The Daily Alaska empire. [volume] (Juneau, Alaska) 1926-1964, 1937-06-21
"Tax Evasion
New York Times

New York Times
Ever since March Is, when the tax returns were
considerably below what the Treasury had expected,
there has been great deal of in Washington
regarding tax avoidance" The President has finally
spoken about the matter and cited examples of it..
On all this the comment of Senator Wheeler seems
sensible If there have been evasions, he remarks,
civil suits should be brought up by the Treasury to
recover the money. If fraud has been perpetrated,
criminal prosecutions should be started. If the law
needs strengthening the Treasury should work out
specific legislation to the abuses and recon-
mend action by Congress.
Loopholes in existing tax laws should, of course,
be plugged up soon as they become evident One
enormous loophoe has been evident for years tax
exempt bonds Yet the present Administration, like
its predecessors has done nothing about it, AS for
other oopholes" it is the Treasurys function to de-
termine first whether these really unjustifiable
exemptions and second, whether rule can be drawn
to close them without placing an unjust burden on
honest taxpayers.
whether Representative Dougon is correct in assert
ing that the recent failure of tax revenues to meet
the Treasury estimates due to evasion by the big
taxpayers" No doubt there is certain percentage
Of evasion but this is not something that appears
suddenly in year. And if clere has been growth
in tax avoidance" it should be instructive to inquire
into its probable causes
is fair to ask whether of these has not been
the attitude toward the income tax of the Admins
trstion itself AS Professor r M Haig, a leading tax
authority has pointed out the income is essenti
ally self assessed" tax resting upon a detailed
declaration of the taxpayer which the Treasury can
hope to check only to a minor extent. Successful
administration requires the active assistance of the
taxpayer. When levy that is dependent upon self
assessment to be generally regarded inequ-
table its administration tends to crumbe.
| The revenue acts of recent years have inflicted
serious damage upon the income tax by numerous
notifications that do violence to the taxpayers
of fair play thus mparing his spirit of cooperation.
This is wholly apart from the question of tax rates
though when Federal income rates alone mount to
70 percent the highest brackets not counting what
have taken in addition, it is hardly surprising if tax
payers here and there to trouble to earn this
amount for the sake of turning it to the Govern
ment and if in consequence revenues decline
What we to say of the fairness of a law which
taxes capital gains but refuses to allow deductions
for capital losses? What to say of law which
refuses to allow either the individual corporation
carry forward losses deduction from the taxable
income of subsequent years? What are we to say of
corporations; which place heavy penalty taxes cor
poratons for putting aside funds into contingency re-
into productive plants instead of reckessly
paying them out in dividends?
1t is desirable to plug up loopholes in the Income
Tax Laws but it is no less desirable to re-examne
those laws and present methods of auditing tax
returns, to make that they not sometimes
calculated to transform honest into bitter OPP
ponents of the income tax