The times-herald. [volume] (Burns, Harney County, Or.) 1896-1929, 1918-01-26

reseniativcs passed m net ito provld,
revenue 10 defray war expenses ant
for other purposes, In tue origina
bill as presented by the Committee oI
Ways and Means. the additional reye
nue. to be derived was estimated at 81,
Sl0,420,OOO. The amendment 10 the IN
come tax, which was tackled on 10 the
bill during the discussion IN the House
was expected TO yield another $40. 600
900 or S50,O00.00O.
In discussing the House bill, two
problems arise:
!. How much should be raised BY
taxation?
ii. In what manner should this sun
be raised?
I. How Much Should Be Raised by
Tasation7
How was the figure OF 81 SOC. 600. 900
arrived at? The answer In simple. When
the Secretary OF the Treasury came 10
estimate the additional war expenses
for the year l0i7-tS. he calculated TINT
they would amount TO some $4,000.
100000, Of which $1,000 OO0. 600 was TO
De allotted 10 the allies. and 5000.
100000 was 10 be utilized for the do
nestle purposes. Thinking that II
would be fair proposition TO divide
this Inter sum between loans and
taxes, he concluded that the amour
TO be raised by taxes was 81, 100000.
900.
There are two extreme theories, each
| nf yvl inh hn a
courtesy. The one IL that all war ex
penditures should be betrayed by loans
and the other IN that all war expendi.
lures should be betrayed by taxes
Each theory Is untcnable.
! II ~ indeed true that the burdens of
the war should be borne by the pres
ent rather than the future generation:
but this does not mean that they shouls
be borne by this years taxation.
Meeting all war expenses by taxatio,
makes the taxpayers IN one or two
years bear the burden OF benefits tia
ought to be distributed at least over
decade within the same generation.
In the second place. when expendi
lures approach the gigantic sums OF
present-day warfare the tax only pol
Icy would require more than the total
surplus OF social income. Were this
absolutely necessary. the ensuing hav.
oc In the economic life OF he communI.
~ would have TO be endured. Bul
where the disasters are 40 great and
at the same time so unnecessary, the
tax-only policy may he declared i'm.
practicable.
Secretary McAdoo had the right In
stlnct and highly commendable cOur
age In deciding that substantial por.
lion, at least, OF the revenues should
be derived from taxation. But when
he hlt upon the plan of 1880 per cent
that Is, of raising one-half of all do
nestle war expenditures by taxes, the
question arises whether he did not 20
too far
The relative proportion OF loans TO
lakes Is after all purely business
pro lositlon. Not to rely 10 II large oy-
tent on loans ut the outset of II war Is
a mistake.
Disadvantages of Excessive Taxes.
The disadvantages Of excessive taxes
Il the outset of the war are as follows
/. Excessive taxes on consumption
VIII cause popular resentment.
2. Excessive taxes on industry will
isarrange business, damp enthusiasm
and restrict the spirit of enterprise AZ
the very time when the opposite H.
Leeded.
.. Excessive taxes on incomes will dc
I'lete the surplus available for invest
tnents ana interfere with the placing Of
the enormous loans which will he neces
slry In any event
4. Excessive taxes on wealth will
cause n serious diminution of the In.
comes which are mt present largel,
drawn upon for the support of cduca
tional and philanthroplc enterprises
Moreover these sources Of support |
would be dried up precisely at the time
when lhe need would be greatest.
5. Ekcesaive taxation at the outset OF |
tho war will reduce the elasticity avail !
able for the Increasing domands that
are soon TO come.
Great Britain's Policy.
Take Great Britain as an eXamp'e |
During the first year OF the war she
Increased taxes only slightly, In order
to keep industries going ut top notch
During the second year she raised by
new taxes only o per cent. OF her war
expenditures. During the third year
she levied by additional taxes (over
and above the pre-war ItveD only
slightly more than II per cent. of her
war expenses.
If we should attempt TO do as much
In the first year of the war as Great
Britain did III the third year 1t would
suffice TO raise by taxation S1,250O00,
)00 II, In order to be absolutely on
The safe side, 1t seemed advisable TO
Increase the sum TO 81 800, 600 900, this
'hould, IN our opinion, be the maxi
mum. L