New Britain herald., 1920-02-26
NEW BRITAIN HERALD, THURSDAY FEBRUARY 2o 1920

for apportioning the government ex- penditure. If q result of his rec orn nren ndationS there should be a., de- hcit, it would be the duty of the pres ident to recommend ways and means of meeting that deficit, whether by borrowing or by new taxation. The president and his administration would then be held directly responsi- ble for recommendations of eXpendi- ture which involved waste, duplication of effort, or the support of unWise and injudicious undertakings. The congress would become the conStruc- tive critic of the administration and would vote upon the budget, in whole and in part, with a clear understand ing which is not now possible of how 9 given vote would affect the govern ment's financial condition at the end of the fiscal year. A sound budget system will also involve an independL ent public audit under the authority of the congress. Such Eubiic audit would enable congress to follow up and to cheek the appropria tions which it had authorized, and so to gain knowledge and experience to assist it in taking wise action upon new pro. posals.
 Excess Profits Tax Unfair.
 ''Granted that the budget system is in effect, how is the government to raise four billion dollars a year? During the present fiscal year the government expects to raise nearly six and g. half billion dollars, of which about five billions comes from inter- nal revenue and three-ffths of that huge sum from the income and ex-
 
 formerly so important an item in the public revenue, now sink to less than three hundred million dollars or considerably less thar one-twentieth Of the total amount of the govern mcnts estimated income. Even under a wiser tariff than the present one. therefore. we cannot expect to de- rive from this source any consider able proportion of the vast revenue that the government needs. The and the unfairness of many Of the lesser internal revenue taxes are such as to justify their fore depend for the major portion of our national income in the year to follow upon taxes levied on individual and corporate incomes. The excess profits tax is a It is unsound in theory and most oppressive and oppressive in operation should c gotten rid of the arliest possible rnert in order to uns1ackle industry. to set free initiative, and to Stlm ulate pro- duction. The income tax rates are also far too high to be reasonable in time of peace. The abolition of the excess profits tax and the revision of the income taxes would leave prob l ,11- 1,i11 T,-aJF <J.@lI be provided in other ways One suE- 1 gestion that has been made and l largely supported is that there should l be imposed general tax on sales of, say, one per cent. Economists gen. 1 and point to unfortunate results in 1 like Spain. where it was ] once in operation. Nevertheless, this 1 gap in the revenue must be made up | som chow, and if we are not to have a general tax on consunl ption we -st 1 find a substitute for it. Needed:-Anotlicr Billion Dollars.
 One plan is 10 get rid of the pres | 2nt very widespread exemptions from l taxation. including, Of course, the ob- igations of states, countries, and 1 This. however, raises l l political and a constitutional ques- |
 
 fore the adoption of the 18th amend ment there can be no doubt that 1 state, county and municipal obliga- ions were exempt from federal taxa ion as a consequence of our conSti- -utional restrictions. Whether these 1 restrictions still ap- ply is a matter concerning which l authorities differ. The question is l. important enough to be presented to he supreme court for early determin- ition. The sum and substance of the | natter is. therefore, that even sup budget system. even supposing q new {, spirit of economy to displacc the pirit of cXtraVagance at Washington, here will be need Of q billion or billion and a half dollars of revenue rom sources yet to be agreed upon. This revenue must be raised in q ,pirit of fairness. not in q spirit of and it must be raised m manner that will leave us free to ieveiop the industries and the bus 1 ness of the country in order that we 1 nay have the widely distributed in :omes with which to bear the burden ,f taxation and to produce the rev ,nue that the government requires. These are problems of business and 1 problems of economies. They lie inn nediately in front of us and must be 1 elved.
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