The Monmouth inquirer., 1925-06-04
Productive Effort Stops if Gov
eminent Takes Undue Share Of
Profits, Says Treasury Official.
WEALTH IN RUSSIA FLED
BEFORE THE TAxGATHERER
Men IN America Prefer Golf to
Giving Fruits Of Three Days Work
a Week TO Income Taxes i.


taxation, leading to a nations econom-
&c destruction, are described in the
current issue Of the American Bank
ers Association Journal by Garrard B.
winston, Under-secretary of the Treas
ury. Citing possible effects on the
Ford Motor Car Company. he declares
that 'sthe value Is so large and its
ownership 30 conferred it Is conceav-
able that collection Of inheritance
taxes may check, II not destroy, that
unit OF policy which has created and
expanted that industry and thus pre-
vent its future prosperity. or what
avail, then, is It to any government II
Il collects one hundred million DOL
lars once In estate taxes and destroys
a source of income upon which it can
rely for revenue year after YEAR,
Success of the Ford Company doeA
not mean simply that Mr.. Ford and
his son have grown wealthy. 1t means
employment of tens of thousands OF
men and women; that mines, forests,
railroads and vessels are brought into
use; that the public has received an
efficient and inexpensive means OF
transportation; that the farm Is In
touch with the city, and the worker
with his Office" Mr.. winston says in
part:
Wealth Flees Oppression
upon first impression 1t might ap
pear that nation could take all OF
the earnings of its citizens or all OF
their property. The Soviet govern
ment proposed to appropriate all in
strumentalities of trade and COM
merce. Yet, when the state reached
out to grasp this wealth, 1t disappear
ed and left nothing but few tangible
objects. such as gold and jewels.
which were easily transported to 9th
/ err countries. Wealth In Russia ceased
to exist
eff income tax rates are placed so
high that capital in productive bust.
ness no longer gives net return COM
mensurate with the risk, capital viii
go out Of productive business, lie idle,
go abroad, go into tax-exempt securi-
ties. or find other ways Of avoiding
the tax. II income tax rates are SO
excessive that q man of ability finds
he must work more than three days
week for the government, he will be-
come discouraged and decide that the
result is not worth the effort Less
income will be produced and less VIII
be realized from the tax.
Recently a letter came to the
Treasury from q small farmer. He
owned q few acres which in 1918 were
assessed at 5000 and on which q tax
of $13 was levied. In 1924 the as
sessed value increased to $4,000 and
the tax to $12S, but the farm failed
to produce any more. Taxes exceed
ed the rental value of the land and
more than the net earnings OF the
property were taken by the state. The
farm was abandoned and now pro
duces no tax.
"Often there come to notice cases
where a particular improvement Is
not made, or particular business Is
not started, because after deducting
taxes the risk exceeds the value OF
the expected return. Men have drop
ped business, spent their winters in
Florida and their summers abroad,
because what they are permitted to
retain under present tax rates is not
worth the labor they must give to
acquire It. They prefer golf to tbs
further development Of the country.
UnsclentIfic Taxes Destroy Nation
s'Unscientific methods Of taxation
may actually destroy the vary earn
ings or property which it should be
the principal interest Of a govern
ment to foster. When it reaches the
limits Of what Is known as its taxa
BILE capacity, nation has begun to
die. II taxes are raised too high, a
country will slowly but surely de-
stroy itself. It will use for daily con-
sumption the seed corn on which its
future life depends, and the spirit Of
initiative and adventure In its peO
pie win finally disappear. One or
more Of three things happen: The
auantity of consumption is cut down.
which means a lowering of the stand
ard OF living: or capital accommodations
for extensions. improvements and
new undertakings must diminish. re-
sulting in a slowing up Of progress
and lessening eventually Of taxable
revenue: or. thirdly, slackening OF
effort on the part of the citizen win
take place when too large part Of his
earnings are taken in taxes.
1.-THE eHori IN taxation should Ue
to find the tax which win continue
to raise money over period Of years.
Invariably, with an excessive tax. its
yield has fallen of year by year.
while each rate reduction is reflected
in an increase Of taxable income. y
the Treasury is to be assured con-
ttnuance OF revenue. cur citizens
must prosper. II they are to prosper,
the appropriation by the state of their
eAfnirgs and property must be based
@Dcn economically sound RriAciplaa.@