The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-09
Vicious Taxes to Go.

Senator PENRosE says that when
Congress meets the first thing the Sen
ate Finance Committee will get to
work on Is revision of the war taxes.
The sooner the better, not only for the
American public and for American
business but for the United States
Treasury itself. The war tax chick
ems are now coming home to roost with
the Government, rs with everybody.
The first thing that happened, for
example, under the excess profits tax,
unsound in principle and vicious In
practice, was to pile n gigantic burden
Of higher prices on the back Of the
public. To maintain their existing
levels of returns producing industries
added to their selling tags a great deal
more than the amount of the tax and
passetl the whole bill along to middle
man No. /. He repeated the perform
ance and passed the bill along to mid
dleman No. 2. He in turn did the
same thing, and so on down the line
until the multiplied tax and the multi
piled price finally fell on the ultimate
consumer like thousand of brick.
The next thing that happened under
this vicious tax system was delirlum
of extravagant, wasteful and lnefii-
cient production costs. Industries and
businesses by the thousands permitted,
even encouraged, their expenses to
run riot because If receipts beyond
the tax immunity line were not spent
this way, that way or the other way
they would take wings anyhow--a
large part to the Government. And
this loaded on the public not only the
multiplied taxes but the multiplied
production costs.
The next thing that happened under
the vicious tax system was that the
public stopped paying the inordinate
prices because the public could not
stand them any longer. Then. with
diminished sale or no sale Of the
hitherto excess profits goods. there
we're no excess profits earned. Then,
with no excess profits earned, there
we're no excess profits taxes to be
paid. This must hit the pocket OF
the Treasury.
Because excess profits are rapidly
becoming q memory. because even net
earnings OF numbers Of industries and
businesses are diminishing, some Of
them to the vanishing point, the Treas
ury revenues which were derived from
special taxes on such objects are in
danger of running dry.
The Government can't live on tax
systems that don't produce Treasury
income. a revenue schedule chat
doesn't bring revenues into the Treas
ury isn't worth the powder TO blow It..
The emergency war taxes passed by
the previous Congress and executed
by the Administration which Is to end
on the 4th day Of next March must
he replaced, therefore, with tax meas
ures sound enough and sure enough
to produce revenues to keep the Treas
ury in funds, good weather or bad
weather.
If there we're going to be another
Democratic Congress and another
Democratic Administration which no
body belleves--they would need new
tax system to enable the Government
to pay It's stupendous bills, just as
much as the Republican Congress and
Republican Administration which
everybody expects, will need Il. Since
there would be no escape from n
newer and better tax system, whether
the Government were In the hands Of
the Democratic party or the Republi.
can party. let the present members OF
the Finance Committee In the Senate