The Daily Alaska empire., 1941-10-28
THE LETTER

THE LETTER
 Editor Fairbanks Daily News Miner.
 In a recent editorial which was reprinted here in the Daily Alaska Empire, you make plea for Ter ritorial economy, and select as your theme the tax program which advocated to the Fifteen Territor- ial Legislature. You state:
 Governor Gruening strongly urges an increased tax program for Alaska. He proposes, too, the bonding of the Territory for a million or more.'
 This last sentence is completely erroneous. have never advocated bonding the Territory. I believe strongly in paying as you go and have never advocated anything else, although circumstances might well arise when bonding would seem desirable. However, I have never proposed this and have wired the News-Miner today that this misstatement be corrected.
 Then the Miner editorial goes on:
 His plans for higher taxation, if put into effect, would cause the suspension of many smaller gold mining enterprises, already experi- encing difficulties etc. It is in teresting to note how the pleas against having industries and com merce pay fair share of their tax burden are always accompan- jed by tears for the smaller" en- terprises. Actually, the tax program proposed was based on capacity to pay. The only specific increase which would have been levied on all enterprises, small and large, was the abolition of the $20,000 gold exemption. The gold industry as whole (which unlike most in- dustries has an assured non-com- petitive market) enjoyed 69 per- cent increase since 1883, paid no additional Territorial tax whatever for four years and then paid some thing less than a percent tax with $l0,00O exemption for two years and $20,000 exemption for the last three. To state that adding $500 Territorial tax annually per enterprise-which is what the abo- lition of the exemption would mean would cause its suspension is fantastic. The only additional tax proposed was 4 percent tax on the NET profits. In other words, an industry making no profits would have paid no net tax and only those making profits would have been asked to pay in propor- tion to their net earnings.
 The plea for economy is one with which I fully sympathize. I would like to repeat, however, that econ- omy is not so much what you save | as what you get for what you spend. Apparent economies can be made which in reality are costly. Was it economy, and is it econo- my, for the Territory to permit five million dollars worth of gold to be taken from Alaska annually without paying single cent Cf tax to the Territory? This is what is now happening under the $20,0OO exemption.
 Is it economy for the Territory not to collect a single cent of tax from the profits that are being made this year in the vast con- struction business, in connection with national defense? A hundred million dollars are being spent in Alaska by the Federal government for bases and air ports. A sub stantial portion is being built by private contractors, the majority of whom are firms from outside. The four percent net corporate tax and the modest personal income 1 tax on money earned in the Ter ritory presented to the last Legis- lature would have solved the Ter ritory's financial problem for this biennium and for decades to come. This unprecedented source of reve- nue would have been available to the Territory this year and next and thereafter will be gone. Is it economy for the Territory to make no collection whatever for It's public purposes on the increased income which has come to the businesses and people of certain communities now experiencing a defense boom?
 The merchants, banks and other enterprises in defense towns are for year or two reaping a har- vest, but their greatly increased in- come is in no wise reflected in Territorial receipts, owing to the existing rigid fixed license and mercantile taxes which they pay. Yet many of these towns have problems calling for increased ex- penditures as a result of their growth. An intelligent and flexi- ble tax system would make 1t