New Britain herald., 1918-07-17
Luxury" Taxes.
(Springfield Republican,

tSprlngfield Republican,
Income and excess profits or war
| profits taxes are to be raised to very
near the possible maximum. No mer-
cy for the war prof1teers. But still
| the $4,000 100000 required in taxes
will not be provided for. The Treas
ury is soon to lose revenue from whis-
key, wine and beer to the amount of
many Millions by reason of national
prohibition, which Congress evidently
will establish within year for the
duration of the war regardless of
the fate of the prohibition amend
ment to the Federal Constitution. In
order to find the balance of the S.
00O,000,000 to be raised by taxation,
it is proposed by the treasury to levy
direct taxes on the consumption of
goods or services under the name of
luxury taxes. These would consist of
percentage taxes on even the retail
sales of nUmberless articles of per-
sonal or household use. If a man
bought shirt for more than So. he
would pay a tax on it. just as now he
pays a tax on theater tickets Such
taxes would be called luxury taxes
not without some straining of the
word luxury, but luxurious living is a
highly relative matter and, in a world
that has come down to brass lacks,
even q $3.50 shirt may be c1assed
perhaps as a luxury.
Luxuries have always been taxed,
in peace times especially imported
luxuries. We may as well face the
necessity of extending to unheard of
lengths the classification of Injuries,
so as to include many articles within
a certain price range that hitherto
have escaped direct taxation. If there
is no other way to raise the money
needed for the war, then the people
should be reconciled to these proposed
taxes even on retail sales. There is
another justification for them, to wit,
the discourage of unnecessary
production and wasteful consum ption.
If the people will not save their mon
ey voluntarily by habits of thrift, the
Government will be forced to make
them economical by taxing them in a
way to discourage needlessly heavy
expenditures on essentials or any ex-
penditures whatever on non-essen-
tials. The so-calIed luxury taxes are
defensible for two reasons, therefore,
the collection of revenue and the dis
couragement of waste.
1t is urged by some critics that
these two objects are antagonistic and
may defeat each other. People mast
be encouraged to spend their money,
it Is argued, if trade is TO flourish,
and unless trade does flourish, large
consumption taxes cannot be collect
ed No fault can be found with that
argument as q piece of reasoning, but
the fact remains that if the Govern
uent Is to take from the American
people $24,000,0 100000 in one year for
war purposes, either by borrowing or
taxation, they must save that amount
somehow from their income. That
means the cutting off of expenditure
in certain directions: it cannot be
helped even If some industries are in
jured.
The gross annual income of the
American people estimated to CORE
spond with the present level of prices,
is probably from 60 to 70 billions of
dollars-o9 course no one knows even
approximately the precise amount.
The bulk of that annual increment
OF wealth the people have spent on
themselves, their living, their pleas
ures and their Injuries. How much
thew now save is a matter of guess
work; one financial authority is re-
ported to calculate the annual saving
at IS billions. which is over twice
what it was in peace. If that is all
then there must be an additional
squeeze in expenditure of some six
billions, if the Government is to raise
4 billions in revenue.
The American people could save
much more if they were placed under
the sharp spur of necessity. The
main problem of war taxation is
psychological, that is to say, it is
moral. How much are the people
ready to endure and to suffer in order
that the nation may achieve the OBJ
1ects which it has professed in enter