The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1924-01-12
.COUZENS SEEKS
DEBATE WITH
MELLON
Millionaire Senator Holds Tax
Favors to Rich Are
Unwarranted.
CONTINUED from First Page)

Several years ago, from pere0nal
experience" said COuzens' loteerS
had many investments which ON the
basis Of the money put into tneSe
Investments returned me from ~
to 40 per cent, but on the basis OF
market value for these investments
they only returned about ga per
cent. I. therefore, believe that your
statement that the proper basis Is
the market value of securities ~ not
vel founded. The market basis ~
fixed because Of the earning ca
pacity of industry and mas no
WEIGHT with the original investor
except when he wants to sell MS
securities. The country is not IN
terested whether he is able TO sell
his securities, because 1t only means
a transfer of ownership ana not inc
establishment of any new machinery
or productivity.
Personal Experience.
"As a personal experience in this
matter. / point out that during the
the years the Federal Government
has collected income taxes ! have
paid into the Federal Treasury $S,-
223, 679.21, nearly all Of which has
been surtax.
an 1920, based on 1919 income, 1
paid IS per cent surtax, or total OF
81 1928, 161.75, to the Federal Treasury.
"This resulted entirely from q
transfer Of ownership Of certain
property I had and in no way had
any effect whatever upon the indus
try of the country.
Had the present law beer In
force, I would have saved nearly
81, 00O, 900, and il your present pro
posal Of a maximum Of Is per cent
surtax had been law, I would have
saved nearly $4,OO0,O 900: so that I
do not see where the country
gains by creating these enormous
savings for those well able TO pay.
Sees Dividend Deluge.
III your proposal is enactsd into
law, there will be a delIlge Of
dividends out Of industry to private
individuals many Of whom I'M
doubtedly have adopted the plan
that you 30 we'll know about,
namely, that Of dividing. estates
among members Of q family 30 as
to reduce the high bracket in
comes, and following, Of course, re-
duce the percentage Of surtax.
Senator COuzens challenged Mr..
MELONS, statement that billions Of
wealth are hidden away and stag
nant in tax-exempt securities. He
declared that the wealth invested
in this. class Of securities represents
only per cent of the wealth OF
the American investment field. and
he further asserted that 1t was
q II dGxunvsIrinr - hanoSS@a ~Dau 0oN@pA.
ly put into municipal enterprises
and public improvements.
Tax.Exe1npt Issues.
you refer to the tax-exempt Sc
curities with great frequency" con-
tinued Senator Couzens, land great
ly everyday the effect they have
on government revenue.
The entire amount Of outstanding
tax-exempt securities in relation to
the total outstanding amount Of
corporate stocks and bonds Of every
kind is SO small as to give an APP
pearance on the whole discussion
as a tempest In teapot"
"In this connection, might add
that such men as the late Mr..
Rockefeller, who are quite familiar,
as you point out, with the posgibili-
ties of the best Industrial stocks,
yet who invest largely in tax-exempt
securities, do so very often not
from any desire to escape taxes, but
rather from a desire to escape bust
ness responsibilities and risks and
to insure the future income Of their
families. This is my own expert
ence, as I have largely invested
my capital in state, county and
municipal bonds, on which / really
prepaid the taxes by taking q
greatly reduced return from what
could have secured had ! taken
investments in new industries with
the possibility Of securing returns
such as are made by original inves-
tors in motor stocks, bank stocks,
and other more or less hazardous
undertakings"
Arrays Figures.
Senator Couzens quoted an array
Of figures from official Treasury rO-
ports to support his contentious In
regard to these tax-exempt secur-
tiles, and then said:
Judging from these evidences
taken from publications Of your
own department, 1t would appear
that the receivers Of large incomes
are not escaping any such large
amount Of taxes through ownership
Of tax.exempt securities as would
make It desirable for the Govern
ment to lower surfaces In order 20
secure more revenue for itself or
to release capital for business in