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Show - .. TAX-EXEMPTION IS UNDER-MIXING UNDER-MIXING THE INDUSTRIES Congressmen who threaten to per-rent per-rent the adoption of President Harding Hard-ing and Secretary Mellon's . recommendation recom-mendation of a constitutional amendment amend-ment to prohibit the further issuance issu-ance of tax-oxempt securities . will doubtless pretend some of them In honest ignorance that they are taking tak-ing tho popular side of the Question. Tax-exempt' securities are today th their jUBt dues to the public treas-one treas-one chief means of tax-escape e-joyed e-joyed by the ultra rich, and they are taking full advantage of it to avoid ury', which must be made up by added ad-ded taxation onbalance of public. The situation as described by Mr. Mellon is that "under our system of graduated federal income surtax the Issuance of tax-exempt securities whila of diminishing advantages to the borrowing state or city provides a perfect refuge for wealthy investors, inves-tors, being most valuable to the wealthiest taxpayer. -The actual figures show that to the taxpayers paying surtaxes in the. brackets securities secu-rities subject to federal Income Bur-taxes Bur-taxes should have to yield about 10.-4'per 10.-4'per cent in order to be as attractive as a fire per cent tax-exempt security." secur-ity." In other words (since entirely safe '0.4. per cent Investment securities are scarcer than hen's toethl vast 'um of money are being Invest d In 5 per cent tax-exempt securities. If i advantago of tax-exemption were bolished this money would find Its war Into ordinary business invost-T'snta. invost-T'snta. It is Mr. Mellon's Judgment kt the withdrawal of o much money from business Inveetment 'uds to undermine ths development of Industry. That Is a more serious ffect than the government's annual 'oss of revenue amounting- to $300.- oo,oo. |