New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-02

/ CltdI iltl ltdISCu pi'hb VI N''''N'
cially employed property.
Simple as all this is, so far az the
reasoning goes, it arrives at the
heart Of the problem as to what the
/ taxes of nation at war should be
and whether or not to issue bonds fol
/ the larger part of the costs. Clearly
the taxes of a nation should he levied
upon the working wealth, the bust.
ness capital. Just as clearly, even
these taxes should he as light as pos.
sible.
The True Slogan
In War Finance
The men who talk a fifty-ffty pro-
gramme as between taxes and bonds
have not thought out the problem
from the economic point Of view and
in the light Of economic principles. |
40 not believe that one politician or
statesman or publicist in hundred
deliberately sets out a programme
that is certain to impoverish himself,
his neighbors, his country and his
heirs; the trouble is that most Of the
men who advocate high taxes and
relatively small bond issues in war
time are deceived by the cry that no
generation has the right to burden
the next. The true slogan is that no
generation has the right to impair
needlessly the capital that It might
hand dopn to its heirs. Taxes will
impair capital and labor both as
surely as the guns of the besieger
destroy city buildings. Heavy and
unfair taxes destroy families in
homes as surely as poison gas de-
stroys squads in the trenches.
It will not serve to ask men to use
common sense in this matter, for it
lies outside the range of common ex-
perience. But the similar situation
in private life will help to an under
standing.
The man worth hundred thou
sand dollars who sees a new enter
prise that looks to him promising
may DO one or the other Of these two
things-sell more or less Of his prop
crty, or borrow, using his present
property as security. When Napo-
leon needed millions for the army
that was to win Austerlitz he had
two courses before him-to sell
Louisiana or to borrow, which, for a
military campaign. he never once
aid. Therefore, he sold Louisiana.
In need Of SAY fifteen billion dol
lars this fiscal year for the war, this
ration may either borrow the amount
from its own citizens. thereby leav-
ing all their capital. virtually intact,
or it may levy several billions Of new
taxation, thereby to an cent reduc-
ing net private incomes. Or course,
so vast Is the reserve power of a
modern nation to toll harder and
thereby TO produce more annual
wealth, that a long, long time may
| intervene before there is any posi-
/ tive impairment of national pro-
/ ductlve wealth IN total. Whether the
three years of the war so far in
France have, through taxation, even
yet actually impaired the total of the
wealth of that part of her lands not
overrun by the Germans | will not
venture to guess. But that six years
Of such war taxation would so i'm
pair her working properties and
| funds probably every economist and
statesman would agree.
4 nation that can borrow ten
billion dollars at 81 per cent-per.
haps the outside limit of what we
can do on such a rate-is choosing
whether or not to raise by taxation
/ that amount or to raise by taxation
now the interest upon IT, which would
I he $3.50, 100000, or but one-twenty.
eighth Of that amount. A nation with
/ perhaps one hundred and fifty
billions OF working wealth in facto.
ries, farms and banks would very Sc.
riously feel an immediate levy OF
I ten billions in taxation. but would
scarcely feel the levy Of the bond in.
/ terest. That there are political IS.
poets 20 the proposition to establish a
vast bondholding class IN America
any one can perceive, but It IS profit.
able to consider this first solely in
the economic phase. II is. however
worth noting as one proceeds, that
there are political dangers also in De.
NeiOplng a vast income tax collect
ine department Of the national gov.
eminent as the undesirable alterna.
tive to the probably undesirable for
mer alternative Of a bondholdlnG
class We have set out TO raise elgh,
hundred million dollars annually
from income taxes, and il seems e
he tia Plan Of many OF our national
legislators to increase ever these