The sun., 1918-09-12

war ought to be paid for 30 largely by
taxation? Is II a sound theory, even
though the taxes are distributed
among the whole people rather than
among relatively few, as Chairman
KITCHIN tries to distribute them? And
Is 1t not true that the public Is grossly
deceived as to the real percentage
Of war cost which 1t is trying to meet
with direct taxation?
In the first place. when the Govern
ment talks Of meeting our war expen-
ditures one-third with taxes and two
thirds with loans. II does not state the
facts. While $S,OOO,OOO,OOO Of taxes
Is one-third Of S2i ZOO, O0O. 900 to be
raised, some $4,000. 100000 OF that
S24, 200, 100000 will go to the Allies
as loans. That $4,000, 100000 is an
investment, not an expenditure. Of the
United States Government. The prin.
clpal, unless Germany wrecks the
Allies, will he returned to the United
states Government. 1t pays interest.
II pays the Government more interest
than the Government pays our Lib.
erty bond subscribers. Clearly, money
borrowed from our own people to be
lent to the Allies will not have to be
paid for by our future generations.
On the contrary, that money bor-
rowed from us to-day will be paid
back to the generations after us. If
we subtract that $4,000, 600 600 from
the estimated $4,000 900 to be
raised in this country In year, there
Is left $4,000, 100000 to be spent by
us on the war. The $4,000, 200, 900 Of
proposed taxation, therefore, will not
he one-third Of our actual spendings
on the war, but will be nearer one
half than one-third; instead Of 80 per
cent. 1t will be Al per cent.
Again, IL it is n sound theory that
this war should be paid for largely
by direct taxation, that direct taxa
ton should be SO widely and fairly
distributed that 1t will not be crush.
ing burden upon anybody. Consump-
ton taxes Of $1,000, 100000 q year
could be laid upon our whole popu-
lation and the average per capita
cost would not be 50 year, or per,
haps n half of 50 year. The man
whose consumption expenditures were
$4,000 year, on as low basis rs
l per cent. consumption tax, would
yield 500 into the Treasury. A man
whose consumption expenditures were
only $500 year would yield into the
Treasury IS year. And how favor
ably would an average consumption
tax of IS a year, or $40 a year, COM
pare with the many dollars Of in
creased cost Of living that every
family In the United States is meet
ing to-day!
But surely It Is not a safe theory
that nearly half or even q third of
our stupendous war expenditures
should be met by direct and imme-
date taxation, particularly upon q
comparatively limited number Of tax.
payers. 1t can be said Of this, as
Mr.. McADoo frankly confesses about
his own surtax theory of last year,
ut will not do. however, to press any
theory, however sound, to an extrem-
ity." You might as we'll say that for
small merchant wishing to build a
store and not having the cold cash
to pay for all the work 1t would be
sound theory, when he could Dor.
row some Of the cost on mortgage,
for him to stop feeding and clothing
his family, to quit paying his insur.
ance premiums, to strip his shop of
Its stock, to dismiss his clerks, to
ruin his business, SO as to put oil his
resources into that building as i'm.
mediate payment.
The Secretary OF the Treasury
wants revenues TO finance our war
against Germany as much as ever
the chairman of the'sNays and Means
Committee wants to raise those reve.
nues. But the Secretary Of the
Treasury is not 80 fatuous as to i'm.
aglne, like the chairman Of the Ways
and Means Committee, that you car
burn down a house to keep yourself
warm for a few minutes and then
expect to dwell in 1t comfortably
healthily and happily.
What Mr.. McADoo asks Congress
to do, in the matter of surfaces or
Liberty bonds. undoubtedly Congress
will do. Undoubtedly also the Sen,
ate will see to It that Congress does
a great deal more than Mr.. McADoc
has yet asked to change the general
revenue measure so that the Kitchlr
bill, now seeking to capture at one
stroke an Incompatible revenue from
a limited number Of taxpayers, shall
not paralyze the economic power. OF
the nation and endanger the success
Of the very war itself.