The Knoxville independent. [volume] (Knoxville, Tenn.) 1894-current, 1917-06-23

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cording to his ability to pay and az
cording to his share in the Government
~ Taxes on consumption, which ar
necessarily borne by the community hi
i, large, should be imposed as far as pos
sible ON articles of quasi-luxury rather
than on those of necessity.
+ 81 Excuses should be imposed as fal
as possible upon commodities in tbt
hands of the final consumer rathei
than upon the articles which serve pri
marily as raw material for furthef
production.
az Taxes upon business should Id
imposed as far as possible upon net
earnings rather than upon gross ri
ceipts or capital invested.
o. Taxes upon income which VIZ
necessarily be severe should be bof
differentiated and graduated. That &
there should be distinction betwe4
earned and unearned incomes and thef
I should be higher rate upon the large
incomes. 1t is essential, however, n0s
| to make the income rate so excessi@
as to lead to evasion, administering
difficulties, or to the more fundamenlbl
objections which have been urgea
! above.
(6) The excess profits which are due
| to the war constitute the most obvi9i&
and reasonable source of revenue dur.
ing war times But the principle upon
which these war-pro1it 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 a rate of 80
per cent. This is sum unheard of III
the history of civilized society. 1t In3ss
be remembered that 1t was only after
the first year Of the war that Great
Britain increased her income tax to the
maximum of 81 per cent, and thai
even now in the fourth year of the war
the income tax does not exceed 42lh
per cent.
1t could easily be shown that tax
with rates on moderate incomes sub
stantially less than in Great Britain,
and on the larger incomes about rs
high, would yield only slightly less tim
the $685., 100000 originally estimated&n
the House bill.
1t is to be hoped that the Senate will
reduce the total rate on the highest In
comes to "a 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 prdfes-
sional earnings.
If the war continues we shall have to
depend more and more upon the En-
come tax. BY imposing excessive n tae
now we are not only endangerines N a
future, but are inviting all mar
difficulties which even GrAat
has nesH abe -t6ssscsss
Conclusion. ~
The House bill contains other flfE da-
mental defects which may be sumHned
up as follows:
a. 1t pursues an erroneous principle
in imposing retroactive taxes.
(2) 1t selects an unjust and unwPrk-
able criterion for the excess-profits TAX.
81 1t proceeds to an unhearl-of
height in the income tax.
(4) 1t imposes unwarranted 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 proper use of
stamp taxes.
60 1t follows an unscientific system
in it's fiat rate on imports
(S) 1t includes a multiplicity Of pet
ty and unlucrative 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
~ The amount of new taxation
should be limited to 81 100000. 000-or
at the outset to $1,500,000,000 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.
(2) The excess profits tax based upon
a sound system ought to yield about
$500,0OO,000
O. The incOme-tax schedule ought to
be revised with 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 $450,O00.
600 additional.
"a The tax on whisky and tobacco
ought to remain approximately as il is.
with a yield Of about $3.50, 100000.
These three taxes, together with the
stamp tax at even the low rate of the
House bill, and with an improved au-
tomobiIe tax, will yield over $3.50,
100000, which is the amount of money
thought desirable.
The above program would be In har-
mony with an approved scientific sys-
TEN. II. will do away with almost all
OF the complaints that are being urged
against the present. 1t will refrain
from taxing the consumption of the
poor