The Leavenworth echo. [volume] (Leavenworth, Wash.) 1904-current, 1917-06-22

How Taxes Should Be Apportioned.
| "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 to his ability to pay and ac-
| cording to his share in the Government.
! 90 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.
go Excuses should be imposed as far
as possible upon commodities in the
| hands of the final consumer rather
\ than upon the articles which serve pri-
marily as raw material for further
| production.
"a 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 distinction between
earned and unearned incomes and there
| should be a 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.
(6) The excess profits which are due
A. fha oh VII Ia
and reasonable source of revenue dur
| ing war times But the principle upon
which these war-proft 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 a rate OF 90
per cent. This is sum unheard OF In
the history of civilized society. 1t must
| be remembered that it 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 Az
| per cent.
1t could easily be shown that 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 1852. 900, 900 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 "a per cent or at most to 4O
per cent, and that at the same time 1t
will reduce the rate on the smaller In
comes derived from personal or profes'
sional earnings.
II the war continues we shall have to
| depend more and more upon the in
come tax. BY imposing excessive rates
now we are not only endangering 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:
| % 1t purSues an erroneous principle
| in imposing retroactive taxes.
% 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.
% 1t is calculated to throw business
| into confusion by levying taxes on gross
| receipts instead of upon commodities.
Co 1t fails to make a proper use OF
| stamp taxes
ca 1t follows an unscientific system
| in its fiat rate on imports.
(S) 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 S1.250,OOO,O 00-or
at the outset to $1,500,00O00O 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-protits tax based upon
a sound system ought to yield about
$4,000, 600
81 The income-taX schedule ought to
be 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 81 per cent. A careful cal
culation shows that an income tax of
this kind would yield some $3.50. o00,-
900 addit NAL.
a. The tax on whisky and tobacco
ought TO remain approximately as 1t is,
with yield of about $230,0000 900
These three taxes, together with the
stamp tax at even the low rate Of the
House bill and with an improved au-
tomobile tax, will yield over $780,
100000. which is the amount Of money
thought desirable.
The above program would be in har-
mony with an approved scientific sys-
TEN. 1t will do away with almost all
Of the complaints that are being urged
against the present. 1t will refrain