| OCR Text |
Show National Topics Interpreted T by William Bruckarf tM National Press Building Washington, P. C. xgSjjSwifll ' Washington. As it becomes more painfully apparent that there is no basis upon which Seek New to expect present Tax Sources returns of federal taxation to produce pro-duce sufficient funds to maintain the administration's rate of spending, the President and the Treasury are peeping into every corner for new sources of money. They have already al-ready recommended to congress that the present nuisance taxes be re-enacted to bring In some five hundred million a year and they are casting their eyes elsewhere for other tax receipts. In addition, and as a part of the general pinch that the Treasury now feels, Mr. Roosevelt has asked congress con-gress to revise certain provisions of income tax law to close up loopholes loop-holes and prevent escape from taxation. taxa-tion. The President's message to congress on this point was quite bitter bit-ter and, many observers thought, rather unfair but, nevertheless, he told congress that it was up to the legislative branch to see that there was no tax avoidance. The President's message dealt with an alleged moral phase of tax avoidance and that part of his mes-lage mes-lage has provoked much criticism of the Chief Executive's attitude. H sought In his statement to the congress to make It appear that many wealthy persons had avoided taxes and that, by so doing, they had sinned. Now, the President's view is entitled en-titled to consideration and his charge that there Is tax avoidance is correct. Indeed, I believe no one can successfully dispute the charge that thera is tax avoidance of a wholesale character in the United States. But when the matter is placed in the category of a moral issue, it must be examined In a different light. The President did not talk about tax evasion in his message; he talked about tax avoidance. avoid-ance. Tax evasion Is illegal and immoral. Tax avoidance is purely and simply the arrangement by an individual so that he pays the lowest low-est tax he can and still complies with the law. I am inclined to side with those in congress who have criticized the President on the attitude he assumed. as-sumed. As long as congress tells an individual, through the language of a law, that he must pay so much tax and prescribes the conditions, if that individual complies with that direction of congress, he does not commit a crime when he pays only that much tax. I am constrained to support my view in this instance with the language lan-guage of the late Mr. Justice Oliver Wsndell Holmes who, as a member of the Supreme court of the United States, gained probably as much respect as any man who ever sat on the highest bench. Mr. Justice Holmes said in a decision of the court 21 years ago and now strangely strange-ly apropos the following words: "We do not speak of evasion, because, be-cause, when the law draws a line, a case is on one side of it or on the other, and if on the safe side it is none the worse legally that a person per-son has availed himself to the full of what the law permits. When an act is condemned as an evasion, what is meant is that it is on the wrong side of the line indicated by the policy, if not by the mere letter, of the law." Again and again, courts have held that a citizen may employ "any legal le-gal means" available to him to diminish di-minish the tax which he must pay. It would seem. then that Mr. Roosevelt's Roose-velt's message used rather ill chosen cho-sen and ill advised language when, in dealing with questions of tax avoidance, he sought to make it appear ap-pear that it was wrong for a citizen to try to save his own money. It has been rather interesting to note the type of outbursts, editorial and verbal, that Message has come as a re-Causes re-Causes Stir suit of Mr. Roosevelt's Roose-velt's tax message. mes-sage. These outbursts have continued contin-ued partly because the President asked congress to make an investigation investi-gation of tax avoidance where some very large taxpayers are involved. Of course, congress is going to do that because it U give congress, or at least certain individual members, mem-bers, an opportunity for publicity. And they do not overlook opportunities opportu-nities for publicity. Since the discussion of tax questions ques-tions has continued on the basis of the projected investigation, it has givsn plenty of writers an opportunity opportu-nity to express their opinion in detail. de-tail. Many of these critics have become be-come quite personal in their assault upon Mr. Roosevelt and their biting observations are doing him no good politically at all. In fact, I have heard some rumblings beneath the surface to the effect that his tax message has hurt him as much politically po-litically as his proposal to add six new justices of his own choosing to the Supreme court of the United States. Probably the worst of these criticisms criti-cisms appeared in the Washington Evening Star, a newspaper that seldom sel-dom takes