Metropolis weekly gazette. (Metropolis, Ill.) 1???-19??, 1917-06-15

Five Reasons Why Excessive Taxes at
The Outset of War Are Disadvantage
eus--0reat Britain Exsmpls Worthy
] of Enulation-Hov the Taxes Should
BE Apporsionsd.
BY EDWIN n. \. sELioMAN.
Mcvlckar Professor OF Political Econ
omy. Columbia University.
On May D. 1917. tho House Of Rep
resentatiyes passed an net ITO provide
revenue to defray war expenses aud
for other purposes" In the original
bill rs presented by the Committee OF
Ways aud Means. the additional reve.
nue. to be derived was estimated at ST..
Si0.420.0o0. The amendment to the Ia.
come tai. which was tackled 90 10 the
bill during the discussion IN fhc House.
was expected to yield another xso.0lD.,
600 or SJo.00oooo
In Disgusting the House bill. Two
problems arise:
!. How much should be raised by
/ taxafioni
H. In whit manner should THIS sum
be raisedg
l. How Much Should De Raised By
Tasation7
How was the figure of $3.50 0oo 600
arrived at The answer IL simple. When
the Secretary of the Treasury came TO
estimate the additional war expenses
for the year i0is-iA be calculated that
they would amount 10 some S6.gttl..
Ia. % .sa
be allotted to the allies. and S3Cei..
ooo.0oo was to be utilized for the so.
mesiie purposes. Thinking that IL
would be fair proposition to divide
this latter sum between loans and
taxes. be concluded that the amount
90 be raised BY taxes was 81 .SHiu00..
COO.
| There ARE two extreme theories. each
OF which may be dismissed With s,aur
courtesy. The one f. that all wRr ex-
penditures should be betrayed By loans.
and the other Il that all war expendl'
lures should be defrayed 10y taxes.
Each theory L. untenab'e
IL 10 indeed true that The BURDENS of
the war should be borne by the pres
ent rather thnu the future generations:
but this does net mean that they SHOULD
be borne BIZ this years taxation,
Meeting all var expenses b. taxation
makes the taxpayers In one or fvo
years bear the burden ~ benefits that
ought 20 be distributed at least over u
decade within The same generation.
In the seeond place. when esleBdl.
4 81. -
preseniday warfare. the x-oply pol.
Icy would require more than the total
surplus OF social income. Were ihl.
absolutely necessary. the ensuing baY-
o In tho economic life Of the evnimnnl-
~ would have TO he endured. But
1 where the disasters are SO great aud
| Of the same time so unnecessary. the
taIenly policy may be declared Inn
practicable.
Secretary MeAdoo bad the right ia
stinct aud highly commendable cour-
/ age In deciding that substantial por.
ton. at least. OF the revenues should
! lie derived from taxation. But when
be hit upon the plan OF 800 per cent.
/ that Is. OF raising one-balf of all do
I
/ question arises whether he did not go
too far.
The relative proportion of loans to
/ taxes N after Nil purely business
| proposition. Not 10 rely TO large e..
tent oh loans at the outset Of war II
. mistake.
Disadvantages Of Excessive Taxes.
| The disadvantages Of excessive taxes
ct the outset Of the war are as follows
| j. Excessive taxes on consumption
will cause popular resentment.
:. Excessive taxes on industry will
disarrange business. damp enthusiasm
and restrict the spirit OF enterprise at
the very time when the opposite Is
necsled.
3. Excessive taxes on incomes viii de-
plefe the surplus available for invest.
ments aud Interfere with the placing OF
the enormous loans which will lie nsseS-
szry la any event.
4. Excessive taxes on wealth will
cause serious dlmInuiion OF the IN.
comes which are at present largely
drawn upon for the support OF educa.
hohai aiiu pulihhtnJopic enterprises.
Moreover. these sources OF support
would be dried up precisely at the time
when the need would lie greatest.
8. Excessive taxation ut the outset Of
The war will reduce tho elasticity avail
able for the Increasing demands thai
ere soon - come.
Great eritain's Policy.
Take Great Britain as an example.
During the first year OF the war she
increased taxes only slightly. In order
10 keep industries going ne top notch.
During the second year sbc raised By
new taxes only 0 per cent. OF her war
expenditures. During the third year
she levied by additional taxes (orer
aud above the pre-war level only
slightly more than II per cent. Of her
var expenses.
II we should attempt IN - ~ much
In the first year OF the war M Great
Britain did In the third year II would
suf3ce TO raise by taxation $1::50.OO0.-
no III I'm order 20 he nbsol ufeiv ON