The states-graphic. (Brownsville, Tenn.) 1???-1984, 1918-07-26
EQUITABLE TAXATION
TO FINANCE WAR
Representative COrdell Hull, Income
Tax Expert of the House, Discuss
es Problems of Present and Future.


1918 constituted by far the most nots
bic steps in fiscal reform ever take
by the United States government j
its entire history. The enactment Q
both Of these laws of such far reach
ing and tremendous importance mark
ed the elimination of protracted effor
extending over many years to substi
tute modernized and efficient fisca
legislation in each instance in eacl
instance for the veritable patchwork
system of finance and revenue so Ions
in operation. The growing public ap
probation of these two great act:
will, as their wise and beneicent effect:
are more fully experienced and real
lied, become greater and greater with
the passing years.
The general government, until re-
Gently, has never devised or adopted
any comprehensive, scientific system
of taxation, mainly because its reve-
nue. demands were not great enough
to strongly focus public opinion on the
defects and shortcomings of the partial
and lopsided system relied upon. For
some years at least, following the war,
the government will doubtless find it.
self obliged to impose taxes for nor
NAL purposes to an amount of $4,000
100000, or the rise.
The necessity for a broad, sound and
equitable system of federal taxation
now bcomes inevitable. Under former
tax laws wealth escaped the chief por-
ton of its just and fair share. The
middle and poorer classes bore the
burden. The income tax had its orr
gin in the two-fold purpose of equal
izing tax burdens and providing ade-
quate revenue. This tax is today
playing tremendous part in the fin
ancing Of the war.
Fw people yet realize the frightful
position in which the government
would hove found itself in its efforts
to provide war revenue except for the
fact that the income tax movement,
during previous years, had resulted in
the amendment of the constitution and
the enactment of an income tax law
which had been gotten we'll into opera
ton when the war came On and still
less do they realize the great service
thus rendered the country in this wise,
though IN a measure unconscious, prep
aration for the war that was son to
follow. Wealth, for The first time,
bears its share Of taxes.
Many person Lave had the errone-
our impression that tariff taxes come
from an inexhsustible source of rev.
enue capable Of meeting the most ex-
traordinary expenditures, and to be
tapped at viii by the fff, ,s ...s.,.
al ttatrlqJIsIil, olIS has zoe ruF tsuselit-
1s.Isnf The truth is that TIE maximum
yield of tariff taxes for any given year
heretofore was 100000. As far
back as 1909 the trainers Of the Payne
tariff lew, in search Of revenue under
normal conditions, were obliged, to
turn to internal taxes as Q means Of /
experimenting the estimated deficit |
in tariff tax yield To this end they
first incorporated a graduated Inherit
ance tax provision and one taxing cof-
fee. Later these provisions were elm
mated end corporation excise pre-
vision substituted.
The largest amount that could pos
sibly be derived from customs sources
in the future will not exceed between
$400,000,000 and S500,0000co Unless
laid upon sugar, coffee, tea, etc, it is
supremely ridiculous to suggest a lar
ger war tax at the custom house. On
ly four hundred millions Of our S3,000,-
100000 imports for the last fiscal year
we're manufactured goods-but little
more than one-eighth-while the chief
imports consisted Of feedstuffs, and
raw materials, to tax which general {
extent at this time would be criminal. J
Besides, the increase in imports has
been in value rather than quantity as t
! rule c
Values have doubled during the war, /.
md so this condition makes large
moving of imports, but the quantity
las not greatly changed from the pre-
eding figures, while the quantity of
manufactured imports-the kind
ind chiefly dutiable under any kind of
! tarif-have greatly fallen off, and
TRANCE to say, the present inflated
alues of such imports were not quite =
IS great as they were for a CORES
,onding period of the Payne tariff 2 2
aw ending in 1913.
All nations agree that the tariff is :
enormously unreliable and inefficient .
g revenue producer in time Of war. a
The result is that all nations at war z
urn TO internal taxation for their
hief revenues. =
We cannot, therefore, establish
arge, permanent system of internal
axation as the only means of meeting a
he greatly increased level of normal t
expenditures, including interest on war e
ebt, which will confront the govern I
nent during the years that follow the D
var. The income tax will unquestion- b
bly, be looked TO as the chief revenue t
reducing method in this system. The v
ncome tax proper should comprise the 0
AK will yield near $4,000, 1000, 900 for c
917, and probably more than s5,O0O,-
10000 for 1918, of which amount the S
ncome tax proper should comprice the t
srger portion. Before the war Lloyd I
!