The Washington herald., 1918-06-19

equitable form OF taxation which has
thus far received scant attention at
the hands of State lawmakers. but
which in the future promises to he
| widely recognized by both lawmakers
| and citizens generally.
This is the income tax system. II
is founded on the fair principle of
taxation according to ability to pay
and the amount of income men re-
ceive is taken as the basis for the
| levy against him.
Strictly speaking. there are two
sorts of income-earned and unearned.
| The former comes from the efforts Of
the citizen himself-the latter from
his investments and the work Of his
money
Manifestiy the latter class Of in
come should be taxed heavier than
| the other. for the taxpayers efforts
are not behind 1t. and it would not
| necessarily be cut OF II he were to
become too ill for active participation
in business.
General recognition OF the income
tax principle years ago in this nation
would have made 1t easier to impose
! the system upon the country now.
Moreover, 1t would have been possible
from the additional years of expert
ence and operation. TO have evolved
| a very complete formula under which
| it could be worked out with unerring
| precision in the cases OF all classes of
| persons and all individuals.
In consequence OF our disdain for
this system. there are parts of It We
must impose upon our people Just
now with more or less force. and with
the result that there are many OBJ
| jectors to the system who feel they
| are being inequitably taxed. And. in
| fact. there are apt to be some mann
I fest wrongs done in the hurried con-
struction of such a system. But. on
the whole. the system promises TO be
| generally approved because OF its
ready adaptability to the unusual con-
ditions surrounding war.
Antiquated tax systems of the coun-
! try give one the impression who re-
views them that little gain has been
made in many years. The forms of
| taxation are many and varied. Tax
! schedules in many OF the States con-
tain long lists of items which hardly
| have the least connection with the
ability of a taxpayer to bear the pub
lie burden. Scores Of articles are
listed. of a tangible and intangible
nature. which are completely forgot
ten when the taxpayers make their
accountings to the tax officials.
Acceleration in the matter of
amendment of State tax laws must
come from the Federal government.
1t is not the first time. by any
means, that such reforms have or
iginated with the larger govern
| ment. The gain will be worth
much to the States and there will be
many inequities disposed Of when
the new forms of taxation are i'm
posed.
Curiously enough the decision of
the Supreme Court by which the
Child Labor act was invalidated
| has attracted considerable attention
over the land. In very few quarters
Is 1t sustained. In fact, the pre-
dominant opinion of the land is that
the reason for which it was nulli-
fed was exceedingly puerile and
that the court can hardly expect
the decision to be generally upheld.
Justice Holmes very succinctly
pointed out the inadequacy Of the
majority opinion. He showed simply
and pointedly that the Federal gov
ernment is encroaching on no
rights Of the State when it as
sumes to forbid in interstate trans
portation the product Of any fac
tory where labor Of children of the
prohibited age has entered into the
manufacture of the product. The
one deduction which laymen natu-
rally draw from the majority opin-
ion. in fact is. "if Congress cannot
legislate in such matters what body
can? or. what powers has Congress
| anyway. if not the power to reach
just matters as these?"
Senator Borah is not satisfied
with one defeat for his open work
diplomacy proposal. He has pro-
jected another tight on the same
lines, seeking this time as the last
to bring out an Interpretation OF the
Presidents speech of January s,
which will mean the utmost pub
licity on the successive steps neces-
sary to the construction of q treaty.
We do not know Just why the
Presidents letter to the Secretary
of State is not cinsidered conclu-
sive on this point Senator Borah
has brought out all he can on this
point. in the battle which he
brought on against his proposal and
| ii seems to us. there is little to
gain, We predict that as many
: timsS - the Senator brings the