The Washington herald., 1922-12-06
HOUSE. To RUSH
PLANS To CURB
N0N-TAX BONDS
Green Amendment Will Come
Before Lower Branch Under
Special Rule, Sponsor Seeks
DEMOCRATS OPPOSE BILL
Claim Municipalities in South,
Barred During War, viii Lose
Through lmpairing Market
BY WINDER r. HARRIS.
Universal Service.

BY WINDER r. HARRIS.
Universal Service.
Plans were agreed upon by the
House ways and means committee
Yesterday for action at the pres
ent session of Congress on the
Green joint resolution proposing
an amendment to the Federal Con-
stitution to put an end to the issu-
ance of tax-exempt securities.
ASK SPECIAL RULE.
Representative Green OF Iowa.
sponsor of the resolution and rank
ing majority member of the COM
mittee. was instructed to apply for
q special rule giving the measure
right-of-way In the House at the
earliest possible date.
Representative Green said he
was hopeful of getting it up before
the Christmas holidays. Il 1t can be
sandwiched in between appropria-
ton bills. The money measures,
beginning tomorrow. will have
precedence over everything. Re
publican Leader Mondell was of
the opinion that these bills will
consume all time up to January 10.
If passed by the House it will
be pressed for final consideration
IN the Senate before the present
Congress expires March 4.
FAVORED GENERALLY.
Both President Harding and Sec
retary of the Treasury Mellon have
strongly recommended the amend
ment. the Republican majority in
the two houses Of Congress are oe.
clared TO be almost solidIy for it,
and the recently-formed Progressive
bloc has indorsed it in principle
The only serious opposition comes
from the Democratic side of Con
uess. Some of the Southern Sen
ators and Representatives take the
position that their States, counties
and municipalities. which were cut
off from floating loans during the
war, are far behind in necessary
public improvements, for which
bonds must be issued Passage OF
the proposed amendment. they say,
would impair the market for these
securities.
TENT OF AMENDMENT.
Following is the text of the pro-
posed amendment:
Section l. The United States
shall have power to lay and col
lect taxes on income derived
from securities issued, after the
ratification of this article, by OF
under the authority OF any State.
but without discrimination against
income derived from such Sc
curities and in favor of income
derived fran the securities is
sued. afterShe ratification OF this
article. by or under the authority
of the United States or any other
State.
Section >. Each State shall have
power TO lay and collect taxes on
income derived by its residents
from securities issued. after the
ratification of this article. by or
under the authority OF the United
States: but without discrimina-
tion against income derived from
such securities and in favor of
income derived from securities
issued, after the ratification Of
this article. by or under the au-
thority of such State.
HARDING'S ENDORSEMENT.
In his Endorsement. President
Harding said:
/ think our tax problems, the
tendency OF wealth to seek nom
taxable investment, and the men
acing increase of public debt,
Federal, State and municipal-al
JUSTLY pIOpOSdI " Clldii6C llc
Constitution so as to end the
issue of non-taxable bonds. No
action can change the status OF
the many billions outstanding. but
we can guard against future en-
couragement of capitals paralysis.
while a halt in the growth of pub
lie Indebtedness would be beneficial
throughout our whole land.
Secretary Mellon said:
The ever-increasing volume of
tax-exempt securities ISSUED for
fhe most part by States and mu-
alcipaliticsl represents a grave
economic evil. not only by reason
of the loss of revenue which it
entails to the Federal Govern
ment, but also because of its ten
dency to encourage the growth of
public Indebtedness and to divert
capital from productive enterprise
The issue of taX-eXempt Secur-
ities has a direct tendency to make
the graduated Federal surtaxes in
effective and non-productive. be-
cause II enables taxpayers subject
to surtaxes to reduce the amount
of their taxable income by invest
ing in such securities: and at the
same time the result is that a
very large class OF capital invest
ments escape their just share of
taxation.
The committee report says:
The amendment proposed strikes
At an evil in our system of taxa
ton. which is already great and.
IL unchecked. will grow to such