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Show Sob Stories in Tax Exempts By Preston Grover 1 WASHINGTON, Back of the administration's demand for elimination of tax-exempt securities secur-ities is a lot more than a mere effort to make life tough for economic eco-nomic royalists. Yeara ago when the government govern-ment debt atate and federal-amounted federal-amounted to only a few billion dollars, the tax-exemption privilege privi-lege wss not a really serious matter. mat-ter. But now that this publio debt haa reached a total of $65.-000.000.000 $65.-000.000.000 (treasury estimate), it is something else again. Aa the treasury see it: ' 1. Billions of private capital which might otherwise hunt a place- for private investment now can hide safely and profitably profit-ably in untaxed government securities. se-curities. 1 Ths federal government loses much real revenue. If the aame money were invested In private bonds, much of ths Income In-come would yield high surtaxes. If compelled to seek a private apot for investment, this capital capi-tal would create new industry and thus reduce the relief load. Plenty of Arguments There are arguments against repealing the exemption, and tbe aenate finance committee already has arranged to hear them soon. The government'a case largely I this: Right whan Usee is a real seed ' for enterprising business men to use their wealth to start new industry, in-dustry, ths wealth instead haa been ahoved into the taxless safety safe-ty of government bonds. But business men argue that it Is mighty lucky th money waa ready for investment in government govern-ment bonds when the depression hit How could the relief billions bil-lions hav been raised otherwise? other-wise? Also, these business Investors argift. It Is not a bad idea to have considerable inveetmeht capital confidently resting in govsrnment securities. Unliks private securities, these government govern-ment securities will not suddenly be dumped on a panicky market when a depression comes. Stats officials also are protesting protest-ing any change. They will have to pay Increased interest rates on new issues of state bonds to offset off-set ths federal, taxes. The treasury treas-ury agrees that la so. Ths federal fed-eral interest rates also will climb. The treasury, however, claims the states will get at least part of the money back by taxing income from federal bonds. Tbey can't now." Menace State Sovereignty The states further protest that federal taxation of Income from stats bond will menace atate sovereignty. ("Ths power to tax is the power to destroy" aa assertion as-sertion which some deny.) The treasury's answer is that such a states-rightist a Senator Glass ' of Virginia urged elimination of the exemption when he waa secretary sec-retary of the treasury. Ths treasury has calculated that only people In high income brackets can profit from tax exemption of bond income. It fig-urea fig-urea that a man with a net income in-come of $500,000 a year can earn more money Jrom government ' aecurities paying 3 per cent than he can from taxable private securities se-curities paying 10 per cent. The difference is taken by the 00 to 70 per cent rates in ths upper tax ranges. Ths turnover will not bs abrupt ab-rupt Only new issues will lose ths exemption. Industrialists' questions as to why they should risk thsir monsy if ths govsrnment takes most of thsir earnings have reached important im-portant ear in Washington, whsre more heed Is paid these past few weeks to the need of encouraging big aa wall aa little business msa to start Job-making enterprises. Copyright 1S, for The Telegram - There are more than 8500 Islands Is-lands in the British Isles; 5000 of these are situatsd around Ireland. Ire-land. . If they have more than 25 guests for dinnsr, an old law requires re-quires Loa Angeles residents to obtain a picnle permit - |
