The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1931-09-25
HITS TAX EXEMPT
SECURITIES HARD
CONGRESSMAN HAROLD KNIT
SON MAKES STATEMENT TO THE
PRESS ON VITAL MATTERS RE-
LATINO TO
EXEMPT SECURITIES.

PRESS ON VITAL MATTERS RE-
LATINO TO PROFESSIONALLY
EXEMPT SECURITIES.
1.-The enormous deficit of 900 million
dollars incurred by our government
during the fiscal year ending June 80,
with the probability of further large
increase in the deficit for the present
fiscal year, makes it imperative that
the new congress take steps to balance
the budget. This should be done
through sharp reduction in the op-
Grating expenses of the government, a
further increase in the higher brackets
of the income tax and in the enactment
of a gift tax law, which would prevent
the distribution of huge estates before
the death by the donor to avoid pay
ment of the federal inheritance tax"
says Congressman Harold Knutson of
Minnesota in signed statement to the
press.
I'm view of the fact that the deficit
for the current year will approximate
1900 million dollars it is plain to be
seen that additional source of income
will have to be provided.
Advocates of the existing pro-
hibition laws appear to be in sufficient
force in the next congress to prevent
the repeal or modification of that
legislation In approaching this ques-
ton from any angle this situation must
be recognized, and while it is generally
conceded that the repeal or modifi-
cation of the Volstead Act would prob
ably yield a sum approximately as
large as the deficit, yet, we might as
well face the fact that the drys are
sufficiently strong to prevent such
action. In such a situation there ap-
pears to be no alternative at the
present time for the remedy I have
suggested.
1.-The present federal income tax law
does not place the tax burden upon
those best able to bear it and therein
lies its weakness. There is no reason
why the law should not be so changed
as to compel those whose incomes run
into the hundreds of thousands and
even millions to bear their just portion
of the load. Under present conditions
there is no excuse for dead line be-
yond which point incomes are taxed
on flat rate basis. Under the present
system it is inevitable that the wealth
of the country will ultimately become
centralized in the hands of a COM
paratively small number who enjoy tax
exemptions which place them in a pre-
ferred class. The setup is archaic and
undemocratic.
''The proposal of Senator Reed of
Pennsylvania that sales tax of one
half of one percent be imposed would
place the bulk of the tax burden upon
the masses who are least able to bear
the burden. The great bulk of the
taxes should be paid by those who de-
rive the greatest financial benefits
from our form of government and I
predict that the Reed proposal will not
receive enough votes to wad shotgun.
''The proposal of Senator Watson
that we issue short term certificates of
Indebtedness will meet with little or
no favor among those of us who be-
lieve in pay-as-we-go policy. Sena-
tor WatSon's plan would merely post
pone the day of reckoning and in
cidentally increase our interest burden
II have carefully studied the pro-
posals of Representative Bacharach
and in the main am in accord with
what he proposes. His analysis of the
situation now existing is fair and COM
plete and I am looking to see the new
congress enact legislation along the
lines laid down by him week ago.
1.-THE time has come to do away with
tax free securities which provide a
haven of refuge for the tax dodger
Incidently, such action would release
large sums for investment in produc-
tive fields where activities are at
present badly handicapped for lack of
necessary capital with which to carry
on. This was demonstrated very
forcibly when the recent government
bond issue was over subscribed several
times.
"All this talk about killing the goose
that lays the golden egg is sheer nom
sense and is being INDUCED in purely
for the purpose of preventing the pas
sage of legislation that will ultimately
give us wider distribution of wealth
and more equitable distribution of
taxes.
"All fair minded individuals must
admit that there is something wrong
with a tax system which permits of the
accumulation of fortunes that run in
to the tens and even hundreds of mil
lions in one short life time.
"All fair minded individuals must
concede the necessity for a change in
law which permits the investment of
large fortunes in tax free securities
where much of the money could and
should be used in industry which is
sorely in need of working capital at
the present time. This is one of the
major causes of cur unemployment
problem.
This is neither socialism nor COM
munism. It is merely good horse sense
and it has taken the present de-
preston to bring to our attention the
necessity for doing what Mr.. Bacharach
now suggests. Upon the imposition of
equitable surtax rates and substantial
increase in federal estate tax rates it
will only be question of time until
we secure redistribution of much of
the wealth of the country which is now
centralized in few hands and is
largely invested in tax exempt securi-
ties"
Mr. and Mrs Zinc KoIrt of EoveItJ,