Hearings

The Ways and Means Committee of the House, preparing the revenue bill of 1926--that is, making ready for tax reduction--last week got into the doldrums. Much of its time was taken up in hearing every Tom, Dick and Taxpayer who was anxious to have the tax that fell on him abolished. There were also experts and officials on hand, but the matters with which they dealt were largely technical details.

Excise Taxes. Groups from several industries asked for abolition of the taxes on the things which they produced--automobiles, f i r e a r ms, cameras, jewelry, etc. The taxicab drivers wanted their $10 tax abolished; the motorboat and yacht builders wanted the tax on motorboat users removed.

Tax Appeals Board. Several witnesses praised the Board of Tax Appeals in high terms, for its fairness, for its efficiency. There was discussion of increasing its powers and of means to expedite its work. Taxes of $134,000,000 have come before it for settlement and it has disposed of $60,000,000 of that amount. Gradually it is building up a body of precedent which should simplify future work. But the members of the Board complained that they are hampered by lack of funds. The Budget Bureau has cut $54,000 from their request for a deficiency appropriation for this year, and $190,000 from their request for next year's appropriation.

Professor Thomas F. Adams, now of Yale, formerly of Wisconsin, who acted as advisor to the Democrats in drawing up the first income tax law and took part in framing a similar law for Wisconsin, came before the Committee with a number of suggestions at least one of which appeared to "catch." He suggested an unpaid board of tax experts to study equalization of tax schedules and to simplify them so that anyone can understand them. Both his Republican and his Democratic hearers appeared to like this idea. He said Secretary Mellon was "eternally right" in saying that lower surtaxes would yield more revenue. He wanted much lower inheritance taxes--say, 15% instead of 40% maximum--but did not think they should be abolished. He wanted a board created to clear up ancient tax cases from 1916 and 1917 "with an axe if need be." He wanted salaries of $10,000 a year and a long term of office for officials who had to make important tax case decisions--to dignify their office. He suggested a short cut: that, in place of the multitude of present exemptions, taxes be on gross income with an arbitrary deduction of 20% or 25%.

Both Professor Adams and Professor Edwin R. A. Seligman of Columbia University agreed that it was wise to pay off the public debt as rapidly as possible and not spread it out over 62 years hoping that foreign debt payments will extinguish it, for there is no assurance that foreign nations will continue to pay for that long.

William A. Brady was one of the most picturesque arguers before the Committee. This theatrical producer came to protest against the admissions tax on the legitimate drama. Said he:

"I am one of the oldest legitimate theatrical producers in the country. . . . This tax is one of the things that practically make spoken drama extinct. I think I know more about the theatre than Secretary Mellon does. . . . The movie show can be carried in a round tin can, the vaudeville sketch provides its own lines and scenery, all baseball needs to operate is bats and balls; but the legitimate producer must make his own scenery and pay his actors and the crew of the theatre. All the movie companies, baseball and vaudeville have paid dividends, but no legitimate company is able to do so. Otis Skinner, Mrs. Fiske, my wife [Grace George], and my daughter [Alice] have to go out into the sticks. ... I am not here to speak for the producers who degrade the drama. . . . I'm for putting the men who produce these musical plays showing bare legs and bare women in state's prison. ... I represent the clean, legitimate drama. I'm not representing the cabarets, thank God! . . ."