The New York herald., 1921-11-16

was proper enough. but to keep up this
form of taxation in the Same degree
during peace time would be intolerable.
We should change our system OF taxa
tion SO as no longer to put such handi-
cap on saving as the present system does.
Between the man who consumes his
days work as fast as he creates il
and, on the other hand. the man who
practises self denial and saves part of
his days work and puts II into savings
banks, or in other forms OF Investment
between these two men say 1t is the
business of wise government to tax the
former rather than the latter.
"Cur present system Of taxation de-
stroys the incentive to save. The pres
ent excessive income tax has introduced
differential OF anywhere from per
cent to so per cent. working against
the man who Is trying to accumulate
a competence. This must not be. It
should be the business of the Govern
ment to make the accumulation Of a
competence less difficult. To make It
more difficult Is perversion OF govern
ment.
Thrift Is Civilizations Basis.
Thrift is the foundation stone OF civi-
lization. a system OF taxation which
bears on thrift too much and does not
bear on the lack of thrift enough, or a
system of taxation which takes from the
fruits of thrift unduly. Is a malevolent
device and retards civilization. l say,
with all the emphasis at my command,
that It Is the business of n civilize
| government to encourage thrift ana
safeguard its fruits, rather than TO-
penalize thrift and take away Its fruits
through q malevolent form OF taxation.
"I use the term Consumption tax
These words may be made the object or
| partisan misuse and the occasion Tor
attempted political advantage. either by
| those who have not the knowledge or
| fundamental economic principles TO
| understand clearly what IL means, or
by those who are willing wilfully to
mislead tho public. IL 30, IL matters
| noe.
when I use the phrase consumption
| tax / couple It, of course, with the
| provision that accumulated wealth also
must continue to contribute In the form
| Of sanely graduated income tax to
the cost OF government which stimu-
| lates the processes of accumulation and
protects and safeguards the fruits of
| it. In addition to g sanely moderate
! income tax, l most earnestly favor a
| sales tax or production tax or a
|
to call a system which taxes the con-
sumption Of goods rather than alb
stinence from the consumption OF goods.
Keep Part OF Income Tsr.
For the reasons that have stated we
must keep the income tax in part. but
in q form more wisely framed and in q
very greatly reduced degree. When j
= % L. Ii. Ae.-
may go, cannot pretend to speak in
definite terms. But can say this:
would cast out forever as an instrument
| of the devil, in an economic and political
sense, any form or any degree of taxa
| ton which causes a business man to
| say, as he contemplates an enterprise
| If this venture turns out well the Gov
ernment will take q fourth or o. third or
q half of my gains. | guess will turn
il down
"I would cas-. out g. form OF taxation
| which causes. for example, an author to
| say, L should like to write this book
but what is the use? If It goes badly ]
will get little, for my labor, and if II
| goes well the Government will take too
| large a proportion Of my returns. ]
| guess might as we'll go fishing.'
| II would adopt a form OF taxation
! which encourages and makes easy the
| accumulation OF q new store OF wealth
and goods to replace what has been con-
sumed in the war. would outlaw any
| form OF taxation which makes that now
accumulation difficult or impossible. and
which in turns, by IT'S excessiveness, so
increases the rate &C interest paid for
the use OF capital as to mako capital un-
available.
II would turn my faco against n sys-
| tenn of taxation which, either in It's fun
damental nature, or in the excess Of its
| application, puts q handicap on all
| pioneering, on all venturing, on all ex-
perimenting In business, in science and
In art. 1 would turn my face against
! n system OF taxation which discour-
! ages or makes difficult or even impossi-
BILE that accumulation OF goods and
wealth which is the food and clothing
OF art, OF science, of schools. of churches,
OF hospitals, of most Of the organized
| charitable educational and spiritual
forces OF tho country. I would ever
| lastlngly prevent Il system or taxation
that In many cases and in many COM
nunities is not taxation at oil, but con-
hscasion.'
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