Lexington dispatch-news. [volume] (Lexington, S.C.) 1917-1919, 1917-07-25

Sk<S SAI30OIO1ud1y UOIoCo VI 1dACS Ia
war times certain scientific principles
are definitely established:
How Taxes Should Be Apportioned. \
(1) The burden Of taxes must be
spread as far as possible over the
whole community SO as to cause each
Individual to share in the sacrifices &C
cording to his ability to pay and ac-
cording to his share in the Government.
(2) Taxes on consumption, which are
necessarily borne by the community at
large, should be imposed as far as pos.
sible on articles Of quasi-luxury rather
than on those Of necessity.
(S) Excises should be imposed as fal
as possible upon commodities in the
hands Of the final consumer rather
than upon the articles which serve pri.
marily as raw material for further
production.
~ 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 viii
necessarily be severe should be both
differentiated and graduated. That is,
there should be distinction between
earned and unearned incomes and there
should be higher rate upon the larger
incomes. 1t 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.
(6) 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-proft taxes are laid
must be equitable in theory and easily
calculable in practice.
The Proposed Income Tax.
The additional income tax as passed
by the House runs up to rate OF 6O
per cent. This is 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 42A
per cent.
It 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 $532. 100000 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
viii reduce the rate on the smaller in
comes derived from personal or profes-
sional earnings. saAs-s,t
If the war continues we shall have to
depend more and more upon the in.
come tax. BY imposing excessive rates
now we are not only endanserins 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:
S. % It pursues an erroneous principle
in imposing retroactive taxes.
(2) 1t selects an unjust and UNIV ork-
able criterion for the excess-profts tax.
1t proceeds to an unheard OF
height in the income tax.
&, 1t imposes unwarranted burdens
upon the consumption of the commu-
nity
@, It Is calculated to throw business
into confusion by levying taxes on gross
re eipts instead of upon commodities.
g. 1t fails to make proper use of
stamp taxes.
@ It follows an unscienti6c system
in it's fiat rate on imports.
(S) It includes a multiplicity Of pet
ty and unlucrative 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:
(D The amount Of new taxation
should be limited to 250.OOO.O00--or
at the outset to S1.5000O0.0OO To 90
more than this would be as unwise as
it is unnecessary. To do even this
would be to do more than has ever
been done by any civilized Govern
mnnt in time Of stress.
(N The eXcess-profitS tax based uron
a sound system ought to yield about
$5OO.oO0.OOO
3) The income-taX schedule ought to
De 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 not
TO exceed 81 per cent \ careful cal
culation shows that an income tax Of
this kind would yield some $450.G20.-
600 additional