The Elk Mountain pilot., 1920-04-22
TAXING A oAP-sussLE W. TAKING THE soAP-FAT
A Proposed ch.sss I. tAs I.eidsass Of Taxatie.
BY J. S. FERRIS

BY J. S. FERRIS
specious bit Of propaganda entitled Taking Soap
Bubble has been in general circulation by the Ham
mermill Paper Company of Erie Pennsylvania 1t Is in
the long, letter, and is printed with
the permission Galley Lord, % Madison Avenue New
York City, who apparently the trainers of it In the
plausible vebiage is the cool proposal to
modify the schedule to such extent that the
burden of taxation shall be shifted from accumulated
wealth consumption. Instead of the man paying it
who is accumuating what society considers surplus in
some proposed that the pay the tax who
in ninety of hundred (21 families out of %
than $4,000 income) accumulate surplus
at all.
The consideration, which in the Judgment of these
gentlemen will Justify such radical procedure, class
flied four objections to the existing method of the in
The third of these objections, that the income
tax is "needessy complicated and expensive to collect
fourth, that the tax encourages waste and ex
travagance in business operations do not regard OF
sufficient importance to discuss Such objections might
be urged against tax and against the tax on sales
which proposed replace the income tax quite as
clearly against other In the collection OF the in
come there be people employed and
methods in operation, but it is scarcely clear
why abolish the tax in order to get rid
Of these superAuies To do would be to adopt the
me thod of burning the house to get rid of rats
The first two considerations the obectors themselves
seem regard important and these let us now
consider They will require extended discussion
First the hases the bulk OF the government
revenue a thing evanescent soap bubble with
diinuton of incomes and profits the revenue shrinks
and surplus incomes should become impossible, this
source of would disappear. This sis the most
fundamental of the present system If this
be the weakness of the income tax, it will
probably be hard to excite general alarm For in view o
present prices there has to be general and deep
feeling that considerable number OF people are
making In 1917 there 14l people with
annual incomes million dollars; 315 with incomes
ranging from half million to a Million and almost two
people with incomes above two thousand dollars
year 1918 still better for the men OF big
business to their the 1919 not at
all bad; with the general cry of profteerng now
every hand this year of 1920 it would
that the soap bubble is in no immediate danger of
collapse fact a incomes is not soap bub-
arrangement all 1t may be fuctuating than
tax sales, though that might be disputed Indeed
family's of spending is generally controlled by its
of that when shrunken income decreases
the governments in tax that shrunken in
individuals familys purchases
and thus would quite surely diminish the governments
revenue from a sales tax OF financial panic
might temporarily disturb the flow of from
plus incomes but income tax at such time will un
faingly bear those who really able kind
of ALL The soap bubble objection. to the best
for st. is soap bubble objection.
The second objection, that an income tax prevents
"the accumulation of savings, which would be used In
further expansion of productive enterprises is fatty
contradicted by the central thesis of the paper that no
refuaion required This central contention is
the manufacturer and obber and retailer OF goods
now hold from the burden of the income
by passing the burden down the line to the
illustration is furnished. II manufacturer
pay his tax and keep his income intact must
make $160 where he formerly made $lOO he Will simply
attach this the article he puts the
market and pass it to the jobber wholesaler II
this practice then why should be claimed that
an income prevents the accumulation of savings,
which be further expansion of productive
lenterprises? The manufacturers has been
altered by the tax
In lieu of the exsing income tax it is proposed that
the shall be derived fran three ~ "a
straight of say four per upon all incomes
of $1,000 $4,000" (2) "a straight tax of pei
cent. upon all sales wholesale retaiP (3) "A lin
tied series of upon all unearned incomes
amount that is from bonds investments, rents,
etc" In the item there is definite change pro-
posed it will be left Of account.
The other two propositions will bear scrutiny 1t is
worth while observe that straight normal tax such
is advocated will bear much heavily the small
taxable income than the large The present normal
tax 2fo the lowest taxable income Suppose
with a family is taxable income of $4,000, all
exemptions made. His tax IS $40 BY the proposed
change his tax the income will be $50 double
His by the 1918 schedule would be s323030 His tax
by the proposed schedule will be $4,000 That would be
saving this of s3OO0O0 One does not have
to be scholar to understand what class of citizen
ship is to be benefited by this arrangement.
Il The second item of 70 consumption scarcely de-
patient consideration First of all, place the
tax at 10 is pure and apparently intended to
make the proposed tax appear ting The fact is that
the of money by the present
l%oxr fr;Qir