, 1921-08-20
POLITICS AND TAX REVISION.

1.-THE Republican caucus evidently had an attack of
cold feet when it reversed THE decision of the house
ways and means committee to mako certain tax re-
vision apply to 1921" proelaims the Chicago Tribune.
1.-THE attack is understandable if regrettable. There
is no doubt that a sound and strictly scientific revision,
II such could be evolved, would be poor politics I'M
less and until its benefits appeared. In a field of legis-
lation like taxation, perhaps the most difficult prob
lem of government, good politics is bad economics,
and good economics is bad politics. Good politics
may demand a form of taxation which seems to tax
the rich, though the fact may be that the tax does not
work out that way.
''The excess profits tax seems to have proved to be
that sort of a tax 1t was invented to make business
which profted by war conditions bear the largest pos
sible share of the cost of the war. Nothing could
seem juster than that But so far as the tax operated
its effect was TO encourage extravagant expenditure in
business and TO give excuse for pyramiding prices. The
higher surfaces on income were devised to reach those
most able to bear the abnormal burden of war taxa
ton, but they seem to have had the contrary effect of
turning investment into tax exempt public securities,
This avoids the intention of the law and turns a good
deal of capital from private enterprise which needs it
TO public enterprise which may not be urgent and is
likely to be wastefully administered.
yet 10 such of the public as accepted the theory
upon which these taxes were imposed and have no
knowledge of how the theory broke down, repeal
means the escape Of the %proiteer and the very rich.
PARTY tactics and demagogy alike seize on such a
Misrepresentation, and where the subject is as difficult
as taxation it is easier to attack than defend.
Nevertheless congress has a clear duty to make
such revision of ineffective and obstructive taxes as
experience and the best expert opinion indicate. 1t
isn't pleasant to invite partisan attack and misinter-
probation. But the business of the country is in a
condition in which restoratives are greatly needed and
mistaken taxation is one of its burdens. The situa-
ton is serious enough, in spite of the fact that the
worst is probably over, to require action by our rep
resentatives even if it be niisconstrued at first. New
ertheless if the right thing is done it should materially
assist a business recovery which will answer misinter-
probation and justify duty courageously done.
But the most important thing now, it seems to US,
is to come to a decision. 1t is a pity the tax problem
was not attacked first in the congressional program,
but that is past regret. Now business waits to know
what IL must meet and the sooner IL knows the bet
ter. We hope the relief worked out will be effect
i've. Mistakes will be made. Disappointment are
more than likely. The tax burden must continue to
weigh heavily on US all But uncertainty is the worst
handicap and we trust it will be soon ended, so far
as it can be by revision legislation.
ave think when this pressing task is performed con-
gress should begin to consider the knotty problem of
tag exemption which defeated the excess profits tax
and is bound to be occasion of justified discomfort"