The Washington herald., 1917-06-02
THE HOUSE REVENUE BILL
A Constructive Criticism.
IECoND ARTICLE. How Shall the Tl1ss BE
AppOHioned! and Conclusion.
BY EDWIN R. A. SELIGMAE.
McVickar Professor ~ Political Economy.
Columbia TniVerylty


In considering the Rpportionment %
the extraordinary burden Of taxes IN
war times certain scientific principles
are definitely established:
spread as far as possible over the whole
community 50 as TO cause each individ-
ual to share In the sacrifices according
TO his ability to pay and according TO
his share in the gov ernment.
~ Taxes on consumption. which are
necessarily horne by the community at
large, should be imposed as far as pos
sible on articles OF quasi-luNury rather
than on those OF necessity.
~ Excises should be imposed as far
as possible upon commodities in the
hands OF the final consumer rather than
upon the articles which serve primarily
as raw material FOR further production.
% Taxes upon business should be i'm
posed as far as possible upon net earn
inEs rather than upon gross receipts or
- Taxes upon income which will nee
essarily be severe should be both differ
entiated and graduated. That is, there
shOul be a distinction between earned
and unearned incomes and there should
be a higher rate upon the larger in
comes 1t Is essential. however. not to
make the income rato 81 excessive as to
lead to evasion, administrative dlnicul-
ties. or to the more fundamental objec-
tions which have been .rEed above.
80 The excess profits which are due
10 the war constitute the most obvious
q
war times. But tho pr" Iple upon
which these war-proft taN. IS are laid
must he equitable In theory and easily
calculablo in practice
Tested by the above principles he
House bill sins in nImbcrlcss respects
Title l Includes the income taxes. both
new and retroactive. tn" retroactive
tax is clearly inequitabIe. 1t applies 10
corporations and iudiv dua!S alike, and
its seeks in the case Of corporations -.
tax something which .s non"Nistent, for
the 1915 corporate earnings have been
for the most part distributed IN the shape
of dividends
The additional income tax as passed
by the House runs W to rate OF ~
per cent. This is a sum unheaTd of IN
the history Of civilized society. X mlsl
he remembered that 1t was only after
the first year Of the war tha, Great
Britain increased her income tax 10 the
maximum Of g per cent. and ln1t even
now in the fourth year Of IN" war the
income tax does not exceed = y per
tax with rates on moderate incomes
substantially less than in Grca' Britain,
and on the larger incomes ABOUT as
high, would yield only slightly ..ss tnan
the 1892. .p0c 0l0 originally estimated IN the
House bill. II is to be hoped that the
Senate will reduce the total rate on the
highest incomes 10 a per cent or al m Ost
TO N per cent, and that at the same
time II will reduce the rat" on the smaller
incomes derived from pcrsonal or pro-
We shall have to depend more and more
upon the income tax BY imposing ex-
CesSive rates now We are NOT only en-
dangerinE the future. but are inviting all
manner 0f diflcuItl"s viii even Great
Britain has been abl" 70 "ScaNH
Title L. the cxcCss-yE0ItE TAX. Tn
fortunately. the HOIs" -nl'en'"C itself
with doubling the ralc a. IN" existing