The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-04-25
FINANCING THE GOVERNMENT

cumstances never occurs.
FINANCING THE GOVERNMENT
Business men turnout the country
are almost unanimous in the opinion
that it is time ito scrap" our hastily
devised, i1l-considered system of war
taxes, just as it is time to cut down
expenditures and to lop off all the
now useless boards and bureaus of the
government that were created solely
for war purposes. Both-the taxes
and the bureaus-served their pur-
poses while the war was on and there
was only one thing to be considered,
to win the war. Nobody stopped to
count the cost then. But now that the
war is over these war measures, es-
pecially the war taxes. are proving
themselves every day more and more
of a menace and a hindrance to the
return of normal business and pros
perity.
Chief among the existing sources of
federal revenue are the customs duties
and the internal revenue taxes. Gus
toms duties last year brought in a lit-
tie more than three hundred million
dollars. Internal revenue taxes
brought in fifty-four hundred million
dol1arsl OF this enormous sum of
nearly five and one-ha1f billions of
dollars, almost three-quarters came
from the income tax and the excess
profits tax. These two together Yield
ed thirty-nine hundred millions.
Liquor taxes yielded one hundred
and thirty eight millions. Tobacco
taxes brought in nearly three hundred
millions. The capital stock tax, the
estate or inheritance tax and the child
labor tax yielded almost another two
hundred millions. The remaining
nine hundred millions, or whereabouts,
of internal revenue, came from stamp
taxes and taxes levied on the sale of
particular articleS-the so-called '1ux-
ury' taxes, taxes on theater admis-
sions and railway transportation and
on soft drinks.
The government cannot operate
without an assured income of approx
imately what was collected in the last
fiscal year, but it's biggest single
source of revenue is dwindnng so rap
idly in productive power that it can no
longer be relied upon. This biggest
single source, as has been pointed out,
is the income and excess profits taxes
Instead of thirty-nine hundred mil
lions from excess profits and income
taxes this year, Joseph S. McCoy. ac-
tuary of the treasury, estimates that
these taxes will produce for the fiscal
year. 1891 only thirty-one hundred and
sixty millions, a decrease of nearly
ree-quarters of a billion, OF the to-
tai of the two items, income and ex-
cess profits, he computes the revenue
from the latter at thirteen hundred
millions.
This is barely more than half the
amount the excess PROFITS tax yielded
in the first year in which it was in
force. Moreover, less than three
quarters of this sum is expected from
current taxes. Prof. Thomas S.
Adams of Yale, who acts as economic
adviser to the treasury, states that
more than three hundred and fifty
million dollars of the excess profits
taxes to be collected this year will be
back taxes, claimed by the govern
ment on account of profits earned two
or three years ago and not properly
reported at the time
The excess profits tax has proved
itself failure from a revenue-pro-
ducing point of view in peace times.
Every important government official
hnUfT1 n In lee TIT 81
and collection admits this. The sec
rotary Of the treasury, in his latest
annual report, predicts that by 1922
the present excess profits tax, includ-
ing collections for back taxes. will
yield not more than eight hundred
millions.
Realizing the necessity for other
sources of revenue many thoughtful
and patriotic business men have
turned to the sales tax as one which
would meet the governments require
ments. At first it was thought that Il
tax of one per cent on turnover would
be necessary. Recently it has seemed
to be the consensus of opinion that
two-tenths of one per cent would be
/ sufficient.
| 1t is believed that this trifling tax
will provide a revenue great enough to
| cover all the governments needs in
normal times. 1t will permit the dis
carding of the oppressive and annoy
ing forms of taxation now in force.
1t will be so small on any ordinary
transaction that it cannot be loaded
on the retail price except indirectly
and when so loaded it cannot be made
the excuse. for profiteering.
! The Buffalo News finds that in con-
gress there is a strong sentiment for
the sales tax, but some of the leaders
while protesting belief in the efficacy
of this tax. are onnosine IeSjsra-