The Birmingham age-herald., 1924-07-14
WHO PAY THE INCOME TAXEs7.

Income tax summaries TOT 1SzA, as recently announced by the treasury de- partment, carry some comparisons that cast light upon the tax controversy in the last congress. For instance, citizens whose incomes are less than ten thou- sand dollars pay seventy-eight per cent. of the federal income taxes, while the group with incomes from two thousand to three thousand dollars pays larger per .entage of the total tax than any other, followed closely by the group with incomes from three thousand to five thousand dollars It is interesting in this connection to note. that those whose incomes exceed a hundred thousand dol lars pay less than four per cent. of the tc al. Thus it is seen that the vigorous fight made by the Democrats in congress against making this small group the tc ficiaries of the proposed large re- d:ctions in the higher brackets under the Mellon plan, while placing the greater burden upon citizens With small incomes, was founded upon a sound principle. But for the hard fight made ley the Dem- ocrats the reverse of this situation would have been adopted.
 Another interesting aspect, as sug- gested by the figures, is the substantial increase in5 the number of persons with incomes of "a million dollars or more. [ ring the period from 1918 to 1921 tn re was decline in the number of ml ,ion-dollar incomes, This was pe- riod when profits were high, and it was contended by Secretary Mellon and lead ing adherents of his plan that the decline was caused by the practice of seeking cover under tax-free securities. Secre- tary Mellon employed the decline as an argument for large reductions in maxi mum. surtaxes. This argument is shat tered by the actual returns for 1922, which show that the number of million dollar incomes in that year was the same as in 1918. This suggests that persons who resorted to tax-exempt securities be- tween 1918 and 1921, later found it more profitable to put their accumu- lated capital into productive enterprises than to accept the low rates of interest offered by-exemption securities.
 It is admitted that tax adjustments upon more equitable basis will be nee es-ary in the early future. Scientific revision is needed to carry out the equal ization theory, which is the underlying principle of distributing the public bur uens in accordance with the ability of the people to bear them, without shak- ing the nations economic structure. Thus, information in these annual re- ports will serve, in measure, as guide in this important public service. It can- not be expected that the brief period upor which this country has been op- eratfng the income tax, period of ab- normal conditions, with abnormal ex- penditures, incomes and taxation, could afford fair test under which to estab- fish far-reaching, practical plan of dis tributing the public burdens. As more light is cast upon the situation, many inequalities may be removed, and plan established whereby more citizens may be subject to taxation. That is one of the faults of thepresent system.
 It is estimated that only six per cent. of the population, and not more than twenty-five per cent. of the heads of families, contribute directly to the sup port of the national government. The larger the percentage of direct tax-pay- CTS, even though many of them pay very small. amounts, the more equitable and evenly distributed the public burden.