The Connecticut labor news., 1923-03-02
Tax Dodging- Who Does lt?I
Facts and Figures Presented in an Address in the House of Representatives the Powers of Great Wealth Keep What They've
 Got While Poor Men Pay.
By JAMES A. FREAR 2epresentative from Wisconsin.

the country without discussing it's causes or cures we find enormous and unexpected tax lodging and revenue losses reported by the Treasury on the part of those best able to pay. The average taxpayer asks: Has any other government given to corporations equal rights and privil- eges? Does any other government report equal corporate business com pared withs it's total business? Does any other government report equal corporate profits compared with total business capital invested? Does any other government permit it's corporations to escape. personal taxation through stock dividends? Does any other government permit tax-free securities?
 Does not England, our largest business competitor, have far heavier taxes than ours?
 Should not wealth pay taxes accord ing to it's ability?
 Is not this an elementary tax prin- ciple with every government?
 Has private wealth accumulations in any other country approached our own?
 Are like tax-escape avenues for wealth. found in other countries?
 Is it not true that tax-free secur- ities are used to avoid taxes today?
 How many billions are so invested for tax-escape purposes?
 How many billions are now invest ed in stock dividends to escape per; sonal income taxes?
 If so per cent. income tax IS needed on $2oo,ooo personal incomes to col lect sufficient taxes for Federal needs, what should be paid on undistributed corporate surplus that avoids such tax?
 Is I2N petr cent. fair tax on such UT distributed corporate surpluses?
 How can tax-free securities be reached for taxation purposes?
 Does it not justify a so per cent. inheritance tax? If not, why note
 How can enormous corporate sur pluses be reached for taxation pur- poses?
 Is not a graduated tax on undis- t1ibuted corporate profits fair in prin ciple?
 Many queries of equal or greater importance naturally will occur. Those who are asked to provide ways and means are charged with the neces- sity of raising funds and to find a just method of doing so. That is their problem. While corporate op position and protests from wealth are certain to come, taxation IS not due to either, but because both are sub ject to the fundamental tax principle.
 In today's press will be found a large advertisement signed by the National City Bank; J. P. Morgan & Co.,; Kuhn, Loeb & Co.,, and other
 
 GOO in Cuban bonds at 5H per cent. thus be taken from the industries of America with the approval and active aid of these agencies to develop Cuba, but is it not significant that any. effort to collect existing tax rates from tax-escaping agencies brings howl of disapproval because industries are to be hampered?
 What is the answer if taxes are avoided by rich or poor?
 MT. Chairman, 1 am not complain ing that the National City Bank can mark off it's losses in foreign bonds or other securities and then make 25 per cent net profits, for this result may be due to efficiency or other legitimate causes which would speak well for the banks management; but as governmental proposition, 'af ter having earned 25 per cent. net profits in 1922, the bank should pay it's fair share of taxes if we are to meet Gov ernment expenditures.
 Secretary Mellon shows where $Io,- GOO, ,ooo,o ,ooo of tax-dodg1ng funds have been laid away beyond the in come-tax collectors reach. That amount we know is rapidly increas- ing In my remarks of December 20 before the House 1 gave a list of stock-dividend melon cutting which covered several pages of the 'Rec- ord" This list did not include the National City Bank, but BPS corpora tions, according to the Federal Trade Commission as stated, have distri- 1 buted $2,I4o,I5I,425 in 1922 in stock dividends that will escape personal income taxes, whereas the average little fellow, the individual who has 10 high priced attorneys, or the that have earned small net profit will scrape up every dollar levied on their non-escapable in comes. l