The labor world. [volume] (Duluth, Minn.) 1896-current, 1917-06-23
In ton> ~..:s',.s NIX: - -: t4:...,..> st II
the extraordinary burden OF taxes III
var times certain scientific principles
are definitely establlshed:-

6lC SSluO1SuSu.
How Taxes Should Be Apportioned.
"a The burden Of taxes must be
spread as FAR MS possible over the
whole commlaity so as to cause each
individual to share in the sacrifices &C
cording III his ability to pay and &C.
cording to his share in the Government.
(2) Taxes on consumption, which are
necessarily borne by the community at
large, should be imposed rs TAR as pos
sible on articles Of quasi-luxury rather
than on those Of necessity.
90 Excuses should be imposed as far
as possible upon commodities in tie
hands Of the final consumer rather
than upon the articles which serve pri-
marily as raw material for further
production.
az Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
ceipts or capital invested.
~ Taxes upon income which will
necessarily he severe Should be 10th
differentiated ard graduated. That is.
there should be a distinction between
earned and rncarncd incomes and there
should lie higher rate upon the large,
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.
g. The excess profits which are due
to the war constitute the most obvious
and reasonable source Of revenue dur
ing war times. Bit the principle upon
which these war-profit taxes are laid
must be equitable in theory and easil:
calcUlable in practice.
Tho Proposed Income Tax.
The additional income tax rs passed
by the House runs up to rate OF 60
per cent. This is sum unheard OF i'll
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 O. 81 per cent, and that
even now in the fourth year: Of the war
the Income tax does not exeeed AN
per cent.
1t could easily he shown that a tax
with rates on moderate incomes sub
stantial!y :ess than III Great Britain
and on the larger incomes about as
high. would yield only slightly less than
the $532.C30090 originally estimated in
tho House bill.
1t is to be hoped that the Senate will
reduce the total rate on the highest i'll
comes to 81 per cent. or at most to 40
per cent. and that at the same time 1t
will reduce the rate on the smaller In
GENES derived from personal or profes.
sional earnings.
" tho war continues we shall have to
depend mors and more upon tho in
como tax. Ry imposing excessive rateo
now We are not only enaanaering tho
future, but arc inviting al 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 It Eursues an erroneous principle
In imposing retroactive taxes.
(2) It selects an unjust and unwork-
able criterion, for the extess-profits tax.
(S) 1t praceeds to an unheard-ot
height in the income tax.
a. 1t impulses unwarranted burdens
upon the consumption Of the commu-
nifty.
(5) It ia calculated to throw business
into confusion by levying taxes on gross
receipts instead of upon commodities.
(6) 1t fails to make proper use Of
stamp taxes.
ca 1t follows an unscientific system
III its fat rate on imports.
81 It includes a multiplicity Of pet
ty and uniucrative taxes. the vexa tious-
ness Of which is out Of ali proportion to
the revenue they produce.
The fundamental lines on which the
House bill should Ike modified are sum-
med up herewith:
~ The amount Of new taxation
should be limited to 2250,0cO, OO0-or
at the outset to $l.5OOO00. 900. TO do
more than this would he as unwise as
1t Is unnecessary. To do even this
would he to do more than has ever
been done by any civilized Govern
ment in time of stress.
~ The excess-profts tax based upon
a sound system ought to yield about
$5o0,0oO,C0o.
g. 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. so as no.
to exceed 81 per cent. \ careful cal
culation shows that All income tax q
this kind would yield some $4jO,o0o.
900 additional.
~ The tax on whisky and Tobacco:
ought to remain approximately as it t..
with yield of about $23O,OOO.OOO!
These three taxes, together with tt4
stamp tax at even the low rate Of ths.
House bill, and with al improved au-
tomobile tax, will yield over $3.50.
100000. which is the amount of none,
thought desirable.
The above program would he in har.