The commonwealth. (Scotland Neck, N.C.) 1896-1929, 1917-06-12

4
How Taxes Should Be Apportioned.
% The burden of taxes must be
spread as far as possible over the
whole community so as to cause each
individual to share i'm the sacrifices ac-
cording to his ability to pay and ac-
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) Excuses should be imposed as far
as possible upon commodities in the
hands of the final cons1gner rather
than upon the articles whSA serve pri- |
marily as raw material for further
production.
10 Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
ceipts Or capital invested.
o. Taxes upon income which will
necessarily be severe should be both
differentiated and graduated That is,
there should be distinction between
earned and unearned incomes and there
should be higher rate upon the larger
incomes It is essential, however, not
to make the income rate SO excessive
as to lead to evasion, administrative
difficulties, or to the more fundamental
objections which have been urged
above.
e. The excess profits which are due
to the war constitute the most obvious
and reasonable source of revenue dur
Sv,<p = Dv,k ~, l.
which these war-proft 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 "a per cent, and that
even now in the fourth year Of the war
the income tax does not exceed 1917
per cent
It could easily be shown that tax
| with rates on moderate incomes sub
/ stantfally less than in Great Britain.
and on the larger incomes about as
high, would yield only slightly less than
the $500, 600, 900 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 81 per cent, or at most to 40
per cent, and that at the same time it
will reduce the rate on the smaller In
comes derived from personal or profess
s1onal earnings.
If the war continues we shall have to
depend more and more upon the IN
come tax. BY imposing excessive rates
now we are not only endangering 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:
(1) It pursues an erroneous principle
in imposing retroactive taxes.
(2) It selects an unjust and unwork-
able criterion for the excess-prof1ts tax
g. 1t proceeds to an unheard-of
height in the income tax.
|
upon the consumption of the commu
! nifty.
90 It is calculated to throw business
into confusion by levying taxes on gross
receipts instead of upon commodities.
60 It fails to make proper use OF
stamp taxes.
60 1t follows an unscientifc system
in it's fat rate on imports.
(S) It includes a multiplicity of pet
ty and unlucrative taxes, the vexatious
ness of which is out of all proportion tt
the revenue they produces
House bill should be modified are sum
med up herewith:
"a The amount of new taxation
should be limited to ST ,25O, 100000
at the outset to $1,5oO,OOOO00. To d
) more than this would be as unwise a
: it is unnecessary. To do even thi
! would be to do more than has eve
been done by any civilized Govern
ment in time of stress.
(2) The excess profits tax based upO
t sound system ought to yield abou
$5OO.O00,O00.
81 The income-tax schedule ought t
: be revised with lowering of the rate
: on earned incomes below $4,000, an
I with an analogous lowering of tn
J rates on the higher incomes, so as nc
to exceed 81 per cent. A careful ca
u culation shows that an income tax G
! this kind would yield some $45O,OOO
600 additional
! ~ The tax on whisky and tobacc
). ought to remain approximately as it Il
t with yield of about $3.50, 100000.
e These three taxes, together with til
stamp tax at even the low rate of til
lf | Horco hill and with an imnrQyed al