Evening star., 1937-06-19

S.aoe" 'Aie Ell.
law. There may NJ. I.
be plenty of justi- ~ -" '"'e'
f1cation for the person who avoids the
tax laws. AS a matter Of fact, there
may some day be logic on the side OF
the citizens Of the District of Colum-
bia, Tor instance, if they even go so far
as to refuse to obey the tax laws i'm
posed upon them.
Our forefathers dumped a lot q tea
In Massachusetts Bay and refused to
pay stamp tax because they said
taxation without representation is
tyranny" Today the Congress OF the
United States is about to impose a
vicious tax system on the people Of the
city OF Washington and this, too, with
out granting the people of the National
Capital the right to vote for members
Of Congress through whom their views
could be expressed directly on the
floors Of both houses of Congress. If
ever there was justification for tax
avoidance, it is to be found right
here at the seat of government.
Due for Disillusionment.
But there are citizens outside the
National Capital who also may feel
aggrieved as they learn more and more
about the unfairness of the taxation
policies of the national administra-
tion. Any administration which
bluntly refuses even to listen to the
pleas of hardship growing out OF in
equitable and unfair tax laws and
merely shrugs its shoulders. so to
speak, and says, "Oh. well, We need
the revenue is due for disilluSion-
ment and awakening some day.
Take the case Of the undistributed
surplus taxes one of the most unfair
and destructive tax levies ever intro
duced. Small businesses are rapidly
being broken down by it while strong
monopolies reap the benefit. Protest
after protest has come to Washington,
but influential members of the Con-
gressional Finance Committees say
indifferently, But the Government
needs the revenue"
-Paraphrased this means: I'VE, the
national administration, exercise the
right to do as We please to the citizen,
even to the extent of running his bust
ness, and, while the law may work
hardship, we need the money for boom
doggling just the same"
Under such circumstances, the citi-
zen says to himself: The Government
Is unfair-Ill beat the game if 1 can"
Members Of Congress and of the
executive branch of the Government
who lately have been criticizing the
citizenry for alleged lack of morality
and defects in patriotism because of
tax avoidance know in their hearts
that this is the sheerest hypocrisy
and that there isn't single man in
side the Government who doesn't take
all the deductions the law allows or
doesn't contrive to get the better Of
the tax collecor by legal means.
1neQuities Are Numerous.
The tax inequities as well as in
iaulties are numerous. They are well
known to all who have studied the tax
rulings Of the Government under this
and past administrations. The theory
has been that the taxpayer is always
wrong and that the Government is al
ways right. The king -can-do-no-
wrong idea has nowhere been more
slavishly worshiped than in the Treas
ury Department in applying the in
come tax laws. Equity is an unknown
virtue and assess the taxpayer be-
cause we need the revenue is now the
rule rather than the exception.
Another serious practice is the way
the precedents have been built up and
the refusal Of Congress or the Bureau
OF Internal Revenue to reverse them
selves when mistake has been clearly
demonstrated. Take, for instance, the
question Of business deductions In
terest on loan at the bank is de-
ductible as a business expense But If
the bank demands that key executive
or inventor or some one who is an
asset to the business should have his
life insured to protect the loan so that
the bank might be reimbursed if
valuable personal asset is suddenly
lost by accident, the business must
take out such a policy and bear the
expense. Yet the Treasury doesn't al
low this as deduction for income tax
purposes. 1t happens to be part of
the cost Of carrying the loan. but for
years the Treasury has refused to
recognize the simple equity behind
such claim for deduction.
Countless examples of this kind Of
loose thinking may be cited. Con-
gress, for instance, is chiefly RESPONSE
bic for an unwillingness to treat a
human being, with limited earning
power, As different from business
or manufacturing concern, which may
take depreciation on its plant and
equipment As business expense.
Brains Vs Coupons.
Thus Margaret Mitchell, who wrote
"Gone With, the Wind" had a lucky
break when she amassed a nice sum
out OF royalties, but if she acquired
$500, 900, she would have to give half
Of it to the Government In taxes.
She DOESN'T turn out best sellers every
year like factory does automobiles.
Yet thu Government regards her in
come IS something to be penalized,
while the manufacturer takes depre-
ciationfas m expense on his plant or
equipment. The mental equipment
OF. ths human being with earning
powers to be sure, may diminish OF
may be curtailed by illness or DEATH
but the earned income is taxed virtual
" the same as the unearned income
which, comes out Of clipping coupons
Of Inherited wealth.
Mr.. Roosevelt, for instance, inher-
tied substantial income. He didn't
have to work for 1t as did other men
In America, but the self-made men
who rose out Of the slumps by dint
at bard work must give the Govern
nent virtually the same amount OF
taxes on their earnings as do the
. coupon clippers. There is. of courA
. small credit on the present tt,