t'aae Two 



Income Tax 



Board of 



THE I. A. 



RECORD 



Before Legislature This Week 



Trade Bill Passes Senate, Now Up to the House 



T AST week saw the first skirmish be- 

 -■-^ tween friends and opponents of 

 the I. A. A.'s two measures, the stJite 

 income tax proposal, and the Kessing er 

 public exchange regulatbry bill. B(th 

 won victories when the Senate Com- 

 mittee on Revenue voted overwhelm 

 ingly on Tuesday May 3 to send ttie 

 tax measure out with a fav6raMe 

 recommendation, while the Board of 

 Trade bill passed the Senate on Thu's- 

 day with a vote of 30 to 11. 



The Senate committee on Tuesday 

 afternoon went to bat determined to 

 get at the bottom of the income tax 

 measure. Chairman Martin Carls jn 

 called on both opponents and propon- 

 ents to present their arguments. Join 

 C. Watson started off for the I. A. A.. 

 explaining the salient features of tie 

 bill and emphasizing its in lieu fea- 

 tures. Questions came thick and fsst 

 but Watson stayed on top, meeting all 

 unfriendly attacks with figures and 

 facts that mowed down the opposition. 



Colin C. H. Fyffe, attorney for tie 

 Illinois Manufacturers Association wlio 

 followed Watson, put all his eggs in 

 one basket by centering his attack <in 

 the constitutionality of the proposal. 

 "I hope to show in my remarks thit 

 this bill regar41ess of its merits car 't 

 possibly become' law because it fails :o 

 meet the requirements of the Illinois 

 constitution," he said. Simon Lan ;z 

 replied sharply, "There are good 

 lawyers who disagree with you. This 

 same argument has been used time ard 

 time again against bills which are notv 

 on the statutes. That's a question f(r 

 the courts to decide." "^ 



The counter attack by Lantz floored 

 the speaker for a minute but he r(!- 

 sumed warily pointing to statements by 

 the revenue amendment committee cf 

 last year and bearing down on the 

 graduated features of the tax which 

 he stated are contrary to the revenue 

 section of the constitution providing 

 for uniform assessments on propertj'. 



Donald Kirkpatrick, legal counsel 

 for the I. A. A., came back with a. 

 broadside of supreme court decisions 

 in this and other states in which ir- 

 come or inheritance taxes with similar 

 features had been upheld. Kirkpal- 

 rick's evidence was weightier and mor s 

 authoritative. A. C. Everingham folr 

 lowed with a strong appeal summai 

 izing the need for the reform. Th ; 

 round ended with the opponents get- 

 ting the worst of it. 



Douglas Sutherland, secretary of thi 

 Civic Federation of Chicago, who was 

 with us in the fight to pass the revenue 

 amendment, next took the floor an(! 

 half critical, half commendatory, sug 

 gested a few changes including the pro 

 vision that the state tax commission ad 

 minister the tax rather than the audi 

 tor. He criticised the tax deductec 

 from tax exemption feature but pre 



. J; - . - . 



sented nothing to replace it. Minor 

 suggestions were made by representa- 

 tives of the Chicago Real Estate Board, 

 and an insurance association. ; - 



Lantz Counters 



Then the chairman opened the meet- 

 ing for discussion. Senator Roy C. 

 Woods of Chicago made a futile ef- 

 fort to refer the bill to the attorney 

 general for an opinion on its constitu- 

 tionality. Lantz advised that the at- 

 torney general refused" to give opin- 

 ions on the constitutionality of pend- 

 ing legislation. Woods got hot under 

 the collar at that and harangued the 

 chairman and everyone in general, but 

 his motion failed to get a second and 

 died in its tracks. 



The committee then voted to pass 

 out the measure with the recommenda- 

 tion that it "do pass." Woods and Mc- 

 Dermott of Chicago cast the only dis- 

 senting votes. Barbour of Evanston 

 voted present. 



Over in the House Committee on 

 Revenue, the same measure sponsored 

 by Representatives A. Otis Arnold and 

 Gus Johnson received rough treatment. 

 The Cook county delegates who packed 

 the committee, organized their steam 

 roller and ran over the measure rough 

 shod before Chairman Hutson knew 

 what was up. The committee was 

 scheduled for a hearing on the bill. 

