The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1920-02-28
Two Years OF Faulty Taxation,
And The Results
By OTTO H, KAHN

NEW YORK. Feb. aS.-otto II.
Kahh Of New York. makes public to-
day a pamphlet prepared hy him. en-
titled Two Years Of Faulty Taxation.
and the Roaulta." The essential pof-
ton 81 the pamphlet follow;
Taxation. while necessarily invoiV-
ing political and social considerations.
IL essentially a problem In national
economics. n A. primarily a question
OF public advantage wisely, truly and
subtle. profound and manifold and,
unless carefully studied ana measured
In advance. apt to crop up in uneN-
pected ways and places. The very eN-
irene OF the burden laid upon busi-
ness and incomes by the method %
taxation adopted by congress IN 1917
and since continued. has partially de-
feated tho purposes which the ram
ers o. that legislation had In view,
and az the same time has given rise
to certain unforeseen and trouhlous
deveiopments-as invariably happens
in the ease Of extreme measures. cH-
pecinlly where economics are involf-
81.
Several factors are responsible for
the economic d%lsiOcation and resulting
Ills uncludinE high priccs) which
confront W.. Among these factors.
none has been more potent for harm
than our federal taxatlon. The re-
suits which did arise from Il were
bound TO arse. n did not need a
prophet To forcicii. Tor instance, that
the existence OF many billions Of fed
fral. state and farm loan bonds, en-
tirely free from all taxes land more
of such bonds coming out almost
daiiy). on the one hand, and income
taxation on a scale unparalleled IN
any other country In respect OF a per-
sons Income from business and cor
porate securities. ON the other hand.
would drive a very great portion OF
the cOuntry's liquid capital into tax
free securities and thus largely pre-
vent the access OF private and cor
porate trade ana industry 70 the great
reservoir Of individual Investment
capital.
Tho free flow OF capital. the normal
working o. the Investment market
are absolutely basic elements for cv-
cry kind Of trade and industry. The
|enccta Of their disturbance TO u SER
ious degree for any length OF time are
all perVading.
We cannot have "A return 10 a state
rpproachinE normal conditions OF
trade. prices. etc., until a Invest
meat market will have come within
measurable distance, al least, OF nor
NAL conditions.
And that IL impossible as long as
our present income tax remains In
| force. even " the other elements
which have operated to bring about
the present abnormal situation were
removed.
an excessive TAI destroys It's own pro-
ductivity.
Wrong economies. however wcli-in-
tentioned, have been more fruitful OF
harm TO the people than limos m
other single act OF government.
No doubt the prevailing npportion-
ment Of monetary reward b. not free
from defects Though less 50 In this
country than anywhere else), hut
there has been a steady and pro-
nounced tendency ana movement. IS
/ pecially within this generation, 20
ward mending such defects n re-
modelling incquitable conditions. Evo-
luton and the irresistible powers which
make for progress, enlightenment
and Justice NAY be depended upon "a
continue and advance that process.
There can be no turning back. BIT
| ~improvident measures OF cconomi,
| violence will not hasten that process
on the contrary. they will impede u.
A small committee Of well-intorm'
/ ed men Of different calliugs. APP
preaching their task free from politi.
cal. social and sectional bias, would
not lind Il a formidable undertaking
TO evolve a measure which, whll'
fully responsive TO the dictates ol
equity and social justice, would pro
duce no less revenue than h tax
alton now In force. and yet woult
be far less burdensome upon th'
Country. less hamporing to enterprise
and less productive OF economic dis
turbance and d"ialOcation.
Il might recommend a radical rcVi
sion of Income taxation on the thcorj
that the emphasis OF taxation he lait
rather on expenditures than ON IN
comes aud that u sharply marked dis.
ltinctlon he made between such pOr'
lion OF "A persons incom" ~ II ~
VoustructiNcly in savings, Investments
or enterprise and raich PARTON ~
srcnt ON his scale OF living. \ Ia
biased ON that theory would no douh
Exempt oxpcnditul es Of a certain
minimum sum per annum. say, $3.50
Tor single and $4,000 FOR married per
lsons. would be applied moderately Il
moderate expenditures. and would h
ifevereiy progressive on large eNpendl
lures.
Much can ne Nilu Tor HNiN 70 va
from both tho economic and mora
points 81 view. Among other dcsir
able effects, "a would reach THOSE wht
by holding tnN-dNcmpt securities no'
escape the burden pf taxation
aud ID MUuid thus go n long way q
eliminate the undue advantage no,
attaching Ia tnN.cNrmpt ~sSuritir
aud To correct the resulting rNtl
which I have pointed out bfnorc :
discussing that phase of our taN prob
] lcn.
While a tax of this nature Involve
lcertain complexities iu its details uu
working. they would hy no means b
linsupcrabls. iu fact, they would.
\ Think. he less formidable than lhos
y of tho present Income tax.
b The committee might. ] Hhoul
=. think. reach the conclusion 90 90,
commend the imposition eft "a smH
percentage tax, say ] per cent, ON 90
D sale OF commodities and products tn
presumably of real estate such
q measure would bee productive of "a
i. Immense amount Of ven an
would rot be harmful 10 any one,