Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-04-27
SHIFTING TAX BrRDEHs

In a report just made BY II. G. Mckenzie OF New York,
who has been investigating taxation problems, this state
ment occurs: 1T would BE- a dire mistake to shift a bill
lion dollars of taxes from the incomes OF the very rich and
OF corporations, to the shoulders of the farmer and the pay
envelopes OF labor" Mr.. Mckenzie then goes on to set
1orth the great increases in net earnings Of corporations in
recent years, this being held by him to be a sufficient rea-
son for maintaining the present taxes on profits and cor.
poration activities.
About the only shifting Of tax burde ems that would be
brought about by the elimination of some Of the taxes on
excess profits and on corporations as such is the actual
lessening the burden by the elimination Of waste and un-
certainly in collection and the elimination Of additions
which are made in the various transitions of commodities
from the original producer and consumer. The fact il,
that the consuming public, whether the farmers, laborers
IN whom Mr.. Mckenzie seems to be particularly interested,
or the small merchant. the banker. and everyone else who
nave excess profits taxes, corporation taxes, and a lot Of
other taxes which in tho long run are paid by the people
who use the goods. No legislation that can be devised will
chanse this. IT a given industry is unusually profitable,
it presents an attraction to the general public TO engage
IN IT, and Notwithstanding all that. is said of combinations
ana agreements among business people, human nature is
SO constituted that where, there Is an opportunity for a
long profit. no individua' and no group of individuals can
long monopohze it. In one way or another competition will
spring up through the desire to share in the large profits
that are beinG made. The result must be a tendency to in
crease production beyond what is necessary to mset the
demand, and = lowering OF prices. These things do not
work out'in a few days or in a few weeks. but they do
work out ultimately in the manner indicated.
Taxes upon the transaction Of business arc added to
the cost Of doing business and figured in tho price which
the consumer pays for the goods. II by adding these costs
together and Jumping them with the ordinary cost of oper-
atlon, 1t Is possible still to realize a satisfactory profit, the
business VII continue II not, it will go by the board: The
owner will seek some other means Of making a living. and
there will be . factory to let. One of the evils of the pres
'ent system ia that as costs are added, they are very often
multiplied, in the desiye to make sure that enough allow
ance is being made for taxation costs, 1t has been stated
by statlsticians that the excess profits tax which we now
nave Will increase the cost of many lines of goods as much
as twenty per cent, whereas to yield the same revenue to
the government 4 sales tax Of one per cent would increase
the cost to the public from two to three per cent. Under
the present conditions. the consuming public is paying the
difference either as the price of waste or as profits appor-
tlaned among those who produce and handle goods.
The simplest method Of relieving the public of a great
portion o: the burden of these taxes is to abolish the e1-
cess profits tax and to modify the other tax schedules, to
adopt some form of sales tax and simplify the work Of col.
lection as much as human ingenuity can simplify it.