Evening star., 1937-05-30
Tax Evaders.


the yacht owning type mentioned by
President Roosevelt, arouse little SYM
pathy. Every tax evasion successfully
carried out means eventually heavier
tax burden on the rest OF the people.
When the Federal Government is spend
ing far more than it is obtaining in
revenue, it Is clear that every dollar
which the tax evader holds out must be
made up from some other source of reve-
nue., from some other taxpayer, or from
them all.
The President has launched a drive
against the wealthy tax evader, calling
their practices unethical and immoral.
There Is, of course, the remedy, ever at
the hand of Government, of civil and
criminal suits against the evaders, If
wrong has been done. The President,
however wishes the tax laws amended
and he has hinted that there may be
congressional investigation that will show
up the tax dodgers and bring their names
before the public.
demonstrated in other congressional
hearings, and plug the loophole' laws
have been passed before. The ingenuity
OF men-and their attorneys-who do not
wish to have their money taken by the
Government is reported by the Presl-
dent to be on the increase. Whether
they have the rather human aversion to
taxes or whether they do not like to
have their money taken from them to be
expended by the Government for things
Of which they do not approve is inma-
terial. The case of the yacht owner.
presented by the President as typical, is
ingenious If unethical. The yacht was
incorporated, and the owner credited his
floating corporation with about So, ,0DO, 900
In securities. The salaries, wages and
running expenses of the yacht corpora
ton, not to mention the depreciation,
were paid out of the income from the
securities. The yacht corporation, how
ever, operated at a loss to the owner.
It merely cost money instead OF bringing
in an income. The losses were charged
off and the owner saved himself about
$4,000 year In taxes.
1t Is the Presidents contention that
the method of incorporation, whether of
yachts or large estates or personal hold
Ing corporations, has been used to pre-
vent large tax payments to the Govern
ment. Such evasions are clearly un-
ethical and immoral although they may
have been carried out within the law.
They are the kind of evasions that are
possible only to the wealthy. Repre-
sentative Doughton, chairman of the
House Ways and Means Committee, has
gone so far as to say that the Govern
ment this year will lose $400, 100000 in
revenue because Of these tax evasions.
This may be only guess on the part Of
Mr.. Doughton and 1t is guess that may
be Influenced by the failure of the
present taxes to yield their estimated
returns. There seems no doubt, however,
that the loopholes should be plugged.
The income tax laws are favored be-
best able to pay. There is, however, q
measure Of reason and justice which
should govern even In the imposition Of
income taxes. Any tax that becomes
conf1scatory goes beyond reason and JUS
tice. The idea of many of those who are
urging the expenditure OF great sums of
money by the Government is that this
money should be taken almost entirely
from the wealthy persons in this country.
When it is recalled that In 1885 only
484,000 men and women reported in
comes of $4,000 year and over, and that
the vast number Of these did not run up
to s5o,o0o, there may be reasonable doubt
that there Is enough concentrated wealth,
In the hands of individuals, to take care
Of the proposed expenditures.
No one sympathizes with the tax
evader. On the other hand, there are
great many persons In this country who
do not sympathize with Government ex-
penditure which goes beyond the In
come of the Government. There are
many who believe that waste and ex-
travagance in Government expenditure
Is far greater than the amount OF tax
evasion. If the budget is to be balanced,
Is 1t is devoutly hoped it will be, the
pressure should be directed against this
wasteful and unnecessary expenditure as
well as toward making all the potential
taxpayers toe the mark.