Thursday. June 21, 1017
HOW SHALL WE
PAY FORTHE WAR?
A Constructive Criticism on tha
House tana Bill,
LOANS BETTER THAN TAXES
Five Reasons Why Excessive Taxes at
the Outset of War Are Disadvantage
ousGreat Britain Example Worthy
of Emulation How the Taxes Should
Be Apportioned.
By EDWIN R. A. SELIGMAN,
McVickar Professor of Political Econ
omy, Columbia University.
Oa May 23, 1017, the House of Rep
resentatives passed an net "to provldo
revenue to defray war expenses aud
for other purposes." In the original
bill as presented by the Committee of
Ways and Means, the additional reve
nue to bo derived was estimated at $1,
810,420,000. The amendment to the In
come tax, w hich was tacked on to the
bill during the discussion lu the House,
tftis expected to yield another $40,000,
OoO or $ro,ooo,ooo.
In discussing the House bill, two
problems arise:
I. How much should be raised by
taxation? ,
II. Ia what manner should tills sum
be raised?
I. How Much Should Be Raised by
Taxation?
now was the figure of $ 1,800,000.000
arrived at? The answer is simple. When
the Secretary of the Treasury came to
estimate the additional war expenses
for the year 1917-18, he calculated that
they would amount to some $0,000,
000,000, of which $3,000,000,000 was to
be allotted to the allies, and $3,000,
000,000 was to be utilized for the do
mestic purposes. Thinking that It
would be a fair proposition to divide
this latter sum' between loans and
taxes, he concluded that the amount
to be raised by taxes was $1,800,000,
O00. '
There are two extreme theories, each
of which may be dismissed with scant
courtesy. The one Is that all war ex
penditures should be defrayed by loans,
and the other Is that all war expendi
tures should be defrayed by taxes.
Each theory is untenable.
It is Indeed true that the burdens of
the war should be borne by the pres
ent rather than the future generation;
but this does not mean that they should
be borne by this year's taxation.
Meeting all war expenses by taxation
makes the taxpayers in one or two
years bear the burden of benefits that
ought to be distributed at least over a
decade within the same generation.
In the second place, when expendi
tures approach the gigantic sums of
present-day warfare, the tax-only pol
icy would require more than the total
surplus of social income. Were this
absolutely necessary, the ensuing hav
oc in the economic life of the communi
ty would have to be endured. I'.ut
where the roasters are so great and
at the same time so unnecessary, the
tax-only policy may be declared im
practicable. Secretary MeAdoo had the right in
stinct and highly commendable cour
age in deciding that a substantial por
tion, nt least, of the revenues should
be derived from taxation. I!ut when
ho hit upon the plan of RO-IiO per cent.,
that Is, of raising one-half of all do
mestic war expenditures by taxes, the
question arises whether he did not go
too far.
The relative proportion of loans to
taxes is after all a purely business
proposition. Not to rely to a large ex
tent on loans at the outset of a war is
a mistake. '
Disadvantages of Excessive Taxes.
The disadvantages of excessive taxes
at the outset of the war are as follows:
1. Excessive taxes on consumption
will cause popular resentment.
2. Excessive taxes on industry will
disarrange business, damp enthusiasm
and restrict the spirit of enterprise at
the very time when the opposite is
needed.
'3. Excessive taxes on incomes will de
plete the surplus available for invest
ments and interfere with the placing of
the enormous loans which will be neces
sary in any event.
4. Excessive taxes on wealth will
cause a serious diminution of the in
comes which are at present largely
drawn upon for the support of educa
tional and philanthropic enterprises.
Moreover, these sources of support
would be dried up precisely at the time
when the need would be greatest.
5. Excessive taxation at the outset of
the war will reduce the elasticity avail
able for the increasing demands that
re toon to come.
Great Britain's Policy.
Take Great Britain as an example.
During the first year of the war she
Increased taxes- only slightly, In order
to keep industries going nt top notch.
During the second year she raised by
new taxes only 9 per cent, ot ber war
expenditures. During the third year
she levied by additional taxes (over
and above the pre-war level) only
slightly more than 17 per cent of her
war expenses.
If we should attempt to do as much
In the first year of the war as Great
Britain did In the third year it would
suffice to raise by taxation $1,250,000,.
000. If, In order to be absolutely on
the safe side, it seemed advisable to
Increase the sum to $1,500,000,000, this
should, In our opinion, be the maximum.
In considering the aimortlonment f
the extraordinary burden of taxes in
war times certain scientific principles
are definitely established:
How Taxes Should Be Apportioned.
(1) The burden of taxes must be
spread as far as possiblo over the
whole community so as to cause each
individual to share in the sacrifices ac
cording to his nullity to pay and ac
cording to his share In the Government.
(2) Taxes on consumption, which are
necessarily home by the community at
large, should be Imposed ns far as pos
sible on articles of quasl-luxury rather
than on those of necessity.
