The Topeka state journal., 1922-12-07
STOCK DIVIDENDS.

There are other ways of evading
federal taxes besides investing money
in liberty and municipal bonds. This
fact is emphasized by the numerous
stock dividends which have been re-
corded recently. Huge surplus prof
its have been converted into capital
by this method without adding any
thing to the productive capacity of
the business involved in these trans
actions or to Uncle Sans income.
There is a decrease of 1897, ,s05, 900
in the taxes collected by the internal
revenue bureau in the fiscal year end
ed June 80, 1922, compared with the
preceding year. Practically all
sources of revenue showed a decline,
the only notable exception being to-
bacco taxes which showed a gain of
SIS. 900, partly because OF statu-
tory changes and partly as result of
increased consumption.
The most striking item relates to the
collections on income and profit taxes.
These amounted to $2.os6,91s, 900
compared with ss.22s,137.OoO for
1921, thus registering a decrease of
$I,I41,219. 200, the equivalent OF
about 35 per cent. This represents a
serious impairment in governmental
revenue The relative loss in the in
come of the federal government is so
large as to be startling. The decline
may be associated to some extent with
the culmination of postwar depres-
sion, for incomes were seriously cur
tailed during this period OF deflation.
It may be questioned, however, If this
was the major contributory cause.
The remedy VIII not lie in raising
the tax rate or piling on more sur
taxes. These, in the opinion OF stu
dents OF taxation, would merely serve
to aggravate the situation and dry up
the sources of national revenue. What
ls needed is a sound Taxation system,
and in order to be sound, it must be
based on justice and impartiality.
Such is the sales tax.
Political expediency is mainly re-
sponsible for the ailments of our reve-
nue. situation. AS matters now stand,
we have about s per cent OF the per-
sons in the United<6tates. engaged in
gainful occupation, paying the billions
of income taxes. The very wealthy
pay InuCn less lldn NEl1lG
millions with small incomes, but new
ertheless incomes large enough to en-
title them to share in the support of
their government, escape entirely. As
a result, virtually the whole burden
falls on a small proportion of our pop
ulation, the enterprising, constructive
spirits whose capital and whose en-
ergies must he the main reliance of
the country for its economic progress
and its industrial guidance.
The very wealthy. who undoubtedly
were the targets OF attack, have been
able to accomplish their escape from
high taxation thru various avenues
Under existing conditions, the govern
ment not only suffers loss of revenue,
but the business and industry of the
country are handicapped thru the diff
ficulty of obtaining sufficient capital
for individual enterprise. With taxes
falling so heavily on the intermediate
classes-the groups between the very
wealthy and those paying no taxes at
ala tremendous impost is placed
upon constructive endeavor. Those
who employ their energies and their
capital in developing the resources of
the country find themselves carrying
practically the whole burden of the
cost of government