Evening journal., 1918-09-13

FOR ue Country 5 wa cutsl, ioT blc
countTy's very foundations 1t is for
tunate that Secretary McAdoo's intel
lect Is as lucid as Chairman kitchin's
Is murky.
In urging the Congress leaders to
grant further tax exemptions to hold
ers Of Liberty Bonds, Mr.. McAdoo
looks squrely in the face truths
which this paper, 'Or one, has eX-
pressed repeatedly. These are that
the Kitchin tax program spells the fall
ure Of future Liberty Loans. It will
throttle the productive capacity OF
the nation. When IL has done that
suicidal thing 1t win make II impos-
sible for the government even to
raise taxes in the volume in which 1t
now can raise them.
Chairman Kitchin is incapable OF
comprehendlng the homely adage that
you cannot eat your cake and have
1t too. But at this moment here are
tens Of thousands Of taxpayers who
are appalled, by their realization that
when Mr.. Kitchins tax gatherers
have cleaned out their pockets they
Will be unable TO take any more Lib
erty bonds. Large numbers OF men
working for their living, not rich men,
but earning good incomes-executives,
managers, superintendent, agents,
statesmen. lawyers, physicians, engl-
nsera, professional men generally
have been taking a very considerable
part Of their incomes and putting u
into bonds. The sum total has been
hege. They have been the chief alb
sorbers OF Liberty Bonds. All the
while their rents have gone up. The
prices Of everything they and their
families eat, drink, wear and use have
gone up. Now the Kltchin surtaX pro-
poses to exact so much Of their income
beyond what It needed for their in
creased and increasing cost Of living
that they see nothing left to put into
bonds. Employers and banks, who
have had to lend them money TO pay
their income taxes due last june,
while they were meeting their install
ments on bond subscriptions, know
this. Secretary McAdoO knows 1t.
Probably everybody but Mr.. Kitchin
knows IL.
- There are thousands more Of an
other classification appalled, by the
realization that when they are so
drastically taxed as to be left tlnan-
cially exhausted they will not be able
to keep their business going as IL has
been going; therefore earnings which
they have today, earnings which can
be taxed now because they do have
them, cannot be taxed in the future, |
because they will not exist for taxa
tion or any other purpose. These con- /
stitute the next most important alb
sorbers Of bOnds-the industrial and
commercial concerns making profits /
and saving surplus. But now the
Ktchin tax on profits proposes to
scoop those earnings into the treasury |
as taxes. Furthermore, the very rich /
man cannot take his taxable bonds at
low interest withOu' having Mr.. Kit /
chin's lofty surtaXes recover into the
treasury the greater part Of that low in
teres'
This is exactly what Mr.. MsAdoo |
means when he says that Mr.. Kitchin's |
revenue bill, with its system OF surtaXes |
"limlts the market for Liberty Bonds to
those who have little or no surtaXes |
TO pay" Mr.. Kitchin. in fact, kills the
Liberty Bond market for everybody eX-
cept the man whose income Is belOW
the tax range. What must then be the !
consequences? II there are forty mil |
lion men below the surtaX range, prob |
ably ten million Of them will be in the
army. That will leave a possible thirty /.
million men in the bond market. IL /
those thirty million could average 500 !
year, the amount Of their subscrip- |
tions would be s3,OO0.OO0OOO a year. II |
their average could be $500 a year, the |
total would be S6,OOO,OOOOOO a year. But |
the treasury within the next three /
weeks wants TO ask for S6000,0 100000 at |
one clip.
If it is a cound theory that this war
should be paid for largely by direct |
taxation, it cannot at the same time
be a sound theory that it should be
paid for momentarly by taxation,
which kills the thing that is taxed.
The tax that slows down a business
cuts down the taxes that can be paid
by that business. The tax that slows
down that business also aut0maticallyt
slows down other businesses that are
economically linked up with that bust
ness. Then in turn the taxes That can
be paid by those businesses are cut
down.
But is it a sound theory that this
war ought TO be paid for so largely by
taxation? 10 is a sound theory, even
though the taxes are distributed
among the whole people rather than
among a relatively few. as Chairman
ktchin tries to distribute them? And |
is it not true that the public IS grossly
~Ra uHAwnuu~