The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-05-10
DEBT REFUN
ST|RS Up TAX
PROBLEM
Melons Success in Retiring
Old Loans Brings Cry for
Lower Rates.
CONTINUED from First Page.)

Continued from First Page.)
going to have only five and a half
billions OF it, payable in fairly even
steps in the course OF q period OF
five years.
at is a splendid success for Mr.
Mellon but it raises trouble for US
If things are so happy in the Treas.
ury, why not also In the tax re-
ceiut or the citizen? That is what
the citizen wants to know. The
question is: What are we going
to tell him?"
Seeking to learn the answer to
that question, this writer after in.
quiry both in the legislative and in
the executive branch of the Govern
ment, comes to the conclusion that
at present the answer Is sort OF
deadlock between contending theories
or principles of taxation.
Mr.. Mellon, in an interview with
this writer. disclaimed any plan for
general tax revision. He said that
the Treasury Department was
working diligently at the problem
Of the simplification of the operation
OF the present revenue law for the
benefit of the taxpayer.
~
Department maintains, and will
continue to maintain, It's POSITION
regarding the unfrutfulness and
undesirablesness Of the surtaxcs
above 20 per cent.
These surtaxes, it was learned from
Under Secretary of the Treasury
Gilbert, will this year produce prob
unjust indirect discrimination against
lion dollars of revenue.
Few Pay at Highest Level.
From another source 1t was
learned that the number of persons
whose incomes carry them up into
the paying of the highest surtaxes
has been in the neighborhood of not
much more than one thousand.
The Treasury Department holds
that our highest surfaces are gigan-
tic failures in corraling the very
rich and in getting revenue out Of
them, and II also holds that our pres
ent enormous issues OF tax exempt
securities in this country are a most
unjust indirect discrimination those
those unfortunate taxpayers who
are not very rich.
AT that point arises the greatest
immediate question in scientific tax
reform at Washington.
fnl to people who have great funds
to invest Those funds escape tax
alton and yet provide income. What
then Of the man who gets his in.
come exclusively or dominantly from
effort, from commercial or profes-
sional toll, from personal labor?
Tax.exempt securities give the very
rich large area OF tax-exempt cap
ital. The lawyer and the doctor and
the rising business man, however,
find nowhere any such thing as tax
exempt labor. Every cent that they
get from their labor--above the tax
able levelifl invariably taxed"
Such are the observations now
widely heard in Washington in
highly influential conservative quar-
tiers; and it is known that these
observations have resulted in con.
ferences for the study of plans lead.
Ing to a remedy.
May Follow Britain.
The remedy principally suggested
% that we should follow Great Brit
ain in laying lighter tax on
earned incomes from effort than
on 'unearned" incomes from invest
ment. Many devices toward that
end are under consideration.
1t appears, however, that no gen.
eral program of tax reform Tin the
sense OF tax revision downward) is
receiving the support of Treasury
officials and of members of the
Ways and Means Committee of the
House Of Representatives and OF
members of the Finance Committee
OF the Senate. collectively.
The trouble is that simultaneously
there are projects for tax revision
upward by members of the Con.
gresional Progressive Group"
From the most intimately in
formed sources on the Hill it is
learned that conservative Congress.
men are now convinced that their
progressive" and radical col.
leagues are in earnest in their as.
serted desire to increase the taxes
on the incomes of corporations and
to lay taxes on the "surpluses' set
aside by corporations.
Thus there is force which tends
toward certain lowered taxes and
another force which, IL it gets q
chance, will tend toward certain
heightened taxes. The former force
hesitates to start a toboggan slide
for fear that the latter force may
turn 1T into a balloon ascension.
Ioudy the TWO FORCES stand and
look at each other; and Mr.. Mellon
continues to tidy up the Treasury;
and the chance exists that the
United States Government may have
acquired a quite considerable sur.
plusH of its own before the con
servatives' and the "anti-conserva-
tives" in Congress can agree on
how to reduce it by tax-reduction
legislation.
Copyright, 1929, Washington Press
Service)