New-York tribune., 1918-07-14
Income | axation
arrest Way of
Raising Revenue
lmposts On Goods In General
Use Cannot Be Made
Equitable

Taxation is the most obvious, the
most unpleasant, the most honest and
most satisfactory way in ultimate re-
suits by which government can get
money for war or other uses, accord
ing to Hartley Withers, editor of the
London Economist" "By taxation"
writes this British authority, "a gov
eminent simply takes money out Of
your pocket and mine and spends it
on war or any other purpose for which
money is required. By this process
our spending power is curtailed; the
governments is increased We have
to spend less on the goods we usually
consume. and consequently our de-
mand for the goods and services pro-
duced by the community is to that ex-
tent reduced. There is no increase in
the demand, and consequently no un-
toward effect in the way of rise in
prices.
=, Taxation also has this advantage,
that when it is we'll and scientifically
imposed, it is raised from the whole
community according to the ability of
the various citizens to pay. We GER
talnly can claim we have gone farther
than most countries in this respect.
since the bulk of our revenue is now
raised by what is called direct taxa
ton, which has the great advantage
that 1T can be graduated and differ
entlated so as to fit the burden, with
more or less success, to the ability
OF the taxpayer to bear it; that is to
say that direct taxation in it's most
well-known and obvious form. the in
come tax, is calculated according to the
amount of the taxpayers income, and
IT'S rate varies according to the extent
Of that income.
Gradation Is Fair
"This is the great principle known
es graduation. 1t is also differentiated;
that IS to say that the worker who is
earning an income from the sweat of
his brow or the labor Of his tnews and
slnews pays a lower rate of income
tax than the owner of inherited or
saved wealth who derives his income
other, and so is certain of receiving
1t whatever be his state of health and
his ability to work.
Taxation that can be thus gradu-
ated and differentiated is clearly very
much falrer than any other kind; but
we have still long way to go before
we nave made our income tax abso-
lutely perfect. Some abatements are
already allowed to fathers of families
which have to be educated, but those
abatcments do not nearly apportion the
burden of the tax fairly, and it is more
than high time that some scheme Of re-
form should, as could easily be done,
wipe out this blot on this otherwise
most equitable tax, so that it could be
used more freely and with less injus-
tlce in the task of raising money for
the war
When we compare the advantages Of
the income tax with the unfairness in
volved by what is called indirect tax
atlon--that Is to say. imposts levied on
articles of general consumption, such
as tea, sugar, tobacco and beer-the
inequality involved by the latter is at
once apparent. The pound of tea or
the glass Of beer, bought by the mil
lOnaire or by the crossing sweeper,
pays exactly the same amount in tax
alton. although it is very obvious that
the ability to bear taxation is entirely
different in the two cases.
Ahead OF Germany
Cone of the notable features of our
war taxation has been the very large
proportion of it that has been raised
by direct taxation as compared with in
direct. In this respect, as in most
others in war finance, we compare very
favorably with the achievements of
Germany, where by far the rgeater
part of the war taxation has been laid
upon the shoulders least able to bear
it. in the form of indirect imposts and
in the shape of high prices due to in
haticn.
after taxation, the most satisfac-
tory manner in which government
can raise money is by borrowing di-
rectly from the citizen money that he
saves. BY this means again money
which the citizen would otherwise have
spent upon himself or upon his friends
or upon investment in ordinary enter
prise, is handed to the government. and
so the buying power which the citizen
would either have exercised for his
own purposes or for that of ordinary
industry is transferred from him to
the government to be used for the war.