The Delta independent., 1917-06-22

are definitely established:
How Taxes Should Be Apportioned.
% The burden Of taxes must be
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 ac-
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-
marjly as raw material for further
production.
30 Taxes upon business should be
imposed as far as possible upon net
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 q distinction between
earned and unearped incomes and there
should be 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.
90 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-proit 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 rate of 60
per cent. This is a sum unheard 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 421s
per cent.
1t 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. 900. 600 originally estimated in
the House bill.
II Is to be 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 1t
will reduce the rate on the smaller in
comes derived from personal or profess
sional earnings.
" the war continues we shall have to
dspsnd more and more upon the in
come tax. BY imposing excessive rates
now we are not only endanoerins 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:
Ql 1t pursues an erroneous principle
in imposing retroactive taxes.
(2) 1t selects an unjust and unwork-
able criterion for the excess-profts tax
81 II proceeds to an unheard-of
height In the income tax.
a. 1t imposes unwarranted burdens
upon the consumption Of the commu-
nifty.
C5l 1t II calculated to throw business
into confusion by levying taxes on gross
receipts instead of upon commodities.
G) 1t fails to make a proper use Of
stamp taxes.
a. 1t follows an unscientific system
in its fiat rate on imports.
81 II includes 4 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 bin should be modified are sum-
med up herewith:
O The amount OF new taxation
should be limited to 81 80. 900. .OOo-or
at the outset to 81 800. 100000. To do
more than this would be as unwise as
1t 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.
C2) The excess-profits tax based upon
a sound system ought to yield about
S5OO,0OO.OOO,
G) The income-tax schedule ought to
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 34 per cent. A careful cal
culatlon shows that an income tax OF
this kind would yield some S450,O0o,-
400 additional
a. The tax on whisky and tobacco
ought to remain approximately as 1t is.