The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-03-25

RuimOns Effects of High Taxes.
one OF the resolutions OF the Democratic
state Convention IN Pennsylvania opens
an important question far too little con-
sidcrrd hitherto. This is the effect of tax
alton on industry.
II is the weight of state, county and
municipal taxation. that now hang. like
milestone about the neck of the nation.
1t has risen to such n height that capital
shirks it nj every turn. Men decline
enterprises of industry, here, there, aud
everywhere, because they fear the taxes
that confront them. They Will not incur
the hnzlrds of establishing new industries,
or the revival of suspended ones, where
the tax gathercr insists on a third Or q half
Of far income on the capital invested.
An over the country, with few eXccp-
tions. the rate of taxation on all visible
property il two and "A half to three per
cent on IT. actual value. Now. 1t is well
known that the average income OF capital
in the long run in this country is less than
six per cent. Where II has fair. unem-
barrassed chance, it does not earn more
than this; and if large capitalists can
men,S. they are content with it, because
they know the ordinary industries of the
country cannot flourish if they hahitually
ray more than this for the hire of capital.
When the rate of taxation in any village
or town or city Is, therefore, up In the
noghb lrh1ol of three per cent. the judi
cious investor of capital Mt once sees and
says that it Is no place to put his money.
To make ii even moderately productive to
its owner 1t must earn al least ten per cent.
and ms no form of industry can pay this
and continue To flourish 1t is to DEFY the
maxims Of prudence to make an invest
ment which requires such an impossible
return.
The results are visible on every hand.
There is plenty OF idle capital which seeks
employment and hire at four aud a half
and five per cent. But il there were
opportunities to engage in industrial
enterprises that would pay six or seven
per cent on the investment. nobody
could engage in them, because half of
the earnings must go to the tax gatherer
They would not bring rs much interest
to the investor as il he loaned his money
on substantial stocks and bonds at I've
per cent; and thus we see that although
money is plenty and goes begging, yet
enterprise flags. Capitalists are everywhere
hiding their money in secret loans, or put
/ ting il into Government securities, to
avoid taxation. 1t refuses to come out
! into the light of open day in the shape OF
bricks and mortar, and spindles, and
| Touring mills; in iron smelling, forging.
or rolling; in collicres and mines, and
all the thousand forms of visible occupa-
ton and investment. We do not say this
is owing at the present moment exclu-
| siVcly to the ruiuous rates of municipal
| taxation, but that il is n most important
factor in the situation is not 10 be denied.
1t is naturally 70 be supposed that some
| time or other we shall rise out of the
depths of depression and stagnation in
which nearly all the mechanical and min
| ing industries OF the country are now
plunged. But beyond all question that
period win be delayed in consequence OF
this depressing weight of taxation that
now loads the entire nation. No new in
dustry can be started. no old one can be
resusctated, except under this tremendous
embarrassment. The promise of adequate
| itluIHS HIS lltlflOlt EDl W NC llNGlO anu
exceptional in order to stimulate such an
enort. No ordinary expectation Will suf-
flee; for no industry can thrive that is not
able to bear the immense burden of three
per cent. taxation. And how aud when
can that het
There has been n recognition of the state
of things We nave now briefly depicted in
the public mind for several years 1t has
shown itself occasionally in the legislation
or attempted legislation OF several of the
States. 1t has been proposed TO invite the
establishment Of corporations for manufac
turing purposes by Offering them an I'M
munity from taxation for several years. In
some cases such manufactures have been
established on these terms. But the plan
is not well received generally, and it is an
inadequate remedy for the mischief it II
intended to obvlate. Ten years, which, We
believe, is as long a period of exemption as
has ever been proposed or given, is very
short time In the life of great manufac
turing corporation. 1t soon slips away,
and leaves the new industry to struggle
with its fellows who are impatient of com
panlonship in carrying their burdens
/ Thus the plan has not been successful IL
any noticeable degree; and to accomplish
the end aimed at, something more efieotiv
must be devised.
The practical question for the countr,
is. what shall the remedy bel What wi.
relieve the grinding load OF State an,
3 municipal taxation under which we gyoal
I and staggerl 1t does not advance tn
problem 10 cay that our public debt 4,
: J IN the main. the fruit Of inexousabl