El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-14

incomes shall not be taxed. 1t is al
ways recognized that people have
right to an income large enough to
maintain themselves under decent
standards of living, free from taxation.
To deny them this right is practically
to force them upon the charity Of 9TH
ers or the aims OF the state. The eN-
emptiOn is generally known to ecOnO-
miStS as the minimum Of existence
and of course it varies with the many
standards of living in the several
countries What would be 10 WeXemp-
tiOn in the United States would De a
rather high one in England and a very
high one in Germany. In some cOun-
tries there is a system Of Attachments
which lowers the tax rate as the aDil-
lty to pay grows less in the individual
Limit for Exemptions.
There is usually a limit, however, be
low which any country will not 90 in
taxing incomes. This not only arises
from the fact that money taken from
people who have no margin of profit
above the most pressing needs and
peremptOTy requirements may have
TO be refunded to them in the form of
charity. but more so from the fact that
the cost of collecting and keeping the
record of very small sums is greater
than the amount collected As no gov
eminent cares to pay out more than II
gets in for the mere purpose of getting
it in. there is a limit beyond which
reasons other than consideration for
the taxpayer prompt the taxing power
not to go.
On the other hand. when exemptions
are raised TO q point too far Up the
scale IL throws the burden upon such
comparatively few people that it comes
TO be dangerous class legislation. In
republic such a policy so restricts the
number of taxpayers that the masses
never feel the tax, and often il leads
them to unjust discrimination against
the wei to do. When the majority
and especially an overwhelming ma
jOrity of the voters. are not affected
that they should. in the beginning, look
with equanimity upon heavy taxes
against the minority. and finally come
to be dissatisfied with anything but
of the rich. in order that the burden
may be taken off their own
Two Plans for Exemptions.
There are two methods of making
laws. Under one method the law says
that incomes below a certain sum
shall be exempt. while all incomes
above that amount shall be taxed at
their full amount Under the other
I method the exemption applies to all in
comes, no matter what their amount
Z Under the former plan. where there
was an exemption OF $1,000 and in
comes above that were taxed at two
percent. an income of 1898 might pay
nothing, while an income Of S1OOl
would pay SZ2.02- Wherever the in
come exceeded the exemption the en-
tire income would be assessed at the
regular rate. Under the latter plan.
where there is an exemption of $1,000
and a mans income is $1,000. the man
would have TO pay his two percent On
the second thousand only There are
many cases where the laws have been
entirely ambiguous upon the subject
and judicial construction had to be
obtained.
In the United States it has been the
I practice to exempt everybody from -he
payment of a tax upon the portion or
their income below the point of eX-
I emption. In other words. If there be
an exemption Of $4,000 as there was IN
der the last income tax law. and a
( man have an income of $4,000, he would
have to pay his tax only upon the dir
| ference between his total income and
! the legal exemption. or, in this case,
I upon only $1,000
France Started Exemptions.
I Exemptions from the payment OF
| taxes extended TO people of small
means are by no means new develop
/ ment. As far back as nos France De
I gan to exempt first individuals and
then whole classes. These exemptions
Q became so numerous that after awhile
! il almost wholly undermined the exist
; ing system of taxation In 1893 Eng
/ land established scheme OF eNemP-
B lions that not only exempted al m
! comes below $500 but which also al
: lions for all children in the home above
! two. Forty years later Great Britain
! increased the exemption to 500 ana
made it apply to all incomes, instead
Z OF to personal eNer1on incomes as hau
/ been the practice
Tax VIII Not Affect Many.
/ Exemptions. even when very low
I absOlve the great majority of the pe2-
I pie from the payment of income taxes
If the United States should decide II
exempt all incomes of $4,000 and less
the number of people who would nave
to pay the tax would be very small IN
deed. when compared with the total
population. The government service
I affords a criterion of what might De
expected under such an exemption
! There are some 4OO. 600 civilian work
ers in the employ of Uncle sam Yet
when one goes TO count those who have
! incomes Of more than $4,000 he tlndS
them few and far between. Consider
ing their salaries alOne-and Few gov
eminent employees ever get a chance TO
save enough to enjoy much other IN
cOme-One might assume that rne
number of people who enjoy incomes CT
$4,000 a year from their work Tor
Uncle Sam is certainly not more than
1000
There are a large number Of presi-
tial appOintees whose incomes do not
amount to $4,000 a year. and there are
some who are not presidential appoln-
tees who get more than $4,000. but they
probably approximately balance anu,
therefore We are justified in assuming
that the workers for Uncle sam IN the
$4,000 class approximately equal ana
certainly do not exceed the number OF
presidential appOintees outside OF the
second and third class postoffices-
Not Minimum Of Existence.
II the United States should adopt
$4,000 exemption it will declare to the
world that its living standard IS higher
than that of any other nation, Tor no
nation that levies an income tax makes
such a wholesale exemption Not many
countries fail to tax incomes that are
only a fourth as large, and some or
them 90 much farther down the line.
To say that $4,000 is the minimum OF
existence" in the United states would
be to fly in the face Of fact, for GER
1 tainly 70 out of % families in the
United States live and grow up with
much smaller than that When con-
gress fixes the exemption IL viii PROD
ably have a two fold aim in mind-tO
make it high enough so that all ques-
tion of the burdenSOmeness of the tax
can be eliminated. and Yet low enough
that sufficient incomes are reached 10
make the tax yield enough revenue 70
insure the treasury against a deIlcll-
But it seems certain in advance that
whatever else congress does with the
income tax It will not bring the eN-
emDtiOn down anywhere near to the