 The L A. A. representatives and Fyffe 

 of the Manufacturers Association were 

 there but they never had a chance to 

 get in a word. 



I The Steam Roller 



The Cook county group saw that they 

 had enough, votes to do as they pleased 

 so they forced through a motion by 

 Schnackenberg that the bill be reported 

 out with the recommendation that it do 

 not pass. This motion carried 11 to 7. 

 Voting to kill the measure were 

 Church, Elrod, Juul, Schnackenberg, 

 Swanson, Gill, Ratigan, Minsky, Igoe, 

 and Lipka, all of Cook county. John 

 Wylie of Ottawa was the only down- 

 stater who voted with tlie Cook county 

 crowd. He will have to do some ex- 

 plaining down in Lasalle county next 

 time he goes out to get the farmers' 

 vote. Hennebry of Will county voted 

 present. He is evidently not interested 

 in helping the farm and home owner 

 get relief from the tax burden. 



Voting against the motion and for 

 the measure were Allen, Hutson, Hunt- 

 er, Phillips, Stewart, Vaughn, and 

 Warren. All are from down state and 

 all have good records on farm ques- 

 tions. 



The Gas Tax 



The gas tax hearing on Wednesday 

 afternoon, May 4, was a walk-away 

 for the administration. Frank Sheets, 

 chief highway engineer, left nothing 

 more to say. He took the wind all out 

 of the sails of the Chicago Motor Club 



and the Cook county opposition by ad- 

 mitting that Cook county paid 34 per . > 

 cent of the state motor license fees. 

 He admitted likewise that the present . 

 schedule of roads under the $100,000,- \ 

 000 bond issue could be built without \ : 

 a gas tax. 



"It's just a question of whether you 

 want the roads now or 12 to 14 years ; 

 from now," he said. "With the gas 

 tax we can build 1200 miles of road 

 a year. Without it we can build only ■ 

 around 800 miles per year, which will 

 necessitate dragging out the hard road _.. 

 program until 1942." 



The array of facts and figures pre- 

 sented by Sheets swept everything be- • 

 fore him. He showed that there are 

 6021 miles of hard road completed of 

 the 9800 miles provided for under the 

 $60,000,000 and $100,000,000 bond is- 

 sues. Sidney Gorham, attorney for the ;. 

 Chicago Motor Club, told why the gas 

 tax was unnecessary. Si Mayer of the 

 Illinois Automobile Club who followed 

 him disputed the figures presented by •> 

 Sheets. The hearing ended evidently 

 with neither side convinced that the 

 other is right in opposing or upholding 

 the tax. 



, Meents Open* I: 1 £ / 



Senator Meents opened up the hear- 

 ing reviewing the road program in Illi- 

 nois and emphasizing the point that 

 the gas tax is a fair and equitable 

 system of raising funds to build roads. 

 He showed how all but four states have 

 gas taxes, and stated that two of these 

 will soon enact them. If the friends ' 

 and enemies can get together with 

 suitable amendments, the gas tax will 

 go through, otherwise it will have to 

 wait until a later time. 



The I. A. A. is for a gas tax with . 

 certain reservations. We want to in- 

 sure a definite portion of the funds go- 

 ing back to the counties to build sec- 

 ondary roads. The administration / 

 seems to be friendly to the proposal 

 that a graduated portion of the funds • ;. 

 beginning with 10 per cent the first 

 year go back to the counties, the basis ■ 

 of distribution being the amount con- 

 tributed by the various counties. 

 Another proposal has been offered — ■ 

 not by the administration — that a 

 graduated portion go back to the coun- 

 ties, 50 per cent on the basis of road . - 

 mileage in the county. And 50 per cent 

 on the basis of the amount of gas tax 

 contributed by the county. The fate ': 

 of the bill hinges on whether or not 

 proponents of the various proposals 

 can. get together. Last reports indi- : 

 cated a deadlock. Watch for future 

 announcements. 



The public exchange regulatory 

 measure which was carefully drafted 

 by R. A. Cowles and Donald Kirk- 

 patrick of the I. A. A. and introduced 

 by Senator Kessinger passed the Sen- , ' 



(Continued on page 6.) 



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