The Washington herald., 1917-05-03
war Finance.

tChica9o TnouneJ
The difficulties OF framing war taxa
ton SO that it will not defeat its own
ends are very great Unless it is skill
fully formulated and adjusted II is
likely to bring about economic depres-
sion when there ought to be the great
est economic energy and accomplish In
Justice and confusion when there ought
to be harmony. This every one will
realize would be a calamity not only in
this instance, a national calamity, but
also a worldwide calamity. America
must conserve and exert her powers to
the utmost.
The plans of the Ways and Means
Committee have not yet been perfected.
They are still before subcommittee.
But such intimations as we have sug-
gest there is a tendency to make Ameri-
can manufacturing carry the full bur-
den of the war while leaving American
agriculture hardly touched.
Between the proposed Increases Of the
income supertax and the excess profits
tax and the corporation, the man who
has put his money into capltaIizing busi-
ness will carry a heavy load. The man
who owns a profitable farm will get Off
easily.
Compare the cases Of the business mar
and farmer of equal means. The liv-
ing of the farmer and his family large
ly comes from MS lanu. Inc business
man pays for all his and at very high
prices in war time. But what the bust
ness man pays out in living expenses
Is not deducted from the total he must
pay income upon, unless the amount
comes within the exemption. This ex-
emption II is proposed to reduce to 81
900 or $500. The farmers living, how
ever, is not counted as income.
A salaried man with a gross income
- f,I
tion of l,50o. He will pay 4 per cent on
$500. But his net income-that is, his
surplus after he has paid for the sub
sistence which the farmer gets from his
farm, may be. under war conditions,
nothing.
A farmer with an income OF 5000 will
likewise pay per cent on $500, but this
payment is nearer his net income by
the cost Of the material he consumes
from the farm which is not counted for
income taxation at all.
The salaried man is taxed for income
on the food he and his family eat The
farmer Is not.
The excess profits tax, which It Is so
popular in some quarters to declare
should pay for the war, discloses a
similar inequity.
A man has a farm bringing in an in
come Of $4,000. He pays his Income tax
Oh lIe DdslS dDONe ueSCTlDeO, OeOuCIlnB
the produce he consumes from the sum
taxed. In computing the excess profits
tax deductions are similarly made for
produced fertilizer and other items
which are really expenses, which in the
case Of a manufacturing business are
not deductable.
A man with money invested in manu-
featuring will pay a heavy personal In
come tax, a heavy excess profits tax,
and a corporation tax.
This seems to be on the theory that
the manufacturing and business class
will profit unduly by war activities and
ought to carry the burden almost alone.
Yet the farmer with wheat at $40, corn
at $1.50, and all his production on the
highest price levels is easily the great
est beneficiary OF war conditions in the
country.
The evil Of excessive taxation is the
suppression OF industry and the conso-
quent decrease of production at a time
when It is imperatively necessary that
production should be at the maximum.
.
The Eagle Begins It's Flight.
Bunalo NswsJ
The structure of AmericanIsm stands
firmly now upon solid rock.
The treacherous sands, that have seep-
ed from under since America has been
building for war, have all disappeared
washed away by public interest and
genuine patriotism-and this morning
we have the nucleus of a two-million
army.
We have a sword in our hands, not a
reed
We have power not intangible hopes.
We stand upon rock. not quicksand.
Our enemy has been struck a harder
blow than could have been delivered in
Flanders.
Germany's query since war began, ''Is
not the strong .virile nation in the new
world too much absorbed in commercial
ism to send its men to war;" is answer
ed firmly in the negative, with the voices
of hundred million people behind it TO
give It volume.
Congress was neither weak nor emo
tional The hopes of Germany, which