Evening journal., 1918-09-13
Killing The Liberty Bond Market
With Unsound and Unjust Taxation
lFrom the New York Sun.l

decelYed as tc the real percentage
Of war cost which 1t is trying to meet
with direct taxation?
In the first place, when the govern
ment talks Of meeting our war expen-
ditures One-thlrd with taxes and two
thirds with loans, II does not state the
facts. While Ss,OOO,OOO,OOO Of taxes
IS One-third Of S24OOO,OOO,OO0 TO be
raised, some S6,00OOOO,OOO Of that
S24,O0O,O00O00 will go to the Allies
as loans. That S6,0OO,OOO,OOO Is an
investment not an expenditure, Of the
United tSates government. The prin-
cipal, unless Germany wrecks the
Allies will be returned to the United
States government. It pays interest.
II pays the government more interest
than the government pays our Lib
erty bond subscribers. Clearly, money
borrowed from our own people 10 be
lent TO the Allies will not have TO be
paid for by our future generations.
On the contrary, that money bOr-
rowed from US today will be paid back
to the generations after US. II we
subtract that S6,OO0,OOO,OOO from the es-
timated s24,OOOOOO,0O0 to be raised in
this country in a year, there is left SIS
war. The Ss,0O0OO0,000 Of the proposed
taxation, therefore, Will not be one
third Of our actual spendlngs on the
war, but will be nearer One-haR than
one-third; instead Of 80 per cent 1t viii
be "a per cent.
Again. If IL is a sound theory that
this war should be paid for largely
by direct taxstlonn that direct taxa
tion should be so widely and fairly
distributed that 1t vii not be a crush
ing burden upon anybody. COnsump-
tion taxes Of Sl,0OOOOO,OO0 a year
could be laid upon our whole popu-
lation and the average per capita
cost would not be 50 a year, or per-
haps a half Of 50 a year. The man
whose consumption expenditures We're
$4,000 year. on as low basis as a
per cent. consumption tax, would yield
500 into the treasury. A man whose
consumption expenditures were only
$500 a year would yield into the treas
ury s5 a year And how favorably
would an average consumption tax Of 50
a year or $40 a year, compare with the
many dollars Of increased cost OF living
that every family in the United states
is meeting today
But surely it is not a safe theory that
nearly half or even a third OF our stu
pendous war expenditures should be
met by direct and immediate taxation,
particularly upon a comparatively lin
tied number OF taxpayers. IL can be
said Of this, as Mr. McAdOo frankly
cOnfesses about his own surtax theory
of last year, 1T will not do, however,
TO press any theory, however sound,
TO an extremity" You might as we'll
say that for a small merchant wishing
10 build a store and not having the
cold cash to pay for all the work it
would be a sound theory, when he
could borrow some Of the cost on mort
gage. for him to stop feeding and cloth
ing his family. TO quit paying his in
surance premiums, to strip his shop OF
its stock, 10 dismiss his clerks, TO ruin
his business, so as to put all his re-
sources into that building as immediate
payment.
The secretary OF the treasury wants
revenues to finance our war against
Germany as much assever and chairman
Of the Ways and Means Committee
wants TO raise those revenues. But
the secretary Of the treasury is not so
fatuous as 20 imagine. like the chair
man OF the Ways and Means Committee
that you can burn down house TO
keep yourself warm fc' few min
utes and then expect TO dwell in it
comfortably, healthily and happily.
What Mr.. McAdOo asks Congress TO
do, in the matter Of surtaxes on Liber-
ty bonds, undoubtedly Congress will do.
Undoubtedly also the Senate will see
TO IL that Congress does a greet deal
more than Mr.. McAdOO has yet asked
to change the general revenue measure
so that the Kitchin bill, now seeking
to capture at one stroke an incOmpar-
able revenue from limited number OF
taxpayers, shall not paralyze the econ
omic power of the nation and endanger
the success Of the very war itself.