The Dermott news. (Dermott, Ark.) 1910-1977, 1917-06-14

the extraordinary burden of taxes ir
war times certain scientific principles
are definitely established;
How Taxes Should Be Apportioned.
"a The burden of taxes must he
spread as far as possible over the
whole community so MS to cause each
individual to share in the sacrifices ac.
cording to his ability to pay and &c
cording to his share In the Government
CD Taxes on consumption, which are
necessarily borne by the community al
large, should be imposed as fur as pos
sible on articles of quasi-luxury rather
than on those of necessity.
go Excuses 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.
(4) Taxes upon business should be
earnings rather than upon gross re
ceipts or capital invested.
~ Taxes upon income which will
necessarily be severe should be both
differentiated and graduated. That is
there should be a distinction between
earned and unearned 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 lead to evasion, administrative
difficulties. or to the more fundamental
objections which have been urged
above.
60 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-protit taxes are laid
must be equitable in theory and easily
calculable I'm practice.
The Proposed Income Tax.
The additional income tax as passed
by the House runs up to rate OF u
per cent This is sum unheard Of in
the history of civilized society. 1t must
be remembered that it was only afteI
the first year of the war that Great
Britain increased her income tax to the
maximum Of "a per cent, and thai
even now In the fourth year of the wal
the income tax does not exceed 42h
per cent.
1t could easily be shown that q 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 thar
the $532, 100000 originally estimated In
the House bill.
1t is to be hoped that the Senate viii
reduce the total rate on the highest in
comes to "a per cent. or at most to &C
per cent, and that at the same time II
will reduce the rate on the smaller IN
comes derived from personal or profes
sional earnings.
" the war continues we shall have &c
depend more and more upon the in.
come tax. BY imposing excessive rates
now We are not only endanosring 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 DO summed
up us follows:
(D 1t pursues an erroneous principle
in imposing retroactive taxes.
(2) 1t selects an unjust and unwork.
able criterion for the profits tax
(S 1t proceeds to an unheard-ot
height in the income tax.
"a 1t imposes unwarranted 0Irdens
upon the consumption Of the <bmmu
nifty.
% 1t Is calculated to throw business.
into confusion by levying taxes on gross
receipts instead Of upon commodities.
90 1t fails to make proper use OF
stamp taxes.
@ 1t follows an unscient1fic system
in its fiat rate on imports.
81 1t includes a multiplicity OF pet
ty and unlucrative taxes, the vexatious
ness of which is out of all proportion tt
the revenue they produce.
The fundamental lines on which the
House bill should be modified are sum
med up herewith:
% The amount OF new taxation
should be limited to 81 ,25o. 0.0OO-oi
at the outset to Sl.500,000,oo0 To dc
more than this would be as unwise al
1t Is unnecessary. To do even this
would be To do more than has even
been done by any civilized Govern
ment in time OF stress.
~ The eNcess-protits tax based upon
sound system ought to yield about
$500. 100000
ca The ineome-tax schedule ought &c
he revised with lowering of the rates
on earned incomes below $4,000, and
With an analogous lowering OF the
rates ON the higher incomes. so as not
to exceed "a per cent A careful cal
culation shows that an income tax OF
this kind would yield some $3.50. 600.
600 additional
a. The tax on whisky and tsbacc,
ought To remain approximately as 1t Is
with yield OF about $3.50. 600
T1,ncs On tnnafhAr xx.tfl, he