Oxford eagle. (Oxford, Lafayette Co., Miss.) 1876-current, 1920-04-29
Of dollars.

I. It encourages waste and extrav.
agance in business operations
leads to the paying Of large sal.
aries, employment Of unneces.
sary people and wasteful meth
dds, all Of which increase costs.
The points we have just covered
compel the attention Of the student
of taxation and the legislator. There
is another consequence Of these taxes
however, which interests everyone
whether taxpayer or not, once it is
pointed out, and that is, the effect
Of the present method of taxation
heavy surtaxes upon earned income
-on the cost Of commodities, and as
main contributing cause to the pres.
emit so-called high cost Of living.
It has been generally recognized
that currency and credit initiation
lessened production, extravagant buy
ing, etc., have had much to do with
the present high prices, and we would
not belittle those factors, but an addi-
tional and primary cause has been
the present method of taxation.
A Burden for the Strong.
The present federal taxes have
been levied, apparently, upon the
theory that the strongest back should
bear the heaviest burden or, in 9th
er words, a progressively increasing
tax. This theory has its appeal; it
seems on the surface to have sort
of elemental fairness about it, but
when we recall the tendency Of all
taxes to follow down and lodge final
| ly in the price of articles and serv-
ices and so be paid by the consumer,
the theory referred to loses much Of
its altruistic appeal. \
1t also has it's political appeal.
Very few people understand the theo-
ries Taxation. The identity of the
ultimate payer of the tax is camou-
tagged and a politician may go before
his constituents with the statement:
1--WE have taxed the rich man while
permitting the rest of you to escape
with little or no tax" Perhaps that
is why we have system Of taxation
which is more socialstic than scien-
tifc.
Let US connect up directly the pres
ent system of taxation with the high
cost of living and, in doing so, we
will first give an illustration. Sup
pose a business man, say, a manu-
facturer of some necessary article,
has been accustomed to make profit
of hundred thousand dollars a year;
he suddenly finds that he is to be
taxed thirty-five thousand dollars on
that profit; and as hit does not want
to make any less net income and as
he cannot escape paying the tax he
strives to secure a larger profit than
before-in other words, to make a
profit of $1.60 or more where he was
making $1.00, SO that he may meet
the accommodating surtaxes on the
larger amount and still at least Sc
cure his former profit. He does this
an passes the article with the price
SO loaded on to the wholesaler or
jobber who, facing the same situa-
ton, meets it in the same way, and
the experience is repeated when the
article reaches the retailer, so that
by the time the article reaches the
retail counter it has been loaded =
times to meet the taxes of the three
classes of traders.
This is not very lovely, but it is
human nature, and if such a course
has not been followed by all it has,
without doubt, been followed by
many, an din following that method
Of passing the tax along the loading
is always excessive or the tendency
always is to add to the tax.
Consumer Ultimately Pays.
Now it may be argued that compe-
tition should correct this, and if man
ufacturer caompeting with the one
in our illustration should be accustom.
ed to making but fifty thousand dol
lars a year he would not have to ado
so much for taxes and could under
sell the first man, but at presen
competition is practically absent ant
the smaller manufacturer finding
that he can obtain the price set b.
the big man does so and secures tina
much additional profit. In this man
ner, camoufiaged tax probably take
from the consumer an amount mucl
greater than the actual total of tn
tax received by the government, an
it takes from the consumer just a
surely as if it was tax levied diret
upon consumption.
| Now, take up tax on sales as a
alternative to the present method, W
think we may say that it is a ia
upon spending rather than upon sa,
ing and in that respect wholesome
that.is clean-cut, straightforward