Valdez daily prospector., 1917-10-03
now shall We Pay TO- the War?
Continued from Page Three)

IN considering the app0rtionment Of
the extraordinary burden of taxes In
war times certain scientific principle.
are definitely establishes:
How Taxes Should &c Apportioned.
a. The bu..irn of taxes must bl
spread as far IL possible over the
whole community 80 AZ to cause each
individual to share in the sacrifices &C
cording to his ability to pay and &C
cording to his share i'm the Government
(2) Taxes on consumption, which are
necessarily borne by the community al
large, should be imposed as far as pos
sible on articles Of quasi-luxury rather
than ON those of necessity.
(3) Excuses should bejmposed as far
rs 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.
a. Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
ceipts or capital invested.
~ Taxes upon income which will
necessarily be severe should be both
differentiated and graduated. That is
there should be a distinction between
earned and uncarned 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
difficulties. or to the more fundamental
objections which have been urge,
above.
Co The excess profits which are du,
to 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 u
per cent. This Is a sum unheard Of III
the history Of civilized society. 1t must
he remembered that 1t 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 wal
the income tax does not exceed 42l
per cent.
1t could easily he shown that taN
with rates on moderate incomes sub
stantially less than I'm Great Britain
and on the larger incomes about rs
high. would yield only slightly less THAI
the $II3}22. OOO.GOO originally estimated IN
the House bill
1t Is to he hoped that the Senate will
reduce the total rate Oh the highest i'll
comes to "a per cent. or at most to ~
per cent. and that mt the same time II
will reduce the rate on the smaller In
comes derived from personal or prOfes
sional earnings.
If the war continues we shall have to
depend moro and moro 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 he summed
up as follows:
"a 1t pursneS an erroneous principle
In imposing retroactive taxes.
e. 1t selects an unjust and unwOrk
able criterion for the excess-prOfits tax.
g. 1t proceeds to an unheard-o'
height In the income tax.
a. 1t imposes unwarranted burden
upon the consumption Of the cOmmu
nifty.
(5) 1t is calculated to throw business
into confusion by lcvying taxes on grOs.
receipts instead of upon commodities.
60 1t fails to make proper use o.
stamp taxes.
"a 1t follows an unScientific system
In its fiat rate on imports.
81 1t includes multiplicity of pet
" and unlucrative taxes, the vexatiOus
ness of which is out Of all proportion t"
the revenue they produce.
The fundamental lines on which the
House bill should he modified are sum
med up herewith:
IN The amount of new taxation
should be limited to $1.25O. 900. OOO-or
at the outset to 81 ,5O0,OOO.OOO To do
more than this would be as unwlse as
1t 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.
(lJ The excess-profits tax based upon
a sound system ought to yield about
$780, 100000.
g. The income-tax schedule ought to
be revised with a lowering of the rates
ON earned incomes below $4,000, and
with an analogous lowering Of the
rates on the higher incomes. so as not
to exceed "a per cent. A careful cal
culatiOn shows that an income tax of
this kind would yield some $45O.OOO.-
600 additional.
~ The tax on whisky and tobacco
ought to remain approximately as 1t Is.
with n Weld Of about 500. 600. 600