The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1913-12-18
Taxes and Prices,

From the WauSau Record-1eraId:
The proposed federal Investigation of
the high cost of living will be worth
while If it will make plain to the peo-
pie the part which the cost Of running
the goVernment-state and federal -
plays in fixing the price of the ,neees-
saries OF life. Unless it does show
that, it will be worthless. >
1t costs eight hundre million dollars
a year to run the federal government.
It costs at least an equal amount to run
the various state n county govern
ments. Probably half as much-four
hundred ~millions-is required to run
the various local and municipal gov
ernments. Here is a sum aggregating
two billions a year, not a dollar Of
which is used productivity, and the
most of which is so employed as to
AXE an army Of capable men away
from productive pursuits.
But this sum does not begin to meas
ure the extent of the burden. To un-
derstand what that burden really is it
is necessary to consider how and by
whom the taxes are paid; The common
opinion that it is paid by the rich is
wholly erroneous. No matter how the
tax is laid, in the first place, 1t is, in
the long run, added to the cost of pro-
ductton, and paid by the ultimate con-
sumner. Here is a maxim which every
citizen should ponder:
Capital Cam Not BE Taxed. ,:
Capital must receive a certain re-
turn, or it will not be employed. It
can and does receive its return by the
simple process of adding all expenses
to the, price of its product. It will re-
oeive that return as long as 1t is en-
ployed.
Every pretended tax on capital, in
whatsoever form is. in reality a tax on
production. and is paid by the consum-
er.
This may be made clear by a few
examples. :
The tax on distilled spirits is. a doll
lar II ten cents a gallon. The cost
Of producing a gallon Of whiskey is
between thirty and forty cents, some
times less. A fair retail price would
be fifty CENTS. The consumer pays from
three to ten dollars for 1t. Is it not
perfectly plain that the drinker, in this
case, is h e true tax payer. and is it not
also clear h a for each dollar that
reaches the government at least two
other dollars are paid out-wasted-by
the mere friction of the system?e
Tobacco furnishes another equally
clear illustration. The tobacco in a ten
cent cigar, or a forty cent plug of to-
bacco costs about twelve to eighteen
cents a pound, except, perhaps, an In
considerable portion used for wrappers,
which costs more. But the federal tax
added to 1t, and the restrictions under
which 1t is sold, forces the price up to
probably a dollar a pound. The con-
sumer pays the taxes, and for each
dollar OF taxes three times as much
more WnlCn ne WOuIQ not nave TO pay,
If the taxes did not exisA.s
1t is~clear, too, that the ten cent tax
on oleomargarine is added to the price.
The duties paid on imports are added
to the price Of the imported articles,
except where local competition forces
the price OF the imported article down.
In all these cases it is fairly evident
that the err is the victim. 1t is
equally susceptible of proof thatfin the
more indirect methods of taxing cor-
porations, taxing incomes, taxing
privileges, and all other devices for
shifting the burden to- the rich, the tax
is merely added to the price OF the
output. From these facts 1t follows
that in. order to put into, the public
treasures the aggregate Of two billion
pay at least FIVE billion dollars. And
this burden Is distributed, not lin pro.
portion to the ability of the people tc
pay, but in proportion to amount OF
the n~ecessaries of life consumed by
them. The entire value of the farm OF
farm products produced in America il
less than eight billion dollars a year
The entire first cost value of all other
products consumed probably does moi
exceed eight billions. To this product
aggregating sixteen billion dollars, oul
system of taxation adds burden o1
1--WE billions more.
These figures, which are at Teas
accurate enough to illustrate the point
show what is perhaps the largest ele'
ment in the cost of living problem, Il
the people thoroughly understand this
| Instead of the demagogue's cry Of "soai
the rich,n there would be q demand fol
4 more economical government, which
would sweep everything before It