Evening star., 1924-03-20

over sixteen billions of dollars in
six years from this one source alone.
period totaled less than two billions
Of dollars.
From 1876 employees in 1865, the in
ternal revenue department had grown
to 2O.995 employees on June 80, 1928.
What has happened since the days
or Hamilton, who was the great
champion of indirect taxation? Just
this. Direct taxation today has taken
the place of indirect taxation then.
No longer Is ii necessary to advocate
tariff for revenue.
6S Per Cent From Internal Revenue.
The government collected $4007,-
$4,000 in the fiscal year ending June
80. 1923. Of this huge amount in
come and profits taxes contributed
41.ss per cent of 1t; miscellaneous
internal revenue. 1851 per cent, MAX
ing total of $3.50 per cent Of the
total amount from internal revenue
alone. Customs duties furnished 1902
per cent: interest premiums and dis
count. ,s.d5 per cent: all other in
This gives the story up to date.
The war has changed the fiscal
policy of the government. But new
contest is developing. Will the in
ally be reduced by allowing again the
customs revenue. a sales tax perhaps,
and other indirect taxes. to absorb
this reduction? Or, will the people
demand that direct taxes. based on
in securing the necessary revenue
Of the national government for the
future?
The problem Of the tax exempt
bonds seriously complicates this other
nFnh1an1 CT n n
ing approximately $4,000 900 900 Of
such securities. 80 per cent of them
being state bonds or bonds OF politi-
cal subdivisions Of the states. These
imposed by the federal government
Today the federal government re-
ceived a heavy surtax on all large
net incomes in the United States.
incomes of 100000 and over Men
of large means, since the imposition
of the super income taxes. have been
buying bonds the income of which is
not subject to this heavy tax. They
have found out that per cent tax
exempt bond gives them a better
return on their investment than a
stock paying IL per cent but subject
to the tax. Besides the risk is much
less.
In 1916 there were 1896 persons
having incomes of $300.000 a year
and over. This decreased to 241 per-
sons in 1921. according to the last
official report issued by the Treasury.
In my opinion the problem of direct
taxation will never be successfully
handled or controlled until tax ex-
empt bonds are entirely eliminated.
The whole merit of ability to pay in
taxation is vitfated by allowing in
this manner the very weaithiest class
in the United States to receive all of
the benefits OF government protection,
without any cost to them, and at the
of fn n
1t is thoroughly un-American in
theory and vicious in practice.
Urges Direct War Payment.
II the American people want to
continue direct taxation. and desire
stiff supertaxes to whittle down large
fortunes in the future. then the first
step is to eliminate the issuance Of
all tax-exempt securities.
War costs should be paid for by
direct taxes. which cannot be shifted
pay. So should all government costs
not directly due to war. But such
costs we now know are a mere
bagatelle. War costs are the huge
world and of the United States must
for the next generation. dig down
deep into their pockets to pay.
Indirect taxes. such as sales taxes,
|
will only make the lot Of the average
man in the United States so much the
harder to bear.
The history Of all modern wars
shows that it is not only the man
.le also pays for it. BY gradually
reducing the direct taxes. such as
income and supertaxes, and increas-
ing at the same time the indirect
ones, the poor man Will only repeat
what has been true dozens Of times
In the experience of nations. He
will pay the cost Of the war.
II was Hegel who said that we
Learn from history that we learn
nothing from history"
Hegei may be wrong. Time only
will tell.
,Copyr,ght. 1924. in @. 8. and Great Britain
By North American Newspaper Alliance.
All rights reserved.)
Tn,nnrrnw (e0nCludfnR)s What II All