The Hays free press. [volume] (Hays, Kan.) 1908-1924, 1917-06-16

as DOSSlDl9 uDOA COmuOu1LlE8 Ii the
hands OF the final consumer rather
than upon the articles which serve pri-
marily as raw material Tor further
production.
"a Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
ceipts or capital invested
o. Taxes upon income which win
necessarily be severe should be both
differentiated and graduated That is,
there should be a distinction between
earned and uneerned 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 lea4 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-profit taxes are laid
must be equitable in theory and easily
calculabIe In practice
The Proposed Income Tax.
The additional income tax as passed
by the House runs up to a rate Of 50
per cent. This is a sum unheard OF in
the history OF civilized society. 1t 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 "a per cent, and that
even now In the fourth year OF the war
the income tax does not exceed 421z
per cent
1t 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 1892, OO0,OO 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 81 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 -
| depend more and more upon the in
| come tax. BY imposing excessive rates
now we are not only endaneering the
future, but are inviting all manner of
| difficulties which even Great Britain
has been able TO escape.
Conclusion.
The House bill contains other funda-
mental defects which may be summed
up as follows:
ID 1t pursues an erroneous principle
| in imposing retroactive taxes.
90 1t selects an unjust and unwork-
able criterion for the profits tax.
81 It proceeds to an unheard-of
| height In the income tax.
. "a It 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.
90 It fails to make q proper use OF
stamp taxes.
% 1t follows an unscientihc system
in its fat rate on imports.
| 81 It includes q multiplicity of pet
| ty and unlucrative taxes, the yexattous-
ness OF which is out Of all proportion ts
the revenue they produce.
|
The fundamental lines on which the
House bin should be modified are sum-
med up herewith:
u The amount OF new taxation
/ should be limited to 81, $50 ,00O.O O0-or
at the outset to $780, O0 O00 To do
more than this would be as unwise as
| 1t is unnecessary. To do even this
would be t. do more than has ever
been done by any civilized Govern
ment In time OF stress.
% The excess-prOfts tax based upon
sound system ought to yield about
$5O0OOO,OOO.
81 The income-tax schedule ought TO
be revised with a lowering OF the rates
on earned incomes below $4,000, and
with an analogous lowering Of the
| rates on the higher incomes, 50 as n t
to exceed 81 per cent A careful cal
culation shows that an income tax OF
this kind would yield some $45O.OO0.-
600 additional
~ The tax on whisky and tobacco
ought to remain approximately as it is,
with yield Of about $230.O0O,O00
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 $780,
1900, which is the amount OF money
thought desirable
The above program would be In bar
mony with an approved scientific sys-
tenn It viii DO away with almost all
OF the complaints that are being urged
against the present. It viii refrain
from taxing the consumption Of the
] poor.
It viii throw a far heavier burden
upon the rich. but viii not go TO the
extremes OF eonfiscation It viii OBJ
viate interference with business and
viii keep unimpaired the social pro
ductivity Of the community
It viii establish a Just balance b.
tween loans and taxes and win moi
succumb to the danger Of approaching
either the tax-only policy or the loan
| only policy. Above ali. it win keer
/ an undisturbed elastic margin, which
must be more and more heavily drawn
upon as the war proceeds
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