The midland journal. (Rising Sun, Md.) 1885-1947, 1918-03-15

IF we add the so called "occupa-
tionaI' tax our total taxation on in
comes of $4,000 is 81 per cent. and ON
incomes of $4,000 81 per cent?
In other words, our income taxation
is more democratic than that of any
other country in that the largest in
comes are taxed much more heavily
and the small and moderate incomes
much more lightly than anywhere else
and incomes up to $1,000 for married
men not taxed at all.
(3.) 1t is true, on the other hand,
that on very large incomes-as d.stins
guished from the largest incomes-our
income tax is somewhat lower than the
English tax, but the difference by which
our tax is lower than the English tax
is incomparably more pronounced in
the case of small and moderate incomes
than of large incomes.
The Excess Profits" Tax Here and
Abroad.
Moreover, If we add to our income
tax our so called excess profit tax"
which is merely an additional income
tax on earnings derived from business,
we shall find that the total tax to which
rich men are subject is in the great ma
jority of cases heavier here than in
England or anywhere else.
(4) 1t Is likewise true that the Eng
lish war excess profit tax is so per cent.
(less various offsets and allowances),
whilst our so called excess pr9fi tax
ranges from 20 per cent. to 90 per
cent
But 1t is entirely misleading to base
conclusion as to the relative hnavi-
ness of the American and British tay
merely on a comparison of the rates,
because the English tax Is assessed or
Il wholly different basis from the Amer
'can tax
The American excess profit law ESQ
eaIIed) taxes all profits derived from
business over and above certain
moderate percentage, regardless of
whether or not such profits are the
result Of war conditions. The Ameri-
IAN tax is general tax on income de-
rived from business in addition tG
The regular income tax. The Eng
ish tax applies only to excess war
profits-that is, only to the sum by
which profits in the war years exceed
he profits in the three years preceding
he war. which in England were years
# great prosperity In other words,
he English tax is noninally higher
Ian ours, but it applies only to war
profits. The normal profits Of business
i. e., the profits which business used
to make in peace time-are exempted
II England There, only the excess over
peace profits its taxed. Our tax, on
he contrary, applies to all profits over
and above a very moderate rate on the
money invested in business
We Tax Normal Profits, They Tax Only
War Profits.
In short, our lawmakers have de-
creed that normal business prof $ are
axed here much more heavily than in
gland, while direct war profits are
axed less heavily.
You will agree with me in question
ing both the logic and the justice of
that method 1t would seem that 1t
would be both fairer and wiser and
more in accord with public sentiment
if the tax on business in general We're
decreased and, on the other hand. an
increased tax were imposed on spe-
citic war profits.
10y Our federal Inheritance tax Is
ar higher than it is in England or any
where else The maximum rate here
on direct descendants Is PIN per cent.
5 against 20 per cent. in England. In
.d,lition to that, we have state in-
critance taxes which do not exist In
England.
(6.) OF her total actual war expen-
iitures exclusive of loans to her al.
hes and interest on war lOans) Eng.
land has raised less than IS per cent.
by taxation (France and Germany far
'cSs). while America Is about to raise
by taxation approximately 20 per cent.
of her total war requirements (exclu.
sive of loans to the allied nations and
of the amount to he invested in mer-
camille ships. which, being a produc-
tive investment, cannot properly be
clnssed among war expenditures.
We men of business are ready and
willing to be taxed In this emergency
to the very limit of our ability and to
make contributions TO war relief work
and other good causes without stint.
The fact is that. generally speaking,
capital engaged In business is now
being taxed in America more heavily
than anywhere else in the world. We
are not complaining ahont this; we do
not say that 1t may NOT become neces-
sary to impose still further taxes: we
are not whimpering and sqsiealing n;i
agitating. but-we do want flr nco e
.,,b.,x 49, ,,,,,,, a, = -.