Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1920-10-14
BILLIARD PLAYERS COULD
TEACH SOME CONGaESSMEN
They Are Familiar Enough With Resill.
ence to Know That a Tax viii
Rebound From the Man II
Is hlned Az

| LIVERY billiard player knows that the
- balls are resilient. and that when he
aims at one ball he will hit both IL the aim
! is right
| The difference between the billiard player
| and the legislators who pass tax laws Is that
| the legislator is convinced that when he
| aims at one object that is all he will hit
no matter how he aims.
Rut experience has proved time after time
that the legislator is mistaken The man at
whom he has aimed his taxes frequently
serves merely as n cushion from which they
rebound and hit some one else.
II some one we'll grounded in the subject
would write for Congress a Little Rollo book
on the repcrcusson or rebound of taxation
we might have tax laws that would distribute
the burden of government CQuitably.
If II had been written before the Demo
cratic Congress passed the war tax laws we
should not now be hearing Senator Penrose
announcing that the pernicious features of
those laws would be repealed as soon as
possible nor would We have Otto H. Kahn.
whose economic thinking Colonel Roosevelt
said n short time before his death was the
soundeSt in the country. writing about the
iniquities of the excess profits tax and the
existing income tax.
Senator Penrose. who Is chairman Of the
the excess profits tax will be repeated and
that the income tax law will be revised. lie
is making this announcement ut this time so
that the business of tho country may know
what to expect from n Republican Congress
and Republican President and may act in
the light of this knowledge on election day.
The consumer. however. is more deeply
interested in the subject than tho producer,
though he does not always know it.
The excess profits tax was levied on the
theory that il was possible for Congress 10
take from the pockets of manufacturers n
part Of their profits without in any way
affecting any one else. The men who
drafted the bill assumed that large manu-
facturer. clearing 81 900, 600 a year. could
be compelled TO pay over $500. 900 to the
government to help pay the cost of the war.
and that the transaction would end when
the manufacturer drew his check. They be-
lieved that tho easiest and simplest way to
get money was to mulct the rich of part of
their wealth.
This has been favorite delusion OF lpgis.
IatorS for centuries. perhaps because the
legislators have been poor men with an in
nate jealousy of those who have accumu-
lated or inherited wealth. 1t has been re-
sponsible for more perncious legislation
IL
based on ignorance of economic laws
The manufacturers have paid the excess.
profits tax in the first place but in order to
get the money they have increased the price
or what they have made. No business Con
be carried on successfully" which does not
include in the cost of production every
charge against it. including the taxes. They
enter into the cost just as truly as the
wages Of the workers and the sums nad for
raw material and the interest on the capital
invested and the sums allowed for !eprecia
tiOn in the value of the plant
Many a business man has failed because
he has omitted from his calculations the
cost Of some one or more OF these items. 1t
would be as foolish to damn the manufac.
turer for passing on to the consumer the
excess profits tax as to damn man who
refused to ignore the laws of gravity
But as Mr. Kahn has pointed out the
manufacturer has been compelled to add to
his selling price more than enough to meet
the new taxes for the reason that he has
been compelled to pay the taxes in cash
while his profits have not always been avail
able in ready money. He had to have the
money for the government or suffer the pen
atty for nOnpayment.
So the poor consumer, whom the CON
GrcSsmcn thought they were protecting bv
had to pay not only all the tax. but such
additional sums as the business man thought
he needed to enable him to have the money
ready for the government when il was due
without using up the ready cash that he
needed for carrying on his business. There
is no doubt that in some cases this condition
has been responsible for proftopring but
even when there has been no profitecring il
has increased the cost of living for every
one.
In like manner the income tax has affected
prices, for it has been added to the cost Of
production of everything made by any one
who has had to pay the tax. And it has
borne more heavily upon the people Of
moderate means than upon the very rich
The very rich are experts in investment.
There are many forms of investment the
income from which Is properly exempted
from federal tax. When the national gov
crnment says that it will take 30, 40 or co
per cent Of a mans income on taxable in
vcstments, that man will put his money into
other securities. Indeed. the demand for
such securities has been so great for the last
two or three years that money needed for
carrying on the business of the country has
been difficult TO get.
The railroads are hamprred for lack OF il.
Families in all parts of the country are
clamoring for houses. but builders have been
unable to borrow the money to put up new
houses.
And the high cost Of all building material
for houses, factories, Office buildings and the
like is partly due to the unintcIligent tax
laws, which have not only absorbed capital
that should have been employed in other
ways, but has directly added to the cost of
producing everything that is used by the
people.
What the country needs is a new system
of internal taxation arranged by men who
know as much about the subject as the
billiard player knows about billiard balls,
l. IL Il