
amendment, there is sufficient
number of Senators in favor of the
legislation to pass il.
-s Since many of the State legisla
lures will be in session before
spring. il is proposed to have the
amendment ready for their action
before adjournment of this session
of Congress.
POINT AT ISSUE.
The only point which has not
been agreed upon. it was learned
is whether to draft the amendment
SO as to include securities already
in existence. Investigation shows
these to amount to approximately
$4,000 100000 and 1t is believed
that a much stronger fight would
result than if the amendment was
drafted so as to include only the
securities which may be issued in
the future.
While it is contended by pro.
gressive leaders that the Govern
ment has a constitutional right tc
levy upon securities already in ex.
istence, 1t is believed that their
efforts will be confined to taxing
future issues.