Connecticut western news., 1917-06-07

\ spread as 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- 1 cording to his share in the Government. ] (2) 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) EXciseS should be imposed as far as possible upon commodities in the hands of the final consumer rather | than upon the articles which serve pri- marily as raw material for further 1 production.
 (4) Taxes upon business should be imposed as far as possible upon net earnings rather than upon gross re- ceipts or capital invested. | (5) Taxes upon income which will necessarily be severe should be both differentiated and graduated. That Is, there should be a distinction between | earned and unearned incomes and there should be a 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.
 60 The excess profits which are due to the war constitute the most obvious and reasonable source of revenue dur ing war times. But the principle upon 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 GO 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 34 per cent, and that even now in the fourth year of the war the income tax does not exceed 421a per cent.
 It 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 $532, 100000 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 34 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 profes- sional 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 endanoering the future, but are inviting all manner of difficulties which even Great Britain has been able to escape.
 Conclusion. ---7,-.-s The House bill contains other funda- mental defects which may be summed up as follows:
 ] Q) It purSueS an erroneous prlnc1ple in imposing retroactive taxes.
 @ 1t selects an unjust and unwork- able criterion for the excess-profts tax. .(3) 1t proceeds to an unheard-of height in the income tax.
 (4) It imposes unwarranted burdens upon the consumption of the commit nity.
 | (5) 1t is calculated to throw business into confusion by levying taxes on gross receipts instead of upon commodities.
 (G It fails to make a proper use of stamp taxes.
 l @ It follows an unscientific system in its flat rate on imports.
 (S It 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:
 CD The amount of new taxation should be limited to $1,250 0OOOOO0-or at the outset to $1,500,000,000. f, 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-profits tax based upon sound system ought to yield about OOOO0OO0
 (3) The income-taX schedule ought to be revised with a lowering of the rates on earned incomes below $10,000. and with an analogous lowering of the rates on the higher incomes, so as not to exceed 34 per cent A careful cal ! culation shows that an income tax of this kind would yield some $45O, O,000.- GOO add't onal
 (4 The tax on whisky and tobacco ought to remain approximately as it is, with yield of about $23O,OO0,OO0.
 These three taxes, together with the stamp tax at even the low rate of the House bill, and with an improved au- tomobile tax, will yield over $1 ,250,- | sr. .e