Essex County herald. [volume] (Guildhall, Vt.) 1873-1964, 1917-06-08

In considering the apportionment of
the extraordinary burden of taxes in
war times certain scientific principles
are definitely established
How Taxes Should Be Apportioned.
% 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 ac-
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.
81 Excuses should be imposed as far
as possible upon commodities in the
hands of the final consumer rather
I than upon the articles which serve pri-
marily as raw material for 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 will
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 q rate of 60
per cent. This is q 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 4213
per cent
1t 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,O00,O00 originally estimated in
the House bill.
1t is to be hoped that the Senate will
reduce the total rate on the highest in
comes to "a per cent. or at most to DO
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.
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 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:
% 1t pursues an erroneous principle
in imposing retroactive taxes.
(2) 1t selects an unjust and unwork
able criterion for the excess-profts tax
= Trn0nn1c tn hoo r1 nj
height in the income tax.
~ 1t imposes unwarranted burdens
upon the consumption of the commu
nifty.
(5l 1t is calculated to throw bushes
into confusion by levying taxes ON gros
receipts instead of upon commodities.
90 1t fails to make a proper use o
stamp taxes.
(0 1t follows an unscientificSs system
in it's fiat rate on imports.
) (S) 1t includes a multiplicity Of pet
ty and unlucrative taxes, the ve.Satious
ness of which is out Of all proportion t
the revenue they produce.
The fundamental lines on which tn
House bill should be modified are~sum
med up herewith:
a. The amount of new taXat1o
should be limited to 1,25Q,OO0O00-o
at the outset to $1,500,000O00. TO d
) more than this would be as unwfse a
: it is unnecessary. To- do even thi
l would he to do more than has eve
been done by any civilized Cover
ment in time of stress
(2l The excess rofitsttax based tupo
a sound system ought to yield abou
5 $50O,OOOOOO.
81 The income tax schedule ought
be revised with lowering of the rate
= on earned incomes below $4,000, an
I with an analogous lowering of tn
rates on the higher incomes. so as nc
to exceed "a per cent A careful ca
culation shows that an income tax c
: this kind would yield some $450.O0O
> 600 additional.
= a. The tax on whisky and tobacc
ought to remain approximately asst il
with yield of about $230000,000.
These three taxes. together withs til