The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1914-08-20
The Problem Of Increased Taxes.

The administration leaders are embarrassed by the
emergency calling for revenue legislation within
year after the passage of the Underwood tariff act.
The Mckinley administration had similar expert
ence, but with more direct cause In 1893 we had a
war in which this nation and Spain were engaged.
Now the war is confined to the Eastern Hemisphere,
but all the great nations with which we do business
are involved In 1893 Congress had deal with the
problem of increased expenditure. Now Congress has
to deal with the question of decreased revenue.
Whether the emergency legislation is enacted or
after election there will be many differences of opinion
as to where the new taxation shall fall. 1t must be
internal rather than tariff legislation unless it should
appear wise TO the sugar tariff to encourage
domestic production as we'll as to secure revenue.
In 1893 the Republican leaders went back to the
civil war taxes as model doubled the internal reye-
nue. taxes on beer and tobacco placed tax all
domestic wines and other beverages not otherwise
taxed under the internal revenue laws Excepting
natural spring waters), patent medicines and drug
compounds of every character except prescriptions.
That legislation also applied the stamp tax to bank
checks kilograms and many official papers. 1t also
authorized the bond issue.
That act of 1893 will suggest a model for an
emergency measure of the same character now, just
the civil plan suggested the legislation to meet
the increased expenditures account of the with
Spain There may be variations, elimnations, .ad
ditionS but successful act of this char
always suggests itself model for legislation
to meet similar conditions. Some legislators will turn
to the income tax as means of meeting the emer-
gency but experience with that does not offer much
assurance Of in securing revenues by in
creasng the tax. Representative Bailey of Pennsyl-
vana, proposes land tax, but that would cause
revolt among the farmers. Some of the economists
who desire to avoid general taxation and also dodge
criticism would place the whole burden on alcoholic
liquors and tobacco the theory that they volun
ary taxes as they touch the consumers and also be-
cause of the agitation for prohibition.
1t was found in 1893 that increased taxes could be
placed on beer and tobacco without reducing the
sumption, but Congress did not increase the tax
spirits for the reason that this of SI.Io gallon
was already the highest tax imposed by the govern
ment produced the largest paid TO the gov
ernment and the experience of the civil war period
showed that an.exorbitant encouraged fraud and
reduced the revenue In 1864 when the tax spirits
90 cents gallon it paid more than 85,ooo
900 gallons. The tax was increased to o5 cents gal
Ion in 1865 and 81 in 1856 with the result that the
exorbitant tax paid on only 100000 gallons
The increase of the tax to the basis of exorton not
only seriously reduced the revenues, but it encouraged
fraud and developed national scandal In 1869 Con-
gress reduced the tax to 50 cents gallon and again
than 100000 gallons of spirits paid the tax
1t was apparent that these fluctuations in the
amount of spirits reported for taxation represented
the huctuation in the consumption Of alcohol When
the tax reasonable there inducement for
fraud but when it exorbtant illicit stills sprung
up all the country and it cost the government
suppress moonshning than to collect the tax
The spirits is SI.Io gallon and last year
this tax produced $I64oooooo revenue, but the in
ternal officers seized 2375 illicit stills indi
eating that there is inducement to evade the law
particularly in prohibition States
The great increase in the use of alleged nonalco-
holic beverages in years offers good excuse
for the restoration of the tax of 1893 on domestic
wines, unfermented grape juice and many other
called nonacoholic beverages. 1t is estimated that
more than SIyooo,oooooo year spent for these
beverages, many of them of proprietary form like
the old patent medicines and there has been strenu-
effort to substitute them for the milder forms of
alcoholic liquors. especially beer Some of these So
called temperance drinks regarded by physicians
as even dangerous than the alcoholic beverages
and they all fall within the class of purely voluntary
consumption. A restoration of the tax Of 1903 on
such beverages would be of the best revenue pro-
ducers, and that tax has a good precedent.