The sun., 1919-05-21

country, that its rates shall be
stable and that II shall be constant
In its revenue yielding power. We
have found the main sources from
which II must be drawn. / take II
for granted that its mainstays will
henceforth be the income tax, the
excess profits tax and the estate
tax. All these can so be adjusted
10 yield constant and adequate re-
turns and yet not constitute a too
grievous burden on the taxpayer.
A revision OF the income tax has
already been provided for by tho
act Of 1918. but / think you will
md that further changes can be
made to advantage both in the
rates OF the tax and in the method
OF Its collection. The excess profits
tax need not long be maintained at
the rates which were necessary
while the enormous expenses of the
war had to be borne, but It should
be made the basis of a permanent
system which will reach undue
profits without discouraging the
enterprise and activity of our bust
ness men.
The tax on inheritances ought,
no doubt, to be reconsidered in its
relation to the fiscal systems OF
the several States. but It certainly
ought to remain permanent
part of the fiscal system Of the
Federal Government also.
Many OF the minor taxes pro-
vided for In the revenue legisla-
ton of 1917 and 1918, though, no
doubt made necessary by the
pressing necessities OF the war
time, can hardly find sufficient
Justification under the easier cir
cumstances Of peace, and can now
happily be got rid of. Among
these, hope you will agree, are
the excuses upon various manu-
facturers and the taxes upon re-
tail sales. They are unequal in
the incidence on different indus
tries, and on different individuals.
Their collection is difficult and ex-
pensive. Those which are levied
upon articles sold at retail are
largely evaded by the readjust-
ment Of retail prices. On the
other hand, should assume that
1t Is expedient to maintain a con-
siderable range of indirect taxes;
and the fact that alcoholic liquors
will presently no longer afford n
source of revenue by taxation
makes Il the more necessary that
the field should be carefully re-
studied in order that equivalent
sources of revenue may be found
which it will be legitimate and not
burdensome 10 draw upon. But
you have at hand in the Treasury
Department many experts who cap
advise you upon the matters much
better than l can. l can only
suggest the lines Of a permanent
and workable system, and the
placing Of the taxes where they
will least hamper the life of the
people.
No Revision of Import Duties.
There is, fortunately, no ocea-
sion for undertaking in the i'm
mediate future any general revi-
sion of our system of import duties.
No serious danger of foreign COM
petition now threatens American in
dustries. Our country has emerged
from the VAR less disturbed and
less weakened than any Of the Eu-
ropean countries which are our
competitors In manufacture. Their
industrial establishments have
been subjected to greater strain
than ours. their labour force to
more serious disorganization. and
this is clearly no: the time 10 seek
an organized advantage. The work
of mere reconstruction will. 1 am
afraid. tax the capacity and the
resources OF their people for years
to come.
So far from there being any
danger or need OF accumulated for
eign competition, It is likely that
the conditions OF the next few
years will greatly facilitate the
marketing OF American manufac-
lures abroad. Least OF all should
We depart from the policy adopted
in the tariff act OF 1918 OF per-
hitting the free entry into the
United States Of the raw materials
needed to supplement and enrich
our own abundant supplies.
Nevertheless, there are parts OF
our tariff system which need
prompt attention. The expert