The Omaha morning bee., 1924-01-03
Snoot Tax:
Bill Aims at
Farm Relief
Amendment Proposal Would
Place Levy on Exempt
Bonds, Affecting Wealthy
Holders of Securities.
Measure in Committee
BY MARK SULLIVAN.

congress 1tfpllAbilt9 TIE HloSi lVh
tax reduction will be rounded out by
A move on the part of Senator Smoot
- Utah to get out of the judiciary
committee the resolution for a con-
stitutional amendment making own
ers of state, municipal and county
bonds subject to income tax the same
as the owners of most liberty bonds
and all bonds of corporations. as well
as mortgages on farms and build
ings.
This resolution passed the house
last session by vote of 223 to 1Ol,
being five more than the necessary
two.thirds. 1t was introduced in the
last session of the senate, but for
lack of time. did not come to vote.
When the senate reconvened just
before the holidays, Senator Smoot
reintroduced it, and his next move,
within a few days, will bring it to the
front as a rounding out of the pres
ent attempt at tax revision.
In the writer's judgment this
amendment holds out the only prom
Use of real relief for farmers, small
ers in the entire pending effort at
tax revision. Except to speed this
amendment. there is nothing sub
stantial that congress can do, or Mr..
Mellon can do, or the federal govern
ment can do In this field for the
farmer and small business man.
Farmer Unable to Pay.
This is strong assertion but it
Is within reason. The federal gov
ernment cannot lift taxes from the
farmer because the federal govern
ment Is not collecting any taxes from
the average farmer. If Senator Mag
nus johnson, with a. wife and four
children and 200 acres of land Is an
average farmer. then he does not
aay any federal income tax on his
firm incomes unless the net income of
UDBhat farm, after deducting all ex-
penses, is $4,000.
And il Magnus Johnson's expert
ence with his 200-acre farm is typi-
cal of the average farmer, his net in
come last year did not reach $500
or anything like 1t. for the average
farmer last year certainly did not
make $500 net.
So Magnus johnson as a. senator
cannot reduce his iown income tax as
a farmer, and nothing congress can
do can reduce it, because, on the as
sumption that his farm is typical. he
has not enough income from his farm
to pay any income tax on it,
h I<re. To- I'll,
he is an average farmer. is suffering
from taxes. Gov. Charles w. Bryan
of Nebraska has farm of 100 acres
on which his taxes in one recent
were S496, or over 81 an acre. The
farmer everywhere Is suffering from
taxes. Farmers in some states are
being forced into bankruptcy by taxes.
Not Federal Taxes.
But these taxes are not federal
taxes. They are local state, county
and district taxes, collected largely to
pay interest on state, county and dis
trict bonds. These bonds are being
issued in enormous an drapidly IN
creasing quantities. Something like
50 900, 900, 900 of them were issued In
1922.
The total amount of them is now
close to s12, 900, 100000 The principal
reason for the enormous issue of
these bonds is that there Is AN i'm
mense demand for them. The de-
mand comes from rich men and from
2nkers who cater to rich men. The
rAzs rich men want them is that
the federal government does not tax
the income from them.
A man with one or two or 10 of
hundred million dollars can put all his
money In these state. county and city
bonds, and thereafter need pay no in
come tax whatever. 1t is to reach
these men, and to be able to tax the
income from these bonds the same
as In the case of ordinary bonds and
farm mortgages, that the constitu-
tional amendment Is proposed.
That constitutes the only direct In
terest the average farmer has or can
have in the pending tax situation as
means of reducing his own taxes.
One other strong assertion can he
made safely. The writer does not
know Secretary Melons mind, but
does not hesitate to assume that II
this amendment were passed and in
effect, and IL these state and local
bonds now tax-exempt were taxed.
then in that event Mr.. Mellon would
not feel obligated to reduce the sur.
taxes on the rich as much as he
now proposes, and all this fight about
large surtaxes would not be going
on.
The chief reason Mr.. Mellon wants
TO reduce the surtaxes on the rich
lies In the fact that most of the rich
now put all their money into the
tax.exempt state and city bonds. and
Mr.. Mellon wants, by reducing their
surtax rates, to coax them TO put at
least some OF their money in the
bonds, mortgages. and securities Of
ordinary business. where Mr. Mellon,
as tax collector, can get at them and
collect at least little tax from, them.
Oshkosh Pioneer Dies.
Oshkosh, Neb.. Jan. ASA Rems
berg, 20. who came TO this part OF