The Wrangell sentinel., 1917-07-12


 are definitely estabiished:
 How Taxes Should Be Apportioned.
 CD The burden of taxes must he spread as far as possible over the whole community so as to cause each individual to share in the sacrifices ac- cording to his ability to pay and &C., cording to his share in the Government.
 @ Taxes on consumption, which are necessarily borne by the community at large, should be imposed as far as pos sible on articles of quasi-luXury rather than on those of necessity.
 (3) EXciSes should be imposed as far as possible upon commodities in the hands of the final consumer rather than upon the articles which serve pri. marily as raw material for further production.
 (4 Taxes upon business should be imposed as far as possible upon net earnings rather than upon gross re- ceipts or capital invested.
 (5l Taxes upon income which will necessarily be severe should se both differentiated and graduated. That is. 
 earned and unCalned incomes and here should be higher rate upon the larger incomes. II is essential. however. not to make the income rate so excessive as to lead to evasion. admin strative difficulties. or to the more fundamental objections which have been urged above.
 Al hn fS al r1n 10 the war constitute the most obvious and reasonable source of revenue dur ing war times. But the principle upon which these war-profit taxes are laid must be equitable in theory and easily calculable in practice.
 The Proposed Income Tax.
 The additional income tax as passed by the House runs up to rate of 60 per cent. This is a sum unheard of in the history of civilized society. It must be remembered that it was only after the first year of the war that Great Britain increased her income tax to the maximum of 34 per cent, and that even HOW in the fourth year of the war the income tax does not exceed 42l. per cent.
 It could easily be shown that a tax with rates on moderate incomes sub Stantially less than in Great Britain and on the larger incomes about as high would yield only slightly less than the S532 000.000 originally estimated in the House bill.
 It is to be hoped that the Senate will reduce the total rate on the highest in- comes to 34 per cent. or at most to 10 per cent. and that at the same time it will reduce the rate on the Sma Her hl- comes derived from personal or profes sional earnings.
 If t1e war continues we shall have to depend more and more upon the in come tax. By imposing excessive rates now we are not only enaannerina the future. but are inviting all manner of difficulties which even Great Britain has been able to escape.
 Conclusion.
 The House bill contains other funda- mental defects which may be summed up as follows:
 a It purSueS an erroneous principle in imposing retroactive taxes.
 @ It selects an unjust and unWork- able criterion for the excess profits tax
 (3l It proceeds to an unheard-of height in the income tax.
 (4D It imposes unwarranted burdens upon the consumption of the commu- nifty.
 Q, It is calculated to throw business into confusion by levying taxes on gross receipts instead of upon commodities.
 6, IL fails to make proper use of stamp taxes.
 @ It follows an unscientific system in its fiat rate on imports.
 fSl It includes a multiplicity of pet ty and unlucrative taxes, the yeXatious ness of which is out Of all proportion to the revenue they produce.
 The fundamental lines on which the House bill should be modified are sum- med up herewith:
 Cl The amount of new taxation should be limited to S1.25o 900. 0.0o0-or at the outset to S1.JOo00 GOO To do more than this would be as unwise az II lS tllHcCtNSdIN lo up SN fA tuIS would be to do more than has ever been done by any civilized Govern ment in time of stress.
 O The eXceSs-p profits tax based upon a sound system ought to yield about a0O,0D0000
 @ The income-tax schedule ought to be revised with a lowering of the rates on earned incomes below $1O.0oO. and with an analogous lowering of the rates on the higher incomes. so as not to exceed 34 per cent. A careful cal culation shows that an income tax of this kind would yield some S450.oO0.- GOO addit onal
 (4) The tax on whisky and tobacco ought to remain approximately as it Is, with yield of about S230, ,OOO. GOO.
 These three taxes. together with the stamp tax at even. the low rate of the