The Ordway new era., 1917-06-22
THE oRDwAY NEW ERA

| How Taxes Should Be Apportioned.
a. The burden of taxes must lie
spread as far as possible over the
whole community SO as to carse each
individual to share in the sacrifices ac'
cording to his ability to pay and nc.
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.
'narily as raw material for further
production.
iiD Taxes upon business should be
IMPOSED as far as possible upon net
earnings rather than upon gross re-
ceipts or capital invested.
'Ji Taxes upon income which will
ne cSsarily be severe should lie both
differentiated and graduated. That is,
There should be a distinction between
rarued and uncarned incomes and there
should be higher rate upon the larger
ncomcS. II Is essential however. not
10 make the income rate so excessive
AS to lead to evasion. administrative
difficulties. or to the more fundamental
hj rtiuns which have been urged
ubove
,1, 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-pro6t taxes are laid
must be equitable in theory and easily
'alculable in practice.
Tho Proposed Income Tax
The additional income tax as passed
by the House runs up to a rate OF W
per cent. This is sum unheard of in
the history of civilized society II must
he remembered that 1t was only after
the first year of the war that Great
Britain increased her income tax TO the
ma Nimum of "a per cent. and that
even now In the fourth year of the war
the income tax does not exceed 42la
per cent.
II could easily be shown that a tax
With rates on moderate incomes sub
%tnntially less than In Great Britain.
and on the larger incomes about ns
18th. would yield only slightly less than
-" $:.:;;::. o0o.n00 originally estimated In
he House bill
II is to he 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 it
will reduce the rate on the smaller in
"omes derived from personal or profes-
'lonal earnings.
II tire war continues we shall have to
tc2end more and more upon the in
come tax. BY imposing excessive rates
now we are not only endaneering tho
'uture, 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:
uD 1t pursues an erroneous principle
in imposing retroactive taxes.
(2l II selects an unjust and uuworii-
able criterion for the excess-profts tax
81 1t proceeds to an unheard-of
height in the income tax.
"a 1t imposes unwarranted burdens
upon the consumption Of the commu-
nifty
%, 1t is calculated to throw business
mt" confusion by levying taxes on gross
receipts instead of upon commodities
D, 1t fails to make proper use of
stamp taxes
ca 1t follows an unScientihc system
n its tlat rate on imports.
IS, 1t includes multiplicity of pet
iy and unlucrative taxes. the vexntious-
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:
a. The amount Of new taxation
should be limited to S1.25O. 900. .OOO-or
at the outset to S1.5OO0OO.OOO To 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-profits tax based upon
sound system ought to yield about
S50O.O0O.OO0.
C3I The income-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 as not
TO exceed "a per cent A careful cal
"ulation shows that an income tax OF
this kind would yield some $45OOOO-
10 additional
A The tax on whisky and tobacco
uu''ht to remain approximately as 1t Is.
Nth Sield Of about $230,OO0,OOO.
These three taxes, together with the
~ianl, tax at even the low rate of the
House bin. and with an improved au-
tomohile tax, will yield over 81 ,250,-