New-York tribune., 1916-07-08
The New Revenue Bill.

cans in the House Of Representatives 10
rallv 70 the support Of the new revenue
hill on the ground that it is saturated
with borrowed Republican doctrine Mr'
Kjtchin is an old-lne Southern Democrat
He respects the ancient faith and Is still
n,re,S.nciled TO President Wilson's ousi-
nesslike theory that when party dec
laration becomes for the moment lrkSome
or inconvenient the proper thing TO 90 Is
10 discard it and appropriate some con-
trary declaration of the opposition party
Mr.. Wilson ordered the House ways
and Means Committee 10 provide IN the
revenue bill for the creation OF tarin
commission. Until he changed his mnd
suddenly last winter the Democratic
partv had always been bitterly opposed 10
the creation of such a commission. II
scrapped the Taft tariff board as soon as
il obtained control of the government IN
1918. It was entirely logical IN hghting
the tariff commission principle, since 'Ne
existence Of tariff commission lmpheS
g. nu-nose 10 adjust tariff schedules TO
economic needs and TO make customs ra'es
harmonic with conditions Of trade ana
production both in our own market ana
N the world market. II tariffs are TO De
levied for revenue only, as the Democratic
nartv has contended for many DECADES
there can be no need Of a permanent tariH
commission. The Secretary of the Treas
urv and Congress can easily figure out
the income needed without aid from ex-
perts in international competition or DO
mestic cost of production.
Republicans will gladly contribute TO
tho creation Of tariff board. They will
also cheerfully support the section IN the
revenue bill which seeks TO protect by
higher duties the manufacturers who are
trying TO establish an American coal tar
dve industry. By a sensible use Of the
taxing power such an industry can easily
be domesticated. just as the tinplate IN
dustrv was created here in 1891 by few
lines in the Mckinley tariff law.
The Republican party has fought honor
ABLY in this Congress for a larger meas
ure of military preparedness than the
President and the Democratic leaders IN
Congress were willing to consent to. The
result Of that fight is manifest in the re-
cent enormous increases Of the amounts
carried in the army and navy approprla-
ton bills. Republicans cannot logically
withhold assent 10 the new taxation made
necessary by a vast expansion OF our
military expenditure. Most Republican
REPRESENTATIVES will undoubtedly vote for
the Kitchin bill, which is, on the whole, the
least Objectionable revenue bill which the
Democratic party has framed IN its long
history.
Republicans arc not debarred, however,
from protesting against one feature of the
Kitchin measure. That is the failure of
its trainers to lower the income tax eX-
emption. The normal rate Of tax on in
comes has been raised from TO 2 per cent.
Rut the limit Of exemption under the
present law-S3OOO for the unmarried
and $4,000 for the married-remains un-
changed.
That is a serious blunder. The exemp-
tion and the normal rate of taxation are
fairly adjusted under the present law,
which was not designed to raise much over
s1OO,OOO.OOO If the income tax is to
be made more productive factor in the
scheme Of Federal taxation, its incidence
ought to be considerably broadened. No
other country in the world has an eXemp-
tion at all approaching ours. From the
point of view Of sound economies, it would
be much better TO lower the exemption
from $4,000 and $4,000 TO $4,000 and
$4,000 than 20 increase the rate above
$4,000 and $4,000 from ] TO per cent.
If it is desired TO differentiate more &C
curately between those near the margin
of exemption and those considerably above
it, a tax Of / per cent below $4,000 and
Of per cent above $4,000 and below $780,
600 would be more in line with economic
justice.
Judging by the example of European
countries, we shall be obliged TO raise
more and more of our Federal revenue
through taxation on incomes. 1t is impor-
tant, therefore, 10 get our income tax sys-
tenn as quickly as possible on a sound eco
nomic basis, instead Of exaggerating its
present narrowness and one-sdedness as
a class tax
The more income taxpayers the country
has the more citizens it will have with a
personal stake in efficiency of government
and the elimination of pork barrel
waste.
The Kitchn bill follows the line of least
resistance in raising the rate of the tax
without widening its incidence. That is
an error, in the light Of the experience Of
all other income tax leyying countries
The Republicans in the House and Senate