Monroe City Democrat. (Monroe City, Mo.) 1888-1919, 1917-07-06

o'ny. Columbia University.
On May Is, 1917, the House OF Rel
resentatives passed an act ito provid
revenue to defray war expenses an
for other purposes" In the ori.ina
bill as presented by the Committee o
Ways and Means, the additional reye
hue to be derived was estimated at 81.
SlO,420,OOD. The amendment 10 the i'm
come tax, which was tackled on to Ia,
Dill during the discussion In the House
was expected TO yield another SiO,0,D.
600 or SJ0.OOO.OOO.
In discussing the House bill. two
problems arise:
l. How much should he raised hy
taxation?
IL In what manner should this sum
be raised7
J. How Much Should Be Raised by
Taxation7
How was the figure Of 81. SoO. GO1 go
arrived at? The answer is simple. When
the Secretary Of the Treasury came 10
estimate the additional war EXPENSES
for the year 191T-1S. he calculated that
they would amount to some S,;fn,.-
100000. OF which 5000. OO0. 90 was TO
be allotted TO the allies. and S3fa.-
100000 was to be utilized for the do
mestc purposes. Thinking that il
would be fair proposition TO divide
this latter sum between loans and
taxes, he concluded that the amount
IN no rQiSa1 hr- 60 =
900.
Inere are two extreme theories each
or which may be dismissed with scaut
courtesy. The one Is that all war ex-
penditures should be betrayed by loans.
and the other is that NIL war expendi.
lures should be betrayed by taxes.
Each theory is untenable.
1t Is indeed true that the burdens of
the war should be borne by the prps-
ent rather than the future generation:
but this does not mean that hey should
be borne by this years taxation.
Meeting all war expenses by taxation
makes the taxpayers in one or two
years bear the burden OF benefits that |
ought TO he distributed at least over n
decade within the same generation.
In the second place, when e1pendi- |
lures approach the gigantic sums Of
present-day warfare. the tax-only pnl-
Icy would require more than the total |
surplus Of social income. Were this
absolutely necessary, the ensuing hay
&C In the economic life Of the communi- |
Z hn. - -.
where the disasters are so great and !
at the same time so unnecessary thu
taz-only policy may be declared il =
practicable
Secretary McAdOo had the rigI # in.
stinct and highly commendabl,. ,-,,r
age In deciding that substantial. nor
ton, at least, OF the revenues SI,mTd
be derived from taxation. But when
he hit upon the plan of $3.50 Der con,
that is, Of raising one half Of nh dc
nestle war expenditures by taxes
arises whether he did the
too far not go
The relative proportion
faxes is after all Of loans TO
Not to purely business
tent on loans ut = rely TO a large eN-
a mistake. ne outset of a war is
Disadvs-
The - Is Exces,iv, Taxes,
at r. ,soJrantores Of excessive take
70 outset Of the war are as follow
l. Excessive taxes on CONSUMPTION
will cause popular resentment.
2. Excessive taxes on industry vii
disarrange business, damp enthusiasm
and restrict the spirit OF enterprise
the very time when the opposite i
needed.
3 Excessive taxes on incomes will dc
plete the surplus available for invest
ments and interfere with the placing q
the enormous loans which will be nece'
sary in any event.
4. Excessive taxes on wealth wi
cause a serious dininution Of the II
comes which are at present larscl
drawn upon for the support OF educi
tional and phiianthropic enterprise
Moreover, these sources of supper
would he dried up precisely at the tim
when the need would be greatest.
s, Excessive taxation at the outset {
the war will reduce the elasticity avaI
able for the increasing demands thu
are soon TO come.
Great Britain's Policy.
Take Great Britain as an "Namlr
During the first year of tn" war 81
increased taxes only slightly. in ord'
to keep industries going ut top note
During the second year she raised !
new taxes only 9 per cent. Of her VI
expenditures During the third ye;
she levied by additional taxes Tow
and above the pre- war lcvcn on
slightly more than Il per cent. OF b
war expenses.
II we should attempt TO do as mt