Evening star., 1937-06-09

APpCfHt"Sty lOH
President first asked that econ
omy be practtced in departmental
expenditures. Later he blamed rep
enue shortages on Diltul epasions
BY Weolthy teD. asked inquiry BY
Treasury Department and legisla-
ton By Congress to plug loopholes.
Ey the Associated Press.
Treasury officials said today States
would have to join the Federal Gov
ernment IN reciprocal tax program
II millions in revenue now lost through
exemptions are to be channeled into
public treasures
President Roosevelt told his press
conference he always had favored re-
moving income tax exemptions which
are granted Federal and State en-
ployes. He said he believed income
from securities now exempt should be
taxed
Two other developments helped
make taxation major topic of Cap
ttal discussiOn:
|. The House approved a resolution
for an inquiry into tax lodging, but
voted to restrict publicity The Sen
ate must agree to the limitations or
seek a compromise.
2. United States Chamber of Com
merce officials predicted business
spokesmen would seek modification OF
the new undistributed profits tax
White House officials said the House
proposal to restrict tax-dodging pub
licity would be acceptable to Presi-
dent Roosevelt.
1t was said that while the President
would take no sides in the Senate
House controversy over publicity, the
resolution would meet no objection
from him.
The President, discussing the re-
moval of exemptions, said a constitu-
tional amendment probably would be
necessary. The States might ratify
1t and they might not. he added.
Cooperation Held Necessary.
Treasury officials reported the Gov
ernment could make its future security
issues taxable simply by enactment OF
a law. They added, however, that
unless all States and political sub
divisions took similar action interest
rates on Federal obligations would rise
to exorbitant levels.
Commerce Department figures
showed about S58 600 100000 of exempt
or partially exempt securities are out
standing. If these yielded an average
of 4 per cent, removal of all present
exemptions would subject about ST.
S20,000000 to income taxation.
Less revenue would be realized
Treasury officials said. from removal
Of tax exemptions on State and Fed
eral employees because most of then,
tax rates prevail. One authority esti-
mated receipts from that source al
less than Sl00000,000.
Federal employees now pay only
Federal income taxes and State en-
ployes pay only State taxes)
If any action is taken on removin,
these exemptions, informed person
said, it probably will not develop unit
the tax-dodging inquiry is completed
Publicity o. X. Necessary.
The House resolution, passed with.
out a record vote, would require tht
special committee Of six Senators anc
six Representatives to give approval be.
fore confidential information on ia,
returns could he made public.
Almost unrestricted authority t
publish income tax returns was votec
by the Senate last week after President
Roosevelt condemned tax evasion ane
avoidance. The two versions must b.
reconciled before the inquiry can start
Tho House debate yesterday included
frequent reference to J. P. Morgan.
statement that taxation was a lega
and not moral question.
Representative Boileau, Progressive
of Wisconsin, said he agreed, although
he added it was unusual for him to b.
supporting the financier.
Representative Harlan, Democrat. Of
Ohio asked: How can you avoid
feeling OF loathing. feeling of resent
ment and detestaton when you reat
his (Morgan's) statement?"
Here it is," he (Harlan) said:
"'You do only what you are com.
PEELED to do by law"
This is the greatest financier ir
the United States talking.
That sentiment, Mr.. Speaker, i.
rugged individualism in the raw. L
Is the directing sentiment of the con.
f1dence man, the cheat, the exploiter
He owes nothing to society, or human
decency. He takes generously of tht
blessings Of civilization, but only con.
tributes what Is taken from him by
law.
1T is just as true now as of old
the defense of sin is the law"
Legal View Supported.
Boileau asserted he thought "ther,
Is good deal that can be said il
behalf of the position that the amour
OF taxes due to be paid is a lega
question rather than a moral ques
ton
If we permit loopholes to exist il
our laws" he said, we cannot absolv
ourselves from blame by trying to plac
the blame upon some one else for max
ing use Of them"
Also referring to the moral question
Representative Treadway, Republican
OF Massachusetts, asked: "If it is i'm