(3) Excises should be Imposed as far
as possiblo upon commodities In the
hands of the final consumer rather
than upon the articles which serve pri
marily as raw material for further
production.
(4) Taxes upon business should be
imposed as far as lwssible upon ni;t
earnings rather than upon gross re
ceipts or caiital invested.
(5) Taxes upon income which will
necessarily be severe should be both
differentiated and graduated. That is,
there should be a distinction between
earned and unearned Incomes and there
should be a higher rale upon the larger
incomes. It Is essential, however, not
to make the Income rate so excessiveX
ns to lead to evasion, administrative
difficulties, or to the more fundamental
objections which
above.
have been urged
(0) The excess profits which are due
to the war constitute the most obvious I
and reasonable source of revenue dur
ing war times. Rut the principle upon
which these war-prollt taxes are laid
must be equitable in theory and easily
calculable in practice.
The Proposed Income Tax.
The additional income tax as passed
by the House runs up to a rate of 00
per cent. This is a sura unheard of in
the history of civilized society. It must
be remembered that it was only after
the first year of the war that Great
Britain increased her income tax to the
maximum of 34 per cent., and that
even now in the fourth year of the war
the Income tax does not exceed 42V6
per cent.
It could easily be shown that a tax
with rates on moderate, Incomes sub
stantially less tbanju Great Britain,
and on the larger Incomes about as
high, would yield only slightly less than
the $532,000,000 originally estimated in
the House bill.
It is to be hoped that the Senate will
reduce the total rate on the highest in
comes to 34 per cent, or at most to 40
per cent, and that at the same time It
will reduce the rate on the smaller in
comes derived from personal or profes
sional earnings.
If the war continues we shall have to
depend more and more upon the in
come tax. By imposing excessive rates
now we are not only endangering the
future, but are Inviting all manner of
difficulties which even Great Britain
has been able to escape.
Conclusion.
The nonse bill contains other funda
mental defects which may be summed
up as follows :
(1) It pursues an erroneous principle
In Imposing retroactive taxes.
(2) It selects an unjust and unwork-1
able criterion for the, excess-profits tax. j
(3) It proceeds to an unheard-of I
height in the income tax. j
(4) It Imposes unwarranted burdens : trip means long and difficult trips on
upon the consumption of the comr-iu-1 foot and often far removed from hu
niry. man habitation.
(.") It is calculated to throw business
Into confusion by levying taxes o;i gross
receipts instead of upon commodities.
(01 It fails to make a proper use of '
stamp taxes.
(7) It follows an unscientific system
In its flat rate on imports.
(Si It includes a multiplicity of pet
ty and unlncrative taxes, the vexntious
ness of which is out of all proportion to
the revenue they produce.
The fundamental lines on which the
House bill should be modified are sum
med up herewith:
(1) The amount of new taxation
should be limited to $1.250.0n0.000-or
at the outset to $1,::00,0.000. To do
more than this would be as unwise as
it Is unnecessary. To do even this
would be to do more than has ever
been done by any civilized Govern
ment in time of stress.
(2) The excess-profits tax based upon
a ennnd system ought to yield about
$500,000,000.
(3) The income-tax schedule ought to
be revised with a lowering of the rates
on earned incomes below $10,000, aud
with an analogous lowering of the
rates on the higher Incomes, so as ot
to exceed 34 per cent. A careful cal
culation shows that an income tax of
this kind would yield some $430,000,
000 additional.
(4) The tax on whisky and tobacco
ought to remain approximately as It Is,
with a yield of about $230,000,000.
These three taxes, together with the
stamp tax at even the low rate of the
House bill, and with an Improved au
tomobile tax, will yield over $1,250,-
000,000, which is the amount of money
thought desirable. .
The above program would be In har
mony with an approved scientific sys
tem. It will do away with almost all
of the complaints that are being urged
against the present. It will refrain
from taxing the consumption of the
poor.
It will throw a far heavier burden
upon tbe rich, but will not go to the
extremes of confiscation. It will ob
viate Interference with business and
will keep unimpaired the social pro
ductivity of the community.
It will establish a Just balance be
tween loans and taxes and will not
succumb to the danger of approaching
either the tax-only policy or the loan
only policy. Above all, It will keep
an undisturbed elastic margin, which I
must be more and more heavily drawn
upon as the war proceeds. '
! Big Free
:: Brin
I lie Ail
Bring your
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1 loll nwm at- TnMJkoii
vdiicy riuu LApCH
Sent To Far East
Prof. F. C. Reimer of the Southern
Oregon Experiment Station will sail
for Japan and China next month, in
connection with the great work this
experiment station is doing with
pears. He will go as a representa
tive of the United States Department
of Agriculture and the state experi
ment station of Oregon. These two
institutions have made arrangements
whereby Professor Reimer will repre
sent both Institutions, the Depart-
jmenl 01 Asncuiiure anc ine state
each bearing half of the expenses of
the trip.
