The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1917-06-19

III Inc UurueD OF taxes must ne
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.
(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.
90 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.
t4) Taxes upon business should be
imposed as far as possible upon net
earnings rather than upon gross re-
celpts or capital invested.
90 Taxes upon income which will
necessarily be severe should be both
differentiated and graduated. That Is.
there should be a distinction between
earned and unearned incomes and there
should be IA higher rate upon the larger
incomes. Ii IN essential, however. not
to make the income rate so excessive
as to lead to evasion. administrative
difficulties. or 10 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 rum up to a rate OF 60
per cent. This is a sun unheard OF in
the history Of civilized society 1t must
be remembered that it was only after
the first year of the wal 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 42la
per cent.
Ii could easily be shown that a tax
with rates on moderate incomes sub
stantially less than I'm Great Britain.
and on the larger incomes about as
high, would yield only slightly less than
the $500, 200. 900 originally estimated In
the House bill.
1t is to be hoped that the Senate will
reduce the total ate on the highest in
comes to "a per cent. or at most to 40
per cent, and that at the same time IL
will reduce the rate on the smaller in
comes derived from personal or profess
slonal earnings.
III the war continues we shall have to
depend more and more upon the in
cone 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 bin contains other funda.
mental defects which may be summed
up as follows
Cd IL pursues an principle
In imposing retroactive taxes.
C9 1t selects an unjust and unwork-
able criterion for the excess profits tax.
tot II Dlotttos W un hiiltdib- VI
height In the income tax.
"a 1t imposes u~nwarranted 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.
90 Ii fails to make a proper use or
stamp taxes.
ca II follows an unscientific system
in its flat rate on imports.
49, Ii includes a multiplicity Of pet
~ and u~nlucrative 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:
ID The amount of new taxation
should be limited Il 81 1850, 00O.000-or
Mt the outset to $1,000, 900. 0OO 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.
(l The excess-proits tax based upon
a sound system ought to yield about
$4,000 900
(3) 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
rulation shows that an income tax OF
this kind would yield some $450.0OO.-
100 additional
"a The tax on whisky and tobacco
eught to remain approximately as 1t Is
With a yield of about 100000 900.
These three taxes, together with the
'tamp tax at even the low rate of the
House bin, and with an improved au'
tomobile tax, will yield over $1,250,
10000, which Is the amount of money
thought desirable.
The above program would be I'm ha r.