South Bend news-times. (South Bend, Ind.) 1913-1938, 1922-04-03
S15,OOO,OOO OF TAX
EXEMPT SECURITIES
NOW ISSUED IN j. S.
Congressman Urges II Is High
Time to Call Halt IN
Tax Dodging.

citles and other political subdivisions
of the country.
m the Judgment Of Louis # Nc
Fadden of Pennsylvania chairman
or the house banking and currencv
co bmittee. 70 Is high time 20 call n
hiatt The flood OF tax-free secur-
ifids he considers "a gross violation
of social Justice in permitting the
evasion OF taxation by wealthy tax
dodgers.
ct is estimated " said McFaddeu.
that more than 81 900 600 600 Of
state and municipal taZ-free secur.-
ties were issued In 1920 alone In
tho year IL these securities We're
held by the wealthy whose federal
inoCme tax was % per cent Of their
tet4l income, the loss 20 the govern
meet was over S35.OO0.0O0. if the
interest on these securities averaged
Der cent"
NcFaddcn. who was formerly presi-
dent Of the Pennsylvania Banker
as ISOLATION and who is recognized as
one of the foremost financial experts
in fcongrcss. Is seeking 10 have the
constitution amended so that con-
grese would have the power 10 tax
TIE income from securities issued
by The states and their political sub
. divisions. and the states would in
turn De permitted 20 tax securities
Issued by the federal government.
Proposes Referendum.
de has joint resolution pending
in congress 20 provide for "a nation
wide referendum on his proposed
amendment. which would have TO be
ratIfed by three-quarters, or SO OF
The state. for tax-free securities TO
Doe made taxable
~ response 70 his request for ar
expression Of their attitude the gov
errors Of Idaho. New Mexico. Ari-
z0Da Colorado. Kansas. Michigan,
Montana. Nebraska. New Hdmp-
shire. Arkansas, Indiana. Alabama
Delaware. Utah and Georgia replied
thsf they were favOrdbly disposed
toward McFadden's proposal 10 pro
hi5it the economic evil of taX-free
seeHrities." in conformity with the
PRESIDENTS suggestion TO that end in
his message 10 congress in Deccm-
beR
Che governors of Mississippi Lou
isiana. Oregon. Vermont, West Nir-
gihia. Wisconsin and Missouri sent
McFadden non-cOmmittal replies.
whfle the governors of but six states
-2faine. Kentucky oklahoma,
Rhode Island Maryland and Massa-
chusetts-expresse opposition.
McFaCden is confident that once
his resolution IS passed by congress
his proposed constitutional amend
mPnt VIII receive the approval of an
Overwhelming number OF states
Workers Bear Burden
HrhC issuance of taX-free seCur-
lids makes possible tho creation OF
twc classes" NCFaddea stated 'the
wI1thy free from burdens of taxa
t4n. and the workers. who are
forced to bear the burden from
t}ch the wealthy are relieved.
rThs unque~tionably constitutes a
vi e5aGou of social Justice which is
"A a'izine iu widespread discou-
III the issuance of taE-free se-
ct esles is permitted TO continue "a
soki8l upheaya viii occur which
mas Doe $50 far-rcaching iu it's eGec;
as, 90 undermine our constitutions
edtfernmCnt
Iu the last fev years we have
seen tho personal wealth of tn.
coHnrry So rapidly aggregated into
TIC taN-free class that. whereas tbs
taxable income of individual taNpay
ers under the federal income tag
la# was S992. 972,9S5 I'm 1916. the
aIB6uut decreased TO $731.372, O55 IN
1917 and TO S392,24T329 in 1918.
Hdt IS nos TO DE supposed that the
attuaI income OF taxpayers had thus
decreased ON the contrary 10 is a
re5sorable conclusion that many OF
tnpm had converted their wealth into
similar rate of conversion they
vea.d Doe practically free of an I'M.
q iNe taxes 10y 1922
Wealthy Investor Receives
tThe wealthy investor receives az
mach net return under the present
tN law from per cent exempt Se
cliriries ass from a taNahle industrial
iuTe -ueut paying over 30 per cent
MIa.Hay- public utilities anl
tfscr -.rIuStrills' canot compete on
tn basis AND are now being de-
rtfxed of the capital which thel
uee3 for expansion. This is "a seri
oas handicap 90 normal progress %
ul4u try which should be termn
,ed.
aThere can DE no doubt that th
suauce of taN-frec securities. Doe
cau OF the ease i'm obtaining fund
Which they provide. encourages pub
lie ndebteducss. public eNrravaEanc
It'd public iuefhcieucy-in othe
words. a waste of public funds 81
raised
sAuowed 20 continue the issuanc
- taN-empt bonds also encourage
au political units issuing such bond
t6 rapidly approach thc.r bonding
fft ,r.rar tho fIN burden ffr- ore