The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-04-11
EXPECTS GAIN IN
REVENUE BY
TAX GUT
III"
Secretary Mellon Believes High
Levy Is Check on Eco
nomic Activity.
By MERRYLE STANLEY
RUKEYSER.

(Copyrighted, 1923. by Star Company,
Inc, and distributed by Cosmopolitan
News Service.)
NEW YORK, April 11.-Secretai'y
Mellon suggests that we can IN
crease public revenues by lowering
the rate of taxation.
That sounds like a strange and
contradictory doctrine. but more
curious still is the fact that his
theory worked out in practice in
the collection of Federal imposts
last month.
MELONS views are a modification
of the old injunction not to Kill
the goose that lays the golden egg.
Ffe feels that extremely high taxes
under the old law surtax taxes
brought charges against incomes
of the well-to-do as high as 73 per
cent for Federal taxes alone
check the will to carry on economic
activity and to assume the in
evitable risks Of experimental bust
ness. The present maximum sur
tax is 80 per cent. (Fifty.eight per
cent including the normal taxi, and
Secretary Mellon would further re.
duce the surtax to % per cent.
Sees Clog On Production.
Speaking of the taxes to which
he objects, Pittsburgh's wealthiest
millionaire, who occupies tho posi-
ton Of Secretary of the Treasury,
says;
Taxes of this extreme character
are clogs upon productive business
and should be replaced by other
and more equitable taxes upon in
comes and profits. An intelligent
revision of these taxes should en-
courage production and in the long
run, increase, rather than diminish,
the revenues"
Of course, the gain in public reye-
nues for the first quarter, as COM
pared with the corresponding period
"a year ago, are not due primarily
to changes in the tax situation. The
increase is phase of present grow.
ing prosperity.
Taxation is at best a necessary
evil. The main purpose is to raise
public revenues to finance collective
activities of the State. In all dem
ocratic countries there has been an
increasing tendency to tax accord
ing to ability to pay.
High Rates Tempt Evasion.
Wealth is able and should be ex-
pected to contribute greater share
than penury. Excessive rates tempt
taxpayers to find means Of evasion,
both legal and otherwise. Mellon
rightly urges that the further
issuance of tax free securities, the
main avenue of escape from taxa
ton, be discontinued. He further
contends that lowering the sur
taxes will reduce the incentive to
avoid taxes through tax exempt
bonds.
The only disparagement to en-
terprise does not come from tax
alton. Often within private cor
porations there are forces that make
for inertia and standpatism. Huge
investments in machinery and pat
ents often make corporate man
ayers loath to accept new and bet
ter methods and devices. Heavy
mortgages plastered against the
tools of industry make for con.
servatism.
That captain OF industry from
Dearborn, Mich, is again at the
forefront of the consciousness of
Wall Streets leading financiers.
From Norfolk, Va. the report came
that Henry Ford had purcha sed
control of the Virginian railway, a
500-mile property lavishly built by
the late H. II. Rogers. Officials
and bankers of the company, as il
by definite agreement, refused to
affirm or deny the report. OBJ.
servers interpreted their attitude to
indicate that negotiations were un-
der way.
The Virginian, which is closely
held, runs into West Virginia to
within a few miles of the southern
most stretch of the Detroit. Toledo
and Ironton railroad. which Ford
dominates, 1t would be relatively
simple for a man with Ford's re.
sources to build a connecting link
between the two roads, and if that
were done the automobile manufac-
turer would control a railroad sys.
tenn from Detroit to the Atlantic
seaboard-a good route for the ex.
port of flivvers and Of grain and
mineral products from the Middle
West.