Mansfield mirror. (Mansfield, Wright County, Mo.) 1908-1957, 1917-06-28

hands NJ the final consumer rather
than upon the articles which serve pri.
marily as raw material for further
production.
IA Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross Ne
ceipts or capital invested.
G) Taxes upon income which will
necessarily he severe should be both
differentiated and graduated. That Is,
there should be a distinction between
earned and unearncd incomes and there
should be n higher rate upon the larger
incomes. 1t is essential. however, not
to make the income rate so excessive
as to head to evasion. administrative
difficulties. or to the more fundamental
objections which lave been urged
above.
QN The excess profits which are due
10 the war constitute the most obvious
and reasonable source Of revenue dur.
ing war times. But the principle upon
which these warproflt taxes are laid
must be equitable in theory and easily
calculable in practice.
The Proposed Income Tax.
The additional income tax al passed
by the House runs up to a rate Of GO
per cent. This Is a sum unheard Of in
the history Of civilized society. 1t must
be remembered that it vas 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 tax does not exceed 42h
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 $500. 100000 originally estimated in
the House bill.
1t Is to be hoped that the Senate win
reduce the total rate on the highest in
comes to 81 per cent, OF at most to 10
per cent, and that ut the same time 1t
will reduce the rate on the smaller In
comes derived from personal 0c profess
I sional earnings.
II 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 e%ndaneering the
future, but are inviting all n 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:
a. 1t pursues an erroneous principle
in imposing retroactive taxes.
(2) It selects an unjust and unwork-
able criterion for the excess-profts tax.
81 1t proceeds to an unheard-Of
height in the income tax.
a. It imposes unwarrnnted burdens
upon the consumption Of the commu-
nifty.
90 It is calculated to throw business
into confusion by levying taxes on gross
receipts instead Of upon commodities.
(6} It fails to make a proper use Of
stamp taxes.
% 1t follows an unscientiic system
in its fiat rate on imports.
81 1t includes a multiplicity of pet
ty and unlucrative taxes, the v%exatious-
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:
Q) The amount of new taxation
should be limited to $780, OO. 0OO-or
at the outset to s1,5OO,OO0,OO0. To do
more than this would be as unwise as
1t is unnecessary. To do W this
would be to do more than has eve
been done by any civilized Govern.
ment In time Of stress.
e. The excess-profts tax based upon
q sound system ought to yield about
S5OO,OOO,OO0.
81 The ineome-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, 80 as not
to exceed "a per cent, A careful cal
culation shows that an income tax OF
this kind would yield some $i50.OO0,-
mo additional. E.
az The tax on whisky and tobacco
ought to remain approximately as 1t Is.
with a yield Of about s230,O00.OOO.
These three taxes, together with the
stamp tax at even the low rate Of the
House bin, and with an improved au.
tomobiIe tax, will yield over $780,
100000, which Is the amount Of money
thought desirable.
The above program would be in har-
mony with ar approved scientific sys-
tenn. 1t will do away with almost all
Of the complaints that are being urged
against the present. It will refrain
from taxing the consumption Of the
poor.
1t will throw n far heavier burden
upon the rich, but will not go to the
extremes Of cOnfiscation. 1t will OBJ
viate interference with business and
will keep unimpaired the social pro
ductivity Of the community.
1t will establish a Just balance be-
tween loans and taxes and will not
succumb to the danger of approaching
either the tax-only policy or the loan.
only policy. Above all, 1t will keep an
undisturbcd elastic margin. which
must be more and more heavily ORA D
QLnn 40 FIN war prncac1a |