Pierre weekly free press. (Pierre, S.D.) 1889-19??, 1917-06-28

war times certain scientific principles
are definitely established:
How Taxes Should Be Apportioned.
"a The burden of taxes must be
| spread as far as possible over the
whole community so as to ench
individual to share in the sacrifices ac-
cordirg to his ability to pay and ac-
cording to his share in the Government.
90 Taxes on consumption, which are
necessarily borne BY the community at
large, should be imposed as far us 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 nsum rather
than upon the articles which serve pri-
marty as raw material for further
production.
az Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
ceipts or capital invested.
90 Taxes upon income which will
necessarily be severe should be both
IL hAa eilduilGo. LddL 10,
there should be 81 distinction between
earned and unearned incomes and there
should be a 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.
Q0 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 GO
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 wal that Great
Britain increased her income tax to the
maximum of "a per cent, and that
eve now in the fourth year of the war
the income tax does not exceed 42N
per cent.
1t could easily be shown that q tax
with rates on moderate incomes sub
s%tantially less than in Great Britain,
and on the larger incomes about as
high, would yield only slightly less than
the $685., 100000 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 81 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 profess
slonal earnings.
1T the war continues we shall have TO
depend moro and more upon the in
come tax. BY imposing excessive rates
now we are not only endangerine tho
future, but are inviting all manner of
difficulties which wen Great Britain
has been able to escape.
Conclusion.
The House bill contains other funda-
mental defects which may be summed
up as follows:
E - ~ loI odSS Oil Gi1oliCotS " lliIllJtC
In imposing retroactive taxes.
(2J 1t selects al unjust and unworli-
able criterion for the eScess-profits tax.
G) 1t proceeds to an unheard-of
height in the income tax.
az 1t imposes unwarranted burdens
upon the consumption of the commrl-
nifty.
% 1t Is calculated to throw business
into confusion by levying taxes on gross
receipts instead of upon commodities.
90 1t fails to make a proper use of
stamp taxes.
% 1t follows an u~nscientific system
in its fiat rate on imports.
(S) 1t includes a 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:
az The mount of new taxation
should be limited to $780, o0,Ooo-or
at the outset to $1,5Q0,0W,O0O. 10 do
more than this would be as unwise as
it 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-profts tax based upon
q sound system ought to yield about
$500, 100000.
81 The inconle-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, so rs not
to exceed 81 per cent. "A careful cal.
culation shows that an income tax Of
this ksnd would yield some $450,OOO,-
700 additional.
az The tax OF whisky and tobacco
ought to remain Approximately us 1t is.
with q Yield Of about So30.00O.OO0.
These three taxes, together with the
stamp tax at even the low rate of the
House bill, and with an improved au-
tomobile tar, will yield over $780,
mn mn vrhinh 10 tho q rnn,,,<.O ~ nunr