The New York herald., 1922-01-03
The Surtax on Success.
1t Is Unjust and Harmful In Its
Effect on the Individual.

To THE NEW YORK HERALD: Our lead
ing economists and men of affairs have
unanswerably exposed the mischievous
economic effects of an excessive surtax
in Withdrawing capital from productive
use in industry, and consequently di-
minishing production and with 1t the
employment of labor; and Percy II.
Johnston has Just given incislve express
sion to these consequences in man.
ner that has evoked editorial comment
from THE NEW YORK HERALD.
The logic is clear and inexorable bu.
logic is cold and not always effective.
No tax question receives serious con-
sideration from the multitude until its
moral or immoral aspects are brought
into the open. 1t is therefore possible
that those upon whom the economic
argument makes no impression may be
somewhat influenced by a consideration
of its injustice and bilghting effect upon
the individual.
The surtax on incomes or inheritances
is an unequal and therefore unjust tax.
no matter how small it may be. The
average legislator defends II on the
ground that persons should be taxed In
accordance with their means and there
fore that II is proper to tax the man of
large wealth much more than tie man
of small possessions. That is not true ia
tho sense in which the statement is
made.
A man having property worth 81 900, :
600 should be taxed ten times as mu IN
on that property as the man having
property worth s100,0OO but what the
average politician means is that he
should be taxed twenty or thirty ,. ifty
times as much IL one person owns 100
acres of land and another owns 1000
acres, having the same value by the
acre, the latter pays a tax on his land
which should be ten times as much as
the former. No one would think of re-
uuiring the owner of the thousand acres
to pay the same tax as his neighbor
only on the first 100 acres. and there
after pay a steadily increasing tax on
each additional 100 acres.
The injustice OF such a progressive
system IL so obvious that this method OF
taxing land has never been suggested.
But the principle applies just the same,
whether what Is taxed Is property that
WAS aCCuHluidleu anu llNtSteu III idlu
last year or whether IL Is property
which has been accumulated in the prc5-
ent year and not yet invested.
The most perncious feature in con-
nection with a graduated surtax or sue
cession tax Is the inequality that II pro-
duces and its Inevitable tendency 10 un-
dermine the very foundation of prop
erty rights, because the principle can
now be extended by lawful means SO
as TO deprive the man who works OF all
rewards for his labor and even to pre-
vent him from leaving his savings in
case Of his death to those who are de-
pendent upon him.
Further than this. however. and more
important is the shameful injustice that
Is inflicted upon the class upon which
depends; namely. the class that has
achieved success through the efforts of
the individuals composing II. To this
class belong the great inventors and
those who have been successful In their
professional or business lives.
A man may have devoted his life to
developing an invention that will rev.
olutionize Industry and success may
come 20 him only in his old age. If he
should then dispose of his invention for
$1,000, 900 in the year 1921 the Govern
ment would pounce upon nearly two
thirds of it as Income for the taxa
Bile year." and IL he died the following