a bitter stand on any question. Usually, its position is confined to the presentation of both ides of the argument. But It was different as regards the tax message. mes-sage. The Evening Star called attention to regulations of the bureau of internal in-ternal revenue which prescribed that a person must count as Income anything taken in payment of services, serv-ices, whether that thing be money or some other thing of value. It cited the fact that the President occupies oc-cupies the White House without payment pay-ment of rent and that he has available avail-able a large staff of servants who man that institution; that he is provided pro-vided with automobiles and yachts and various other services and circumstances cir-cumstances without cost. Editorially, Editorial-ly, the newspaper then goes on: "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 gov-ernment which pays him his salary? sal-ary? Under these regulations it would appear that even the automobiles auto-mobiles and the yachts provided by the government should be considered con-sidered In making out an income tax return. There is no publication of income taxes and therefore the public pub-lic Is not Informed as to whether the high officials of the government who are provided with residences, as some are, or with automobiles, 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 a public official Is not part of his pay. Cabinet officers, for example, are not provided with residences by the government. They must provide residences themselves, them-selves, at considerable cost It is obvious, therefore, that a residence given a government official is part of his pay." When the President proposed the tax investigation, he said that he be-lieved be-lieved there were Pick on a good many mil-Big' mil-Big' Ones lions ot dollars that could be forced into the federal treasury as a result of such Inquiry. His action ac-tion followed sweeping orders issued to Internal revenue agents and auditors au-ditors to review every income tax return with the utmost care. The agents and auditors, of course, will go over the returns filed by the entire en-tire list of income tax payers, little as well as big, but the congressional investigation will be devoted only to some of the men called by Mr. Roosevelt, "economic royalists." It is obvious that congress cannot go into all returns so congress will pick on the big ones because those men will have names out of which good headlines in newspapers can be written. The Treasury had a different idea about the investigation which congress con-gress undertook at the President's request. The Treasury's plan contemplated con-templated a number of secret hearings, hear-ings, star chamber sessions, and I believe everyone knows what can be had in a star chamber session with bureaucrats operating with all of the powers they possess in our government. Word of the Treasury's ideas did not please congressional leaders and they very quickly put their foot down on the scheme. Of course, members of the house and senate figured they would not share in the political benefits unless they did the investigating. I hear much comment com-ment to the effect however, that an investigation in the manner congress con-gress had decided to make it ii much preferable to the star chamber cham-ber proceedings which the Treasury proposed. I mentioned that the congressional congression-al committee is dealing only with "big names." The reason for this is plain. It would do no good at all in a publicity way for the congressional congres-sional groups to call In some small taxpayer who, by availing himself of the privileges of the law, had been able to reduce his total tax to a comparatively few dollars. On the other hand, if a big business man, an economic royalist, claims all of the exemptions and deductions that the law specifies and thereby cuts down his tax, he becomes the subject sub-ject or the target for much ballyhoo bally-hoo about tax avoidance. I do not see the difference. Since the President finds himself in a deadlock with congress on his n-t t r Proposal to add f lies Work Bx justices of his on Congress own choosing to the Supreme court of the United Slates, he has turned to a new approach In dealing with the legislative situation. He has suddenly loaded congress down with work. This Is to be distinguished from the course he has followed in the earlier years of his tenure when he submitted only one legislative suggestion at a time. Now, in addition to the court reorganization re-organization proposal, there is before be-fore congress the far-reaching governmental gov-ernmental reorganization plan, the billion dollar slum clearance and house building, farm tenancy bill and a highly controversial piece of legislation proposing to establish minimum wages and maximum hours for labor. These are, in addition, addi-tion, of course, to the tax revision proposition I have discussed above and the annual appropriation bill with the billion and a half relief fund measure. Western Newipapvr Union. I |
