Evening star., 1937-06-09
A Moral Question?

otherwise why citizen of the United
States must so arrange his affairs that
the highest amount Of taxes may be
collected and paid into the Treasury?
Or conversely, is there any reason why
he should not so arrange his affairs
that he should pay the lowest tax
under the law? This is tax avoidance
not evasion-and it has been recognized
as entirely legal by the courts for many
years. In 1915 the late Mr.. Justice
Holmes of the Supreme Court of the
United States handed down an opinion
in the case of Bullen VS.. Wisconsin, in
which he said:
1--WE do not speak of evasion because,
when the law draws line, case is on
one side of it or the other and II on
the safe side it is none the worse legally
that a person has availed himself to
the full Of what the law permits. When
an act is condemned as an evasion,
what is meant is that 1t is on the
wrong side Of the line indicated by the
policy, if not by the mere letter of the
law"
Again and again the courts have held
that citizen may resort to "any legal
methods available to him to diminish
the amount of his tax liability. In the
case of the Iowa Bridge Company vs.
Commissioner it was held by the court
that even though the transaction is a
device to avoid the burden of taxation
or to lessen that burden, it is not for
that reason alone illegal"
moral question is certainly involved
If citizen conceals his income in order
to evade the payment of taxes imposed
by law. But if a citizen discloses his
income and at the same time so ar
ranges his affairs that under the law
certain exemptions from the tax are per-
mitted there is very different situa-
ton. There is no legal reason why he
should put his business or his affairs
generally into such shape that he will
be compelled to turn over to the Treas
ury the maximum tax.
Congress, in it's tax laws, has worked
a number of injustices. The citizen,
however, is compelled by law to submit
to these injustices. If the citizen, on the
other hand, takes advantage Of the law
to pay no more taxes than the law de-
mands, is he subject to criticism? How
many citizens, out of pure patriotism,
insist upon paying the maximum taxes
that may be imposed upon them? If
such is the expected attitude, consider
the regulations under the tax law OF
1886. Article % (a) CD Of regulation 49,
relating to the income tax, contains the
provision that IF person receives as
income for services rendered a salary
and in addition thereto living quarters,
the value to such person of the quarters
tax" This provision supplements
another in the same regulation which
says: If services are paid for with
something other than money, the fair
market value of the thing taken in pay
ment Is the amount to be included as
income"
Has the President Of the United
States, unwittingly, failed to include in
his income tax the value to him Of the
residence provided by the Government,
which pays him bis salary? Under these
regulations it would appear that even the
automobiles and the yachts provided by
the Government should be considered
in making out an income tax return.
There is no publication of income taxes
and therefore the public is not informed
as to whether the high officials of the
Government who are provided with res
licences, as some are, or with automo-
biles, as many Of them are, take these
things into consideration in reporting
their income taxes. It would scarcely
be an argument to say that residence
provided for public official is not part
Of his pay. Cabinet officers for example,
are not provided with residences by the
Government. They must provide resi-
dences themselves, at considerable cost.
1t is obvious, therefore, that residence
given Government official is part Of
his pay.