Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1917-06-21

war line certain Sclentllc principles
are definitely established:
How Taxes Should Be Apportioned.
a. The burden Of taxes must be
| spread MS 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 ac-
cording 10 his share IN the Government.
~ Taxes OH consumption, which are
necessarily Dorae by the community at
large, should be imposed as far as pos
sible Oh articles Of qlasi.luxury rather
than on those of necessity.
90 Excuses should be imposed as far
as possible upon commodities III the
hands of the final consumer rather
than upon the articles which serve Tri-
marily as raw material for further
production.
~ Taxes upon business should be
imposed us far as possible upon net
earnings rather than upon gross re-
oeipts or capital invested,
~ Taxes upon income which will
necessarily be severe should be both
dIilG E CJfLIuuCd dIu SlNItIiltQ. 1iidG 10,
there should be a distinction between
earned and unearned incomes and there
should be a higher rate upon the larger
incomes. 1t is essential, however, not
to make the income rate so excessive
as to lead to evasion, administrative
objections which have been urged
above.
Co. The excess profits which are due
to the war constitute the most obvious
and reasonable source of revenue dur
ing wal times. But the principle upon
which these war-proft taxes are laid
must be equitable In theory and easily
calcnlablc in practice.
The Proposed income Tax.
The additional income tax as passed
by the House runs up to a rate of so
per cent. This is a sum unheard of in
the history of civilized society. 1t must
be remembered that it was only after
the first year of the wal 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 4211k,
per cent.
1t 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 $53 2 DOC, 600 originally estimated in
the House bill.
1t 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
comes derived from personal or profes
sional earnings.
If the war continues we shall haVsto
depend more and more upon the in
come tax. BY imposing excessive rates
now we are not only endansering the
future, but are inviting ali amer 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:
~ 1t pursues an erroneous principle
In imposing retroactive taxes.
() 1t selects an unjust and unwork-
able criterion for the e~xcess-profits tax.
~ 1t proceeds to an unheard-of
height In the income tax.
"a 1t imposes unwafranted burdens
upon the consumption of the commu-
nifty.
() 1t Is calculated to throw business
into confusion by levying taxes on gross
receipts instead of upon commodities.
Co 1t fails to make a proper use of
stamp taxes.
90 1t follows an u~nscientiic system
in its fiat rate IN imports.
81 1t includes a multiplicity of pet
ty and u%nlucrative taxes, the vexatious.
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:
a. The amount of new taxation
Suoulu De limited To Va
at the outset to 81, 500. 100000. To do
more than this would be as unwise as
It is unnecessary. TO do even this
would be to do more than has ever
been done by any civilized Govern
ment in time of stress.
~ The excess-protits tax based upon
q sound system ought to yield about
$500 100000.
(S) The income-tax schedule ought to
be revised with a11owering OF the rates
on earned incomes below S10,OOo, and
with an analogous lowering of the
rates on the higher incomes, so as not
to exceed 81 PEI cent. A careful cal
culation shows that an income tax Of
this kind would yield some $4,000
300 additional.
lA) The tax on whisky and tobacco
ought to remain approximately as It. is.
with a yield OF about $$2s30 100000.
These three taxes. together with the.
stamp tax at even the low rate OF the
House bill, and with an improved u
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