Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1923-11-12
TAX REDUCTION
Continued from Paae one

Il. Make a rs percent reduction IN
the tax on income.
The fairness of taxing more light
ly income from wages, salaries and
professional services than the income
from business or from Investment
is beyond question.
1T is estimated that this amend
about $4,000, 900 a year. the ;rreater
part of which falls in. the lower in
come brackets.
=. Where the present normal tax
Is four percent reduce it to 3 per-
cent ana where the present normal
tax is percent reduce it tos 6 per-
cent.
This affects all personal incomes
ana the loss Of revenue comes largely
from the lower brackets. It ID esti-
mated that this will mean a loss in
revenue of SOL, 100000 a year.
50. Reduce the surtax rates by
commencing their application at $40,
200 instead of $4,000 and scaling
lnem progressively upwards to rs
percent at 100000.
This will readjust the surtax
rates all along the line and the treas
ury recommends the readjustment
not in order to reduce the revenues
but az a means of saving the pro-
ductivity of the surtaxes. In the
long run it will mean higher rather
than lower revenues from the sur
taxes. At the outset it may involve
a temporary loss in revenue but the
government actually estimated that
even during the first year, If the re-
vision Is made early enough, the net
loss in revenue from all the changes
in surtaxes would be only about
mn %lo% t., Ill
ty the revenues from the reduced
rates will soon equal or exceed what
would accrue at the present rates,
because of the encouragement which
the changes will give to productive
business.
'The readjustment of the surtaxes,
moreover, is not in any sense a par
tisan measure. 1t has been recon-
mended, on substantially this basis,
by every secretary of the treasury
since the end of the war, irrespective
of party. The present system is
failure.
1.-The high rates put pressure on
taxpayers to reduce their taxable in
come, tend to destroy individual in
itiative and enterprise, and seriously
impede the development of product
i've business.
The result is to stop bushes
transactions that would normally go
through and to discourage men of
wealth from taking the risks which
are incidental to the development of
new business.
'The growth of tax exempt Sc
curities which has resulted directly
from the high rates of surtaX is at
the same time encouraging extrava-
gance and reckless expenditure on
the part of local authorities. There
is no immediate remedy for this
within the power of congress except
the readjustment of the surtaxes on
a basis that will permit capital to
seek productive employment and
keep it from eXhausting itself in tax
exempt securities.
"a. Limit the deduction of capt.
tai losses to Il IL percent of the
loss.
1.-The present revenue law limits
the tax on capital gains to IL IL per-
cent but puts no limit on the capt.
tai losses. 1t is believed it would be
sounder taxation policy generally not
to recognize either capital gain or
capital loss for purposes of income
tax. This is the policy adopted in
practically all other countries having
income tax laws but it has not been
the policy in the United States.
at is estimated that this will in
crease the revenues by about $25,-
100000
as. Limit the deductions from
gross income for interest paid dur
ing the year and for losses not of
business character to the amount of
the sum of these items exceeds tax
exempt income of the taxpayer.
1.-THE 1921 act provides that inter-
est on Indebtedness to acquire or
carry tax exempt securities is not
deductable. This provision is. in
effective because taxpayer may
purchase tax exempt securities for
cash and borrow money for other
purposes.
"The estimated increase of rev.
enue from this source is $95.000,000.
"6. Tax community property in
come to the spouse having control Of
the income.
an some states the income of the
husband is joint income of the
husband and wife. and each, there
fore. is permitted to file return for
one half of the income. This gives
an unfair advantage to the citizens
of those states over the citizens of
the other states of this county. and
this amendment seeks to res Sire the
equality.
crease revenue by S8,000,000
'7. Repeal the tax on kilograms,
telephones. and leased wires.
"This would mean loss of revenue
of about $30,000,O00 year.
"S. Repeal the tax on admis-
sions.
"This would mean loss in revenue
of about S70.000,000.
"9. Miscellaneous nuisance taxes.
"Your committee may wish to con-
slider the elimination of various
small miscellaneous taxes which
have an inconsiderable bearing on the
general revenue of the government
but which are a sourse of inconven-
ience to taxpayers and difficult to
collect; and possibly there are some
articles of iewelry, such as. for in
stance, ordinary table silver and
watches.
"1O II addition to the specific
recommendations which directly af-
feet government revenues, there
should be amendments to strengthen
the act and eliminate methods here
tofore used by taxpayers to avoid
imposition of the tax.
al. Establish q board Of tax ap-
peals in the treasury but independ-
ent of the bureau Of internal reve-
nue., to hear and determine cases in
volving the assessment of internal
revenue taxes.
"12. Changes should be made In
The present law to simplify admin
istration, make the law more easily
understood. and permit a prompt
determination of liability in a man
ner more satisfactory to the tax
payel.'
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