Mountain advocate., 1917-06-15


ore definitely established;
How Taxes Should BE Apportionsd.
"a The burden of taxes must be
spread as far as possible over the
whole community so as to cause each
individual to share in the sacrifices ac-
cording 10 his ability TO pay aud &C.
corting TO his share in the Government.
90 Taxes ON consumption. which are
necessarily borne by the community at
large, should he imposed as far nv pos
sible on articles OF quasi-luxury rather
than on those Of necessity.
60 Excuses should be imposed as far
as possible upon commodities In the
hands Of the tinnl consumer rather
than upon the articles which serve pri-
marily as raw material for further
production.
az Taxes upon business should he
imposed as far az possible upon net
earnings rather than upon gross re-
celpts or capital invested.
(Jl Taxes upon income which will
necessarily he severe should lie both
differentiated and graduated. That is.
there should he n distinction between
earned and uncarned incomes and there
should lie higher rate upon the larger
incomes. II 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.
O) The excess profits which IRE 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
calculnblc in practice.
The Proposed Income Tax.
The additional income tax us passed
by the House runs up to rate OF 20
per cent. This is sum unhcard of in
the history OF civilized society. 1t must
be remembered that 1t 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 421a
per cent.
II could easily be shown that a 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 S532 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, OF 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.
" tho war continues we shall have to
depend more and more upon tho in
come tax. BY imposing excessive rates
now we are not only endansering 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:
~ IL pursues an erroneous principle
In imposing retroactive taxes.
C2) 1t selects an unjust and unwork-
able criterion for the excess-profits 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.
90 1t is calculated TO throw business
into confusion by levying taxes on gross
receipts instead OF upon commodities.
(6) 1t fails to make a proper use OF
stamp taxes.
a. IL follows an unscienti6c system
in its fiat rate on imports.
Isl 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:
a. The amount OF new taxation
should be limited to JO.OO0.OOO-or
At AhN OutoCt " SAfoSSO'ooS.OoV uO
more than this would be as unwise as
1t IL unnecessary. To do even this
would be to do more than has ever
been done by any civilized Govern
ment I'm time Of stress.
(2 The excess-profits tax based upon
a sound system ought to yield about
$500 100000
(3l The mcome-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 34 per cent. A careful cal |
culatiop shows that an income tax Of |
this kind would yield some s450000.-
900 additional
az The tax on whisky and tobacco
ought to remain approximately as it Is.
with yield of about s230,O00,OO0.
These three taxes. together with the