Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1920-03-24
TAX EXEMPTION EVILS.

Assuming that the operations OF
the government are conducted with
due regard for economy, there is just
so much money to be raised for gov
ernmcnt purposes in a year. That
money must be raised by TAXATION.
II certain classes Of property and GER
lain kinds of incomes are ex-
empted from taxation. h taxes
which they would otherwise have paid
must be collected from other prop
crty and other incomes. The wider
the field of exemption, the greater
will be the burden placed on
those whose possessions are not cA-
cmpt. The operation of our present
tax exemption laws is such as to re-
lievc the wealthy of taxation and to
place additional burdens on those of
small means who are less able to pay.
and who, because Of the fact that they
are engaged in productive enterprises,
ought to receive every possible con-
s%ideration. The effect of these laws is
admirably presented in tho following
summary by kingman Mott Robins
Of Rochester. N. Y, in the course of
an address delivered before tho New
York state tax conference at Utica:
II. Tax exemptions of public Sc
curities is inexpedient, in that the
loss in taxes is greater than the ad-
vantage in borrowing rate; and, fur
.thermore, that tax exemption of
quasi-public or government sponsored
issues is in effect a subsidy to n spe-
cial class in he community, and a
subsidy which costs the government
much more in loss of taxes than the
amount Of saving In interest to the
beneficiaries Of the government.
I'm other words. tax exemption is
inexpedient in government issues,
and a costly form Of subsidy is quasi
government issues.
"2. Tax exemption, by transfer
ring the tax burden from the hold
ers of tax exempt securities to 9TH
crs in the community, violates the
principle of taxing in accordance
with ability to pay Tax exemption.
therefore, is not only inexpedient--
it is also unjust and uneconomic.
20. Tax exemption, by rendering
immune from taxation those who
would otherwise have to pay the
heaviest taxes under a graduated in
come tax, nullifies the working Of
the income tax. Exemption from
taxation Of the borrowings of one
class in the community inevitably
leads to exemption for others, and
thus the whole foundation of the tax
ing system is progressively under
mined.
-. The subsidy OF tax exemption
of government and quasi-sovernment
enterprises puts private enterprise ut
a disadvantage in competition, and
tends to destroy individual initiative,
forces reliance on government aid
and leads inevitably to a degree of
state socialism and bureaucratic
dominance which must react harm
fully on the country.
-. The fact that a 5 per cent
tax exempt security will yield as
much net return to a. wealthy CAPT
talist as a business enterprise paying
IL to II per cent ~d!scourages the in
vestrnent of capital in new enterprise.
TO sum up, the DIRECT and indi-
rect effects of tax exemption are such
as will eventually tend to dry up
the sources OF all public revenue.
and thus defeat not only the pur-
poses OF taxation, but the very ends
which the advocates If tax exemp-
ton profess to seek. 1t is the re-
ductios ad absurdum i'll taxation pol
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