The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1923-04-06
NEED OF EXPENSE
SLASH IS EVIDENT
Cut Cost of Government Is
Urged By Speakers
LOWER THE TAXES
Papers Read Before the Man.
alto Social Science Club
Last Night

Proposed Tax Reforms" was the
subject discussed by the Social Sci
ence club last evening. w. A. Strea
ter prepared the leading paper, but
on account of his absence at Vino
ma, the paper was read by Judge
Lorin Cray. Thomas Hughes lead
the discussion. by mutual consent,
the subject for discussion has been
divided and will be discussed from
the standpoint Of national and state
with national tax reforms or more
properly perhaps national tax prob
lens. Like some clergymen after
choosing text, the writer of this
paper has taken the liberty Of an
nouncing the subject of proposed
national tax reforms and then stray
ed far from tax reforms in prepar-
ing this discussion" said Mr.. Cray.
/ shall confine myself almost
entirely to the revenue act of 1921.
and its predecessors. The revenue
act Of 1921 is divided into FIVE gen
eral heads, the income tax, the cap
ital stock tax, estate tax, stamp tax,
and miscellaneous taxes. The in
come tax in the United States is Of
recent origin and it's operations at
first were confined to taxing corpor-
atoms at a nominal rate in their net
profits after allowing a moderate
exemption. Rates were gradually
increased and the scope of the law
broadened by beginning to tax the
incomes of individuals, beginning
March l, 1913.
With mounting expenditures for
purposes of government, increased
labor by cost of war, the rates of
in nP sr1 ;rfl
uals and corporations were greatly
increased and exemptions were low
cred. There were also enacted sew
eral miscellaneous taxes such as
transportation. freight and passen-
ger, numerous luxury taxes most of
which have been repealed Working
on the theory that wealth should
{ pay the greater part of the tax bur-
ldens. The surtaX on individual
earnings and excess and war profit
taxes, in my opinion contributed
largely TO excessive prices during
and following the war prices.
Those Exempt Securities
Exempt securities consist OF OBJ
legations of the federal government
issued prior to 1917, the 311s percent
Of Liberty bonds obligations of the
various states and their political
subdivisions, and bonds issued by
federal land banks and joint stock
land banks. BY recent act of con-
gress these may be further increased
by issues of debentures bonds by the
Intern ediate credit banks now in
formation.
The income from the other liber-
ty bond issues on an aggregate
, empt from all taxes, except inheri-
lance taxes, and the income from all
isues is exempt from the normal tax
without respect to the amount Of in
dividual holdings. The demands
that has been created by owners of
capital far exempt securities by
reason of excessive taxation has
made it possible and has encouraged
states, counties, school districts,
villages and cities, to borrow beyond
safe and conservative limits and is
sue their long time bonds for pos
terity TO pay
Investment bankers and brokers
are now discouraging the wide
spread issue of these securities
even though this is profitable bust
ness for them" For some time Mr..
Cray talked Of the various forms of
taxations, their business and unjust
ness. The old idea of taxation was
TO tax all property and individuals
on same basis, but both federal and
state governments are fast chang
ing in this respect and have been
very successful in finding new and
devious ways to levy taxes without
much regard to equality. One of the
newer forms of taxation, is the cap
ital stock tax, which is an excise
tax levied upon corporations and is
perhaps justified if kept within mod
crate limits on the grounds that il
is in payment for corporate privi-
leges.
subject to similar tax or license
for the privilege Of doing business
under a provision for the leyying OF
clause in this law provides for tai
quor dealers and manufacturers oil
stills carrying on business contrary
to law. Proposals have also been
made TO levy tax as high as Is per
cent on such parts of estates as are
made up Of property the income
from which has been exempt from
taxation. There is no equity OF
fairness in proposals Of this kind
and IL is to be hoped that they will
never be enacted into law by either
state or nation. There are also the
vi
which are really licenses for the
manufacture or sale of certain com
modities, among which are liquors
tobacco and certain drugs.
Taxes Of Long Standing
These taxes are OF long standing
and at times have been widely ex-
tended. At or about the civil wal
time revenue stamps were required
on photographs and ] well remem
Der that in my youthful ardor as a
stamp collector / robbed the family
album OF the stamps found there
Taxes on telegraph, telephone mes
sages, admissions, sales and manu-
facturers are taxed under the head
of miscellaneous. Automobiles and
motor trucks come under the manu-
facturers taxes.
proposals have been very prom
iuently before congress during the
mast few years to widely extend the
sales tax idea so as to cover prac
ticaIly all retail sales. Reed Smoot
senator from Utah, has been a
champion of this idea. Retailers and
consumers as rule are opposed tC
this form OF taxation. II is perhaps
POSSIBLE to find a new way of taxa
ton to meet public expenditures and
tighten the tax burdens now unjust
Iy carried by some classes of pro.
perty and individuals, but the more