The Holly chieftain., 1917-07-06

snSntIy more tnan IL per cent. OF nef
war expenses.
II we should attempt to do as much
in the first year of the war as Great
Britain did In the third year it would
suffice to raise by taxation $l,2J0,O00,
COO II. in order to be absolutely on
the safe side, it seemed advisable to
increase the sum to 81 SOC. .OOO.OOO, this
should. in our opinion. be the maxi
mum
In considering the apportiOnment Oh
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 c7er the
whole community 80 as to cause each
cording to his ability to pay and &C.
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.
(3) 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
production.
~ Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
ceipts or capital invested.
t5) 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-profit 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 GU
per cent. This is a 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 Az
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. 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 "a per cent. or at most to 40
per cent, and that at the same time 1t
will reduce the rate on the smaller in
comes derived from personal or profess
sional earnings.
" 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 sndansering 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:
~ It pursues an erroneous principle
In imposing retroactive taxes.
: (2) 1t selects an unjust and unwork.
able criterion for the ex cess-profits tax.
81 It proceeds to an unheard-of
height In the income tax.
~ 1t imposes unwarranted burdens
upon the consumption of the commu-
nifty.
o. 1t is calculated to throw business
into confusion by levying taxes on gross
receipts instead Of upon commodities.
(0 It fails to make a proper use Of
stamp taxes
CO 1t follows an unscientific system
in its flat rate on imports.
(S 1t includes 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:
Q) The amount of new taxation