Malvern daily record., 1917-06-11
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 (continued from page one.) 1 Tn considering tie anportionment q ] the extraordinary burden Of taxes in war times certain scientific principles are definitely established:
 How Taxes Should Be Apposticned. ] Q The burden of taxes must bc 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- eording to his share in the Government.
 t2l Taxes on consumption, which are necessarily borne by the community as large, should be imposed as far as pos- sible on articles of quasi-luxury rather than on those of necessity. 1 f3) Excises should be imposed as far 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 1 production.
 l (4) Taxes upon business should be imposed as far as possible upon net earnings rather than upon gross re ceipts or capital invested. l (5) Taxes upon income which will necessarily be severe should be both differentiated and graduated. That is, l there should be a distinction between earned and unearned incomes and there should be higher rate upon the larger incomes. It is essential, however, not l to make the income rate so excessive as to lead to evasion, administrative difficulties, or to the more fundamental objections which have been urged l above
 1 (O 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 calcuiable in practice. The Proposed Income Tax. The additional income tax as passed by the House runs up to rate of 60 per cent. This Is sum unheard of in the history of civilized society It must l be remembered that it was only after the first year of the war that Great Britain increased her income tax to the maximum of 34 per cent, and that even now in the fourth year of the war the income tax does not exceed 425s l per cent
 l 1t could easily be shown that a tax l with rates on moderate incomes sub stantially less than In Great Britain, l and on the larger incomes about as high. would yield only slightly less than the $532, COG, 900 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 34 per cent, or at most to 40 per cent, and that at the same time it will reduce the rate on the smaller in comes derived from personal or profes- sional earnings.
 1 If the war continues we shall have to l depend more and more upon the in- como tax. By imposing excessive rates now we arc not only endangering the future, but are inviting all manner of difficulties which even Great Britain.
 
 Conclusion.
 The House bill contains other funda- mental defects which may be summed up as follows:
 CD It pursues an erroneous principle In imposing retroactive taxes | (2) It selects an unjust and unwork- able criterion for the excess-proats tax. 1 (3) It proceeds to an unheard-of height in the income tax. (4) It imposes unwarranted burdens upon the consumption of the commu- nity
 (5) It is calculated to throw business Into confusion by levying taxes on gross receipts instead of upon commodities. 1 (6) It fails to make proper use of stamp taxes.
 @ It follows an unscientific system In its flat rate on imports
 (8) It includes multiplicity of pet l ty and unlucratiye taxes, the vexatious- ness of which is out of all proportion to the revenue they produce. 1 1 The fundamental lkaes on which the House bill should be modified are sum- med up herewith
 1 (D The amount of new taxation should be limited to $1 ,250, GOO, GOO or at the outset to $1, 1,500. 100000 To do more than this would be as unwise as 1t is unnecessary. To do even this would be to do more than has ever been done by any civilized Govern | ment in time of stress @ The excess profits tax based upon q sound system ought to yield about $500, 100000.
 (0 The income-tax schedule ought to be revised with a lowering of the rates on earned incomes below $10,00O, and with an analogous lowering of the rates on the higher incomes, so as not to exceed 34 per cent. A careful cal culation shows that an income tax of this kind would yield some S45O OOO.