Americus times-recorder. [volume] (Americus, Ga.) 1891-current, 1924-03-12

IlHIGS dS iuuCu IdASss
"For short time the surfaces
yielded a large revenue, but since
the close of the war, people have
come to look upon them as a
business expense and have treat
ed them accordingly by avoiding
payment as much as possible.
The history of taxation shows
that taxes are not paid. The
high rates inevitably put pres
sure upon the taxpayer to with
draw his capital from productive
business and invest it in tax
exempt securities or find other
lawful methods of avoiding the
realization of taxable income.
The result is that the sources OF
taxation are drying up, wealth is
failing to carry its share Of the
tax burden, and capital is being
diverted into channels which
yield neither revenue to the gov
eminent nor profit to the peo-
pie.
This is clearly shown by the
statistics for the six-year period
extending from 1916 to 1921.
During this time the country's
total net income increased over
three times, whereas the total
amount of incomes in excess Of
100000 a year decreased from
nearly S1,000,0O0,O00 in 1916 to
about $150,O00,000 in 1921, and
the number of taxpayers in the
100000 class decreased from
about 1900 to about $50. 1t
must be remembered, also, that
the sur-tax rates in 1921 were
far higher than in 1916, and
yet the amount of revenue re-
ceived by the government from
the larger incomes constantly di-
minished. 1t may sound like a
paradox, but the fact remains
that higher surfaces brought less
revenue to the government from
the larger incomes than did the
lower rates.
ain taxes, just as in business,
there is rate which will produce
the largest amount of revenue
without decreasing the volume of
business. If toe high a price is
charged sales diminish, and also
profits. If too low a price is
fixed sales increase, but profits
decline. This is a basic princi-
pie in the sales policy of any
great corporation. If the Ford
Motor comapny doubled the price
of it's cars does any one doubt
that it would sell fewer cars and
consequently decrease its volume
of profits, Notwithstanding the
increased profit per car? The
government is a business con-
Germ and it's revenue can and
should be raised in accordance
with business principles.
'What rates will bring in the
maximum amount of revenue to
the government? The treasury
estimates that the highest sur
tax rate should not exceed 25
per cent, which, with a normal
tax of 6 per cent. will impose a
total tax of 81 per cent on in
comes of 100000 and over. 1t
arrived at this conclusion in the
following way: At the present
time a man with an income of
100000 pays a tax of So per
cent. He can invest in tax-ex-
empted securities paying 4 IL
per cent and receive as much net
income as he would make in a
business enterprise paying IL
per cent. Good investments pay
ing II per cent are hard to find,
so the man of large income is
more and more tending to avoid
the risks of business and to put
his money into tax-free bonds.
There is no dearth of such Sc
curities available for investment.
At the present time more than
12,O00,000,000 of tax-free Sc
curities are outstanding, and the
loss of revenue to the govern
ment over what it would receive
if the income were taxable has
been estimated at very large
amount. The tax-free securities
outstanding would be unaffected
by constitutional amendment
removing the tax-free feature of
municipal and state bonds. Sur
taxes, therefore, have two great
defects-frst, they are rapidly
falling as a source of revenue
to the government, and, second,
they not only encourage state
and municipal extravaganza and
thereby increase local taxes but
they also retard the natural
growth of industrial enterprise.
Mr.. Mellon points out tn,
serious shortage of houses; tn,
lack of capital for investment il
business enterprises, and esti
mates that the railroads alon
must have one billion dollar
a year for several years in OF
der to provide new equipmen
and enlargement and to reduc
the cost of transportation"
Surfaces were a war meas
ure, he says, and were not in
tended to become permanen
part OF our taxing system.
Tax reduction has been an,
is being made a political fool
ball in Washington. Part
comes first. Relief is in secon,
place.
Tax o-,a,..4. r E,