Newark evening star and Newark advertiser., 1914-12-30
DTRAVAGANCE IS
BRED BY INCOME
TAX, SAYSHPERT
peciares Il Needs Correction,
Il Because II Is a Class
y Levy.

suscisr - the Evening star.
PRINCETON, Dec. 3o.-The Fed
sral income tax, for which only 9S1,-
az returns were received last year,
Is reaching directly less than one
haig Of one per cent. OF the popula'
sion. promotes class conflict and pub
lie extravagance. and is a feeble in
s,rt,rnAnt with which TO reduce swoi-
Ian roytunes. in the opinion OF /. ).
Aaams. member Of the Wisconsin
state Tax Commission, in an ad-
sress here before the American Eco
,,,,,,s, Association. Mr.. Adams
mike on THE Effect Of Income and
inheritance Taxes on the Distribution
Of Wealth"
arhe present Federal income tax is
s5aiass tax. and class taxes breeu eX-
s.avaganee.v he said. 1T deserves
,nn,,val from almost every other
stanspoint. but in this respect 1t
,,aaas courageous correction. Income
,s~as should not be levied upon the
poor. but they should be levied upon
III The rich. i. e., upon everyone WIN
income exceeding the amount re-
ah,Ired by the American standaro OF
f,,,,nr An income tax falling on all
,be rich. so defined, would be the
,,as, notent instrument procurable
Cor inspiring and maintaining an er-
ssc.,ve interest in the conduct OF gov
eminent. 49,,
aff swollen fortunes are pao' theS
sbopld be attacked directly ana the
oanse removed. To let them accnmu-
sta and then tax them 10 per cent
4Tuacks of hypocrisy, and the attetnPt
in make the income tax 90 tne "oIA
Il social reform is apt TO spoll tlle n,
eoyne tax. Its virtues are nscai' IN
,,s,, oninion the income tax could per
sa-,, its best service as substitute
~ the personal property tax as ap-
nliad TO business enterprise. Inc ioss
II modern business is enormous the
y,ecessary hazards are great ana
gtrIkingly large proportion OF con
,as-ns in some lines constantly totter
q The brink of bankruptcy. 10 al!
snch marginal enterprises the prop
artv tax is remofseless. II lails Oh
property as much Wheuler II - pIG
luetlve or unproductiYe' "heIneI II Il
owned free or heavily ehcuIlpeLS5u'
,xhether II is part of a trustworthy
,nt desperate new business venture
az part of the salvage of a dying con-
serr. The property tax discourages
.xnsrir1ent. penalties Industrial pion-
aerfng. retards production, reduces
sunpIy. and increases prices. In snort,
Il Is nsrtlv shifted to consumers, re-
S,iees the amount of wealth TO be dl-
ssded and adversely affects the DIS
r-ibution of what is produced. IN
comparison the income tax WreSts
little or nothing from the new, the
experinental or the unfortunate btsi-
ness enterprise; II helps not only the
synau business man, but large con-
serns in new and hazardous under
tekIngs It helps-or abstains from
,,1rdening-every business enterprise
in a bad year.
"rhe property tax puts the State
IN the position of a preferred cred
Tor. and a harsh one. It's dues must
81 Maid by the business man in the
eIavelopment period Of the business,
before profits are earned, and later
whether profits are earned or not.
The income tax, however, presents
the State in the attitude of a part
41er or profit sharer. The first atti-
eude is not wholly indefensible. nor
altogether unfortunate. But with re-
snect to business enterprise it needs
7is npon ability to pay. There is a
growing feeling among the operators
and owners of public utilities that
government ownership is inevitable
This feeling, or movement, is meas.
urabiy stimulated by the risors of
the property tax.
"The railroads of this country, for
Instance, are at present paying over
le per cent. Of their net earnings in
axes. and in some States the pro-
norton exceeds 20 per cent. II our
lax system gave greater scope to the
net. income principle, it would mate
rally enhance the chances OF prl-
yate ownership and operation. The
income tax works for the retention
of private management; ii makes the
State, not a preferred creditor, and
not the sole owner, but a full-hedgea
and sympathetic partner in private
industry"