The Washington herald., 1920-10-13
Present Law Hurts Thrift and Industry
Tax Plan Discourages Foreign Capital

gance has gained such headway
that it cannot be arrested rapidly
though it could, I think, and should
be attacked more effectually than
is being done). But the remedy
for faulty taxation and the result
ing relief to the people can be Sc
cured at once whenever IL pleases
Congress, and the administration to
seek that remedy and to apply II.
Admits burden Must Re Large.
1t is quite true that, even with
strict economy in government ex-
penditures, the burden of taxation
must necessarily be considerable
for years to come. But every one
who mas ever had to carry a heavy
load knows that the secret OF car
rying it with relative ease. lies in
the way in which 1t is adjusted.
Our tax burden is grossly malad-
justed. By rearranging it we can
vastly tighten the pressure of the
load upon the backs of the people
and particularly of the so-calleo
middle classes, on whom il now
rests with especial and most re-
grettable heaviness because they
are not in position, generally
speaking. to make their compensa-
tion keep pace with the mounting
costs of living. And among the
principal causes for those mount
ing costs is our faulty taxation.
A good deal may be said for the
contention that the system of tax
alton inaugurated in 1917 was in
accord with the prevailing senti-
ment of the time and had to be
given a trial The theory which
underlies it has rightly a strong
appeal.
system Thoroughly Tried.
Wei. that system has now had a
three years trial. We have seen
the theory applied in practice for a
sufficient length of time to test ii
out. The result is writ large in
high costs of living and other er-
! fects hamperinG and troubling tc
1.-THE nation and burdensome to all
: but particularly to those who were
intended to he the beneficiaries OF
/ that system and that theory, i. e.
the plain people. The revenue
measure of 1917, re-enacted essen.
TALLY unchanged for 1918 and 1871,
stands disclosed as breeder of
grave harm by the memorable test
of actual experience.
The ideal tax is one that rests
where il is laid. That is to a con.
| siderable degree attainable in the
case of reasonable and moderate
taxes but only in that case. In pro
portion as Il tax is grossly eXces
sive or palpably unsound, in thai
proportion is ii liable and likely u
be avoided or passed on
Economists tell us that an in.
come tax cannot be shifted. Tha
is true only in part, and moreOve
the evils growing out of our pres
!ent unprecedented and unparalleled
scale of supertaxation far exceed
1.-THE virtue of what measure of non
Suitability inheres to the incom,
tax. 1t is still less true of our ex
cess profits tax, the incidence o.
which is largely loaded on to cost
and is frequently several times re
moved from the first corporatio,
which has to pay such a tax.
What Increased Costs Mean.
Increased cost of manufactur
and distribution means increased
cost 10 the farmer, increased cos
of the necessities of life, increase
Wages anu III snOTl, increased cos
of living all around.
The social and moral argument
for an unsparing war profits ia:
are to my mind unanswerable. T
permit individuals and corporation
to enrich themselves out of III
dreadful calamity of war is repug
nant to every right thinking man
sense of right and justice, an
gravely detrimental to the wa
morale of the people.
Unfortunately, however, our wa
profits tax was in large measur
disassociated from war profits i
too many cases.
Puts Unfair Burden on Energy.
: And as for the excess profits ia,
so-called, 1t is altogether a differer
! thing, in spirit and effect Tha
; measure establishes as norma
earnings" an arbitrary. and. in cas-
of many industrial activities. inaC
} equate percentage .os return on ir
vested capital, and by a compile
: confusing and generally ill-devise
system, taxes at a high rate a
earnings above that percentage.
, 1t lays a heavy and clumsy han
l., on successful business activity
, is grossly inequitable in it's effect
and. to large extent, the create
or lesser degree of it's burdensomt
r ness is determined by purely for
! tuitous circumstances. 1t puts
, fine on energy, enterprise and eff
cheney. 1t leaves untouched tn,
man of wealth, who neither work
nor takes pe risks and respons
. bilities of business, but merel
,, collects his coupons 1t is bound I
, loperate unfairly, freakishly and ur
evenly and greatly enhance tn
cost of things.
, Let me point out, incidental
4 that the spectacular earnings
certain corporations and individua
afford no criterion of the earnin,
of business on the whole.
AS against number of concerr
and individuals who have made e,
ceedingly great profits during ar
a since the war, there are numero,
others whose earnings have shrun
: and in some cases very great
, shrunk. during and since the. wa
English Conditions Reviewed.
: 1t may be interesting to quo
, the results of an investigate
: made recently in England (whe
conditions appear to be very sim
: lar to those prevailing here) as