The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-06
Sound Taxation Work for the Senate.

Senators with principles, and brains
are not wasting their time, as some
newspapers are, in discussing Chair
man KIrCHIN's theories of taxation.
AS we must judge him by his words
and acts, Mr.. KITcHIN hasn't any
theories Of taxation. He has ha-
tired Of that part of his country north
of Mason and Dlxon's line. He has
a passion for destruction. Where
fore. Mr.. KITCHENS taxation prac-
fices consist of inordinately penaliz-
ing. financially rafling and economi-
Cally looting revenue sources that
are tnstasteful to him.
1t is idle to discuss the economics
of the fellow in the fable who killed
the golden goose There is no need
to explain In detail that as KITCHIN
makes 1t impossible for industry and
business to be prosperous, or even to
survive, he makes it impossible for
the Treasury to continue to draw
greater and greater revenue from
those depleted sources. So what the
responsible Senate leaders Of both
parties want to do without useless
words about the Kitchin bill, what
the Treasury Department wants them
TO do, and what the country must
have them do unless 1t Is to suffer
permanent disaster from the Kitchin
performances, Is to put some sound
taxation into the House measure
which Senator SHOOT describes as q
bungliug absurtlity.
We have not discovered any re-
spectacle sentiment againN heavy in
come taxes. Everybody expects them;
everybody whose war spirit Is right
Is willing to pay his full share, big or
little. so long as it is fair share. The
income of corporations merits no ex-
empti6n. Nobody suggests it. But a
tax that penalties business for not
scattering all its earnings in divi-
dends instead of holding reasonable
share of them back to provide for the
expansion of that business and to
guard against usual hazard to that
business is simply a fool tax. The
Senate may not tighten the burden on
individual incomes. But IL the Senate
does not eliminate the discrimination
whereby a corporation is taxed only
IL per cent. on its distributed earn
ings, but IS per cent. on Its undistrib-
uted earnings, it will help to lock the
wheels Of every great industry in this
country.
If the Senate does not provide for
greater revenues out Of profits that
come purely from war business, 1t will
permit wrong to every normal bust
ness. 1t Is true that a tax on war
profits, pure and simple. is merely n
cutting of price to the Government on
war materials supplied to the Govern
ment. No war could possibly be
largely financed by taxes on war
profits, because the most that such
taxes could do would be to get the
price of the war material down to
cost. The material still would have
to be paid for by other taxation. But
there Is no sound reason why bust
ness whose profits come solely from
the war should be permitted to make
out of the Government anything like
what normal business should be per-
mitted to make out of its customary
peace operations.
If the Senate writes into the rev.
enue measure consumption taxes,
ignored by KITcHIN, we shall have
not only fair taxation, which will
hurt and can hurt nobody, but taxa
ton which, paid by all, In cents by
the small consumer, In dollars by the
big consumer, will turn into the
Treasury hundreds of millions, per-
haps billions of dollars.
The Senate can do any Of these
things and improve the Kitchin meas
ure vastly. Nothing that the Senate
could do could make the Kitchin meas
ure worse than 1t Is.