Evening star., 1933-02-05
HULL DRAF IS BILL
To END EXEMPTION
OF BONDS FROM TAX
Federal, State and Municipal
Securities Would Be A.
feCted.
TOTAL OF SUCH ISSUES
PUT AT $26,OOO,OO 900
Government Obligations Are Found
to Be Refuge of Wealth to Es-
cape Levy Burden.
BY G. GOULD LINCOLN.

Senator Cordell Hull of Tennessee,
widely mentioned as probable member
Of the Roosevelt cabinet and recently
called to Warm Springs to consult with
the President-elect on tax and tariff
matters, is preparing and will soon in
troduce in the Senate measure de-
signed to do away with the issuance Of
tax-exempt securities in this country.
Tax-exempt securities, Federal, State
and municipal, it is estimated today,
reach the stupendous total of more than
S26,000,o 100000. Other partially tax
exempt securities bring the whole up to
approximately s35,000,000,00
1t has been generally contended that
1t would require an amendment to the
Constitution to reach the end desired
by the Tennessee Senator. He plans to
make his resolution wide enough, how
ever, to cover all kinds Of tax-exempt
securities, particularly to make re-
financed Government loans subject to
taxation. Within comparatively brief
time, seven or eight billions of dollars
VI SONeIlIileuI SECUTltleS IluSI Dt IT.
financed, and it is the purpose of Sem
ator Hull to reach these new issues of
securities to take the place of the old
Furthermore, there are hundreds of
thousands Of salaried employees in the
various States today whose salaries are
free from taxation, and these, too, Sen
ator Hull believes should be taxable.
Not Policy of Roosevelt.
While Senator Hull has made no
claim that his proposal to do away with
the taX-eXempt securities Is to be q
Roosevelt policy, it is considered at
least significant that an advisor of the
Fresident-elect on tax matters should
take this matter up on the eve of the
incoming of the new administration.
Either Senator Hull, as it is now gen.
orally expected, will enter the RooSe-
welt Cabinet as Secretary Of State or
Treasury, or he will remain member
Of the Senate, influential in revenue
and tariff legislation. He has lcng been
regarded as an authority on such mat
tiers of legislation. In either case he
will be in a position to press for favor
able consideration Of his proposal to
amend the laws so one part, and very
large part, of the countrys wealth shall
be tax free and the other part shall
bear very heavy tax burdens. Senator
Hull believes that such a condition is
no longer tolerable, especially when
great wealth today is seeking the refuge
OF Government tax free securities in
order to avoid taxation. With low re-
turns, or none, from many Of the in
dustrial and other private securities,
wealth is receiving a comparatively
large income from these Government
securities and also has the benefit of
security in the Government bonds, with
the whole credit of the Nation back
CT them. If the Federal income taxes
applied today to the vast total of tax
exempt securities in this country, it
would be possible to balance the Gov
ernment's budget with comparatively
little. if any, additional taxation upon
the wealth Of the country now taxed.
Probably through strict Government
economy no increased taxes would be
needed at all to balance the budget.
This may be one of the reasons which
will lead the Roosevelt administration
to sponsor the taxation of all securities.
Various estimates of the total amount
Continued on Page 3. Column A.