The Sun. [volume] (Price, Utah) 1915-1932, 1917-07-13
~ EDWIN n. A. ssLlomAN.

omy. Columbia University.
On May %, 1917. the House Of Rep
resentatives passed an act ito provide
revenue to defray war expenses and
for other purposes" In the original
bill ~ presented by the Committee OF
Ways and Means. the additional reve.
nue. 10 be derived was estimated nc 81.
6i0,420lO0O. The amendment 10 the IN.
come tar, which was tackled on 20 the
bill during the discussion In the House.
was expected 10 yield another $4,000.
600 or S50.OO0.O0O.
In discussing the House bin. two
problems arise:
]. How much should 10 raised by
taxationf
II. In what manner should this sum
be raiscdi
O. How Much Should Bs Raised By
Tssstionf
How was the figure Of 81. 800 900 900
arrived att The answer Il simple. when
the Secretary ~ the Treasury came 20
estimate the additional war expenses
for the year iOiT.is. he calculated that
they would amount 20 some $1,000.
ooo.ooo. Of which $4,000. 100000 was 20
be allotted 10 the allies. and $1,000.
100000 was 10 he utilized for the do
nestle purposes Thinking that Il
would be n fair proposition TO divide
this latter sum between loans aud
taxes. he concluded that tho amount
70 be raised by taxes was si.soOOoO
600
There are two extreme theories. each
Of which mny be dismissed with acant
courtesy. The one II that all war cx.
pcndiiures should be betrayed by loans.
and the other Is that all war expcndl.
lures should be betrayed by taxes
Each theory II untenabie.
II n indeed true that tho burdens OF
tho war should be borne 10y the pres.
ent rather than tho future generation;
but this does not mean that they 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 60 he distributed at least over y
decade within the same generation.
In the second place. when expendi.
lures approach the gigantic sums OF
prcsent.day warfare. the tax-only pol.
Icy would require more than the total
surplus OF social income. Were this
absolutely necessary. the ensuing hav.
&C In the economic life OF tho communl.
~ would have TO DO endured. But
where the disasters are 40 great and
at the same time 40 unnecessary. the
iax-oniy policy may be declared I'm.
practicable.
Secretary McAdoo had the right IN.
stinct aud highly commendable cour.
age IN deciding that a substa ntlal por.
tion. at least. Of the revenues should
be derived from taxation. But when
he hit upon the plan 81 $3.50 per cent,
that Il, OF raising one-half Of all do
nestle war expenditures by taxes, the
question arises whether he did not go
too far.
The relative proportion OF loans 10
taxes IL after all a purely business
proposition. Not TO rely to a large ex.
tent ON loans ut the outset OF war Is
a mistake.
DISADVANTAGES Of Excessive Taxes
The disadvantages OF excessive taxes /
az the outset OF the war are as follows:
i. Excessive taxes on consumption /
VIII cnuse popular resentment.
2 Excessive taxes ON Industry will
disarrnnge business. damp enthusiasm
and restrict the spirit OF enterprise NJ
Che very time when the opposite IL
needed.
>. Excessive taxes on incomes win de.
piete the surplus available for invest
ments and Interfere with the placing OF
the enormous loans which win be neces
sary In any event
4 Excessive taxes on wealth will
cause a serious dlminution OF the An.
comes which are az present largely
drawn upon for the supper, OF educa.
tional and nhllanthroplc enterprises.
Moreover. these sources OF support
would be dried up precisely at the time
when the need would be greatest.
8. Excessive taxation at the OUTSET Of
The war will reduce the elasticity avail.
able for the Increasing demands that
are soon TO come.
Great Britain's Policy.
Take Great Britain as an example
During the trst year OF the war she
taxes only slightly, IA order
% keep Industries going Nc top notch
During Cue second year she raised by
lew taxes only o per cent. OF her war
expenditures. During the third year
he levied by additional taxes lover
md above the pre-war leveD only
lightly more than u per cent, OF her
var expenses.
II we should attempt TO Do as much
q the first year OF the war as Great
Iritain did In the tLiri year II would
ntiice 20 raise by taxation Sl,25OO0O,
o. II, In order 10 be absolutely on
he safe side. II seemed advisable 20
lerease the sum 60 Si.50O.OO0 900, this
hould. in our opinion, be the maxi