Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1917-06-14
A Constructive Criticism on tna
House Revenue Bill.
LOANS BETTER THAN TAXES
Five Reasons Why Excessive Taxes at
the Outset of War Are Disadvantage
ous-Great Britain Example Worthy
Of Emulation-How the Taxes Should
Be Apportioned,
BY EDWIN r. A. SEllGMAN,

| I'll may lCl Tic l1OuSc VI Itcp-
resentatives passed an act "to provide
revenue to defray war expenses and
for other purposes" In the original
bill as presented by the Committee OF
| Ways and Means. the additional reve-
nue. to be derived was estimated at 81,
$40. 10000. The amendment to the i'll
come tax, which was tackled Oh to the
| bill during the discussion in the House
was expected to yield another $4,000,
| 900 or $JO,OOO.OOO.
In discussing the House bill, two
problems arise:
|. How much should be raised by
| taxation?
ii. In what manner should this sum
be raised?
| !. How Much Should Be Raised by
Taxation?
How was the figure Of $500. 600, 900
arrived at? The answer is simple. When
| the Secretary Of the Treasury came to
| estimate the additional war expenses
| for the year. l917-1S. he calculated that
| they gould amount to some $1,000
| 100000. Of which $4,000, 100000 was to
he allotted to the allies, and $4,000.
100000 was to be utilized for the do
nestle purposes. Thinking that II
would be fair proposition to divide
this latter sum between loans and
taxes. he concluded that the amount
to be raised by taxes was $l.SOOOOO.
OGD
There are two extreme theories. each
Of which may be dismissed with scant
courtesy. The one Is that all war ex-
pehditures should be betrayed by loans,
and the other is that all war expendi-
lures should be betrayed by taxes
Each theory is untenable.
1t is indeed true that the burdens OF
the war should be borne by the pres
ent rather than the future generation
but this does not mean that they should
be borne by this years taxation.
Meeting all war expenses by taxation
makes the taxpayers in one or two
years bear the burden of benefits that
ought to be distributed at least over a
decade within the same generation
In the second place, when expendi-
lures approach the gigantic sums of
prcsent-day warfare. the taX-Only pol
lev would require more than the total
surplus OF social income. Were this
absolutely necessary. the ensuing hay
oc In the economic life Of the cOmmuni-
ty would have TO be endured But
where the disasters are SO great and
at the same time so unnecessary. the
tax-only policy may be declared i'm
practicable.
Secretary McAdoo had the right in
stinct and highly commendable cour-
age in deciding that substantial por-
ton, ut least, of the revenues should
be derived from taxation. But when
he hit upon the plan Of $3.50 per cent.
that is, Of raising one-half OF all do
mcStic war expenditures by taxes. the
question arises whether he did not 90
| too far.
The relative proportion of loans to
| taxes is after all purely business
| proposition Not to rely to a large cN-
| tent on loans Mt the outset OF a war is
mistake.
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