Roanoke Rapids herald. [volume] (Roanoke Rapids, N.C.) 1914-192?, 1917-06-22


as possible upon commodities In the
hands of the final consumer rather
than upon the articles which serve prt-
marty 40 raw material for further
production.
(4) Taxes upon business should be
imposed as far as possible upon mel
earnings rather than upon gross re-
ceipts or capital invested.
% Taxes upon income which will
necessarily be severe should be both
differentiated aid graduated. That Is,
there should be distinction between
earned and uncarned incomes and there
should he a higher rate upon the larger
incomes. II II 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.
W 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.proht taxes are laid
must be equitable In theory and easily
calculable In practice
Tho Proposed Income Tax.
The additional income tax as passed
by the House runs up to n rate OF W
per cent This IL Il sum dnbeard OF In
the history OF civilized society. II 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 81 per cent, and that
even now IN the fourth year Of the war
the income Tux does not exceed AN
per cent.
II could easily be shown that 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 S532 100000 originally estimated In
the House bill.
II Is TO be hoped that the Senate will
reduce the total rate on the highest In
comes to "a per cent, or Mt most to 40
per cent. and that at the same time 1t
will reduce the rate on the smaller In
comes derived from personal or profes.
sional earnings.
N the war continues we shall have 10
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 he summed
up as follows:
IN Ii pursues an erroneous principle
In imposing retroactive taxes.
(2I 1t select, an unjust and unwork-
able criterion for the excess-profits tax
49, II proceeds to an unheard-of
height In the income tax.
"a 1t imposes unwarrantcd burdens
| upoH tHe tohouhption Vi thc Noh'""
nifty.
% II IL calculated to throw business
into confusion by levying taxes on gross
receipts instead OF upon commodities
g, 1t fails to make a proper use OF
stamp taxes.
a 1t follows an unscientific system
In Its fat rate on imports.
~ 1t includes q multiplicity of pet
ty and unlucratlve 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.
OD Tie amount OF new taxation
should be limited to S1,250000 00O-or
at the outset to S1,5O00O0000. To do
more than this would he as unwise as
1t IL unnecessary. To do even this
would be to do more than has ever
been done by any civilized Govern
ment In time or stress.
~ The excess-profits tax based upon
a sound system ought to yield about
s50O,OOO,0OO.
81 The income-tax schedule ought to
be revised with lowering OF the rates
on earned incomes below $4,000, and
with an analogous lowering OF the
rates on the higher incomes, so as not
to exceed - per cent. A careful cal
cuation shows that IN income tax OF
this kind would yield some $4,000.
900 additional
"a The tax on whisky and tobacco
ought to remain approximately as 1t Is,
with a yield OF about $3.50, 100000.
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 sl,25O.-
100000. which Is the amount Of money
thought desirable.
The above program would be IN har-
mony with an approved scientific sys
ten. 1t will do away with almost all
Of the complaints that are being urged
against the present 1t will refrain
from taxing the consumption OF the
poor
II will throw far heavier burden
upon the rich. but will hot 20 to the
extremes OF conflscation. t will OBJ
yiate interference with buslH ess and
will keep unlmpalred the so, 'al Tro-
ductivity OF the community.
1t will establish just balance be-
tween loans and taxes and viii not
succumb to the danger Of approaching
other the tax-only policy or the loan
only policy. Above all. 1t will keep
90 mdisturbed elastic margin, which
must be more and more heavily draw
upon as the war proceeds.