Evening star., 1924-01-20

different from the Treasury bill. and
Mr.. Garner stops at A per cent. in
stead of so per cent. 1t is to be
noticed, however. that the middle in
comes pay the same SurtaX that
they pay under the present law. anu
the incomes in higher brackets pay
90 per cent, "A per cent surtax and
per cent normal as against So
per cent aggregate under the present
law. This change is hardly mate
rial. and the economic effect of taxa
! ton is completely ignored by the
Garner plan. The plan is political
and nothing else.
Reverscs Garner Plan.
Let us illustrate the political char
acter of the Garner plan by the
argument made by its supporters
against the Treasury bill They saw
that under the Mellon plan a man
with S1.O00,0O0 income makes saw
ing of about S250.000. whereas 200
men. each with incomes of $1,000 and
the same aggregate income, save only
S5,9oO. Reverse the picture. The test
or course, is what tax man must
pay. The millionaire, under the Mel
Ion plan, Will pay tax of $29S,192
and the 200 small incomes sSS.25 each
or a total as to them of only 1850.
The one high income pays forty times
the tax that the 200 small incomes of
equal aggregate amount pay. Did
the proponents of that argument be-
l1ere they were giving the public the
whole truth when they made it?
NO thoughtful person longer doubts
that, irrespective of his income. he pays
the high surtaxes in the general high
price level. For example the Balti-
more and Ohio Railroad Company has
bonds maturing next year bearing 3i2
per cent interest, the Chicago Miwau-
kee and St. Paul has maturities in the
same year bearing per cent interest.
Both roads will have to refund on a
6 per cent basis. The additional price
of money must be paid. not by the
roads, but by their shippers in freight
rates. The farmer, who alone must
meet world competition in what he
sells, i'll what he buys, pays the sur
tax. The New York renting commits
sion reports that tenants are in no bet
ter position today than they were in
1920. and that rents nave risen enor-
mously. Increased cost of building is
not responsible. Again the tenant pays
the SurtaX.
Public's Larger Interest.
The public should clearly under
stand what is involved in this effort
to re. .stablish in this country a sound
basis of taxation. The question is not
one OF whether two or three million
voters save in their direct payment
or tax SIS apiece, but whethe" by the
re-eStabltShment of an economically
sound basis the 10 million people in
this country will save much more
than SIS apiece in what they pay tor
the necessities of life. There is only
one thing which must be insisted
upon: the high surtaN must be re-
duced to a point where capital is
feed from their killing effect upon
new investments. To the solution of
this economic question, Mr. Garners
rected
The present rates of tax. aggre-
eating at maximum 50 per cent. are
treated as if they were the normal
rates of tax. Any reduction from
them, 1T is argued, is a great con-
cession to the rich. This is not true
Before the war required the taking
of every cent which could be OBJ
tanned for the support of the gov
ernment in its emergency. a surtax
rate reaching 13 per cent at 100000
was considered high.
Recalls Former Rates.
"As bit of history, substantially
as much revenue was realized from
incomes over 100000 out of this Is
per cent maximum in 1916 as was
realized in 1921 from the same class
of taxpayers out of the 65 per cent
rate. These high surtaX rates are
war taxes, and nothing but war taxes.
The war is over. Such taxation should
cease. To pretend to change them
and. no mere. is to keep up the high
war living costs which every one
pays.
we come. then. to the fundamenta |
differences between Mr.. Garner's plan
and the Treasury bill: His is a
makeshift; the Treasury plan is the
result of experience and study. His
seeks popularity by Offering a small
direct saving to the most taxpayers;
the Treasury bill is fair to all classes.
His is not intended to be effective on
the economic side of taxation; the
Treasury bill is designed to free cap
ital and to benefit not only the indi-
viduais who pay taxes direct, but
every person in the country who
must pay these taxes in every pur-
chase. 1t is the difference between
a political method of handling tax
reduction and business method"