The collection of varieties and spe
cies of pears which Professor Reimer
has gathered together at the Southern
Oregon Experiment Station is regard-
ed by experts as the most complete
in the world. He has found in this
collection several Chinese species
which have proved highly resistant
to pear blight, and one species which
has proved absolutely immune to this
disease. This is the only species of
pear that has ever been found any
where in the world that has proved
immune to this disease. This pear Is
also the hardiest in the world, en
during the cold winters of parts of
Siberia where the mercury congeals
in the thermometer every winter.
Blight Resistance Stock.
Another species of very great im
portance occurs in Central China.
This species is a very vigorous grower
and thrives under the most adverse
conditions imaginable. It Is found
in swamps with its roots immersed In
water, along rock mountain streams,
on sterile, dry mountain sides where
it endures tne greatest extremes of
draught. At the Southern Oregon
Experiment Station this species has
proved markedly resistant to pear
blight and immune to the pear woolly
aphis.,
At the present time these pears are
not in the nursery trade, and they
can not be purchased anywhere.
China has no nurserymen and no
dealers from whom this material can
be purchased. These types ocur in
the remote mountains and wilds of
China and it is a hazardous task to
collect them. There are no railroads
in these sections of China, and the
Sturdy Wild Species.
Processor Reimer will collect large
quantities of these seeds for use in
this country. He will also make a
thorough systearatlo study of the
many wild species of pears of Japan
and China. At present these species
are badly involved systematically and
some of them have never been named
by botanists. It has been stated by
some explorers that one of the most
valuable of these Chinese species also
occurs In the mountains of Japan.
Professor Reimer will determine this
fact. If this should prove to be the
case it will be a matter of great im
portance, as arrangements can then
be made with some of the large Jap
anese nurserymen to collect and ship
to this country large quantities of
seeds and trees of this Important
type.
Experts from the Department of
Agriculture who have examined Pro
fessor Reimer's work on pears are
very enthusiastic over it, and the de
partment is pleased to be able to co
operate in this work in China and
Japan.
Professor F.eimer will be away for
about five months. During this time
the work of the experiment station
will be In charge of A. C. McCormick,
who Has been assistant at the experi
ment station during the past three
years.
Prot. Ruch to Teach
At University
University of Oregon, Eugene
Two new instructors in education
were elected by the board of regents
of the university at the June meet
Ing, G. M. Ruch of Ashland, an Ore
gon graduate In the class of 1914,,
will succeed R. W. Broecker, who has
returned to Michigan and expects to
teach In the middle west next year.
The other instructor is Miss Callie
Beck of McMlnnville.
Lents MIller-Mowiey mill to be-
gin operations soon
Eating Room and Tables-Free
luuch aYid use our new room
r
I Illt,A rtalJ 11
Drive Started To
Round Up Slackers
Portland, June 14. The period of
grace for men of military age who
failed for any reason t,o register on
War Census day is ended.
From now on every s'acker is to
be hunted down without 'mercy.
There will be no more leniency.
Governor Withycom.be has receiv
ed official instructions from the pro
vost marshal general, at Washington,
D. C, that the most vigorous enforce
ment of the penal clause of the law
will be required against all who have
not registered.
It is announced that the quota of
men to be drafted Into the military
service from each state will be based
on previous census estimates, not on
a C( ins.
the actual registration figures, which ! small, spotted beetle. This beetle Is
in Oregon were slightly lower than:ai)0ut the Bze and' gencrai appear
the estimate. Inasmuch as the men ance of a iady bIrd beetle, greonlsh
to be called are chosen by lot, tbe I yellow in color, with twelve black
failure to register of any man whojspot8 on the wIng coverg. They U8U.
should have done so Increases thelftlIy appear in considerable numbers
chances against every other man who 1 and ee(J voraciously on the foliage,
did his duty and registered. soon ragging the plant so thoroughly
For this reason, particularly, and'as to vitalize or even kill it. In
also as a patriotic duty, every one j a(ldtlon t0 benniIi practically all gar
of the 62,840 men who registered den and truck cropB are BubJect t0
in Oregon is asked to help In the lnJury by. thIs beettoi particularly
drive to round up the shirkers. quB8hf cucumberSi corn and egg
Already the sheriffs, police officers piant.
and precinct registrars have been in-j The BUa, recommendation of ap
structed by the adjutant general to!pIylng Bome poson t0 the foage as
report all suspicious cases. But now j practlced for m0Bt ieaf-chewing In
through the press, and in response 1 8ect pegtg wl not gerve , the me
to oinciai oraers irom wasnmgton,
all men who have registered are ask
ed to aid In this anti-slacker cam
paign.
Of course, there may be a few who
can present legitimate excuses for
not having registered. But they will
have to present them In court. The
time for leniency is passed, and Im
prisonment faces those who tried to
evade their duty to their country.
Tells of War
Relief Work
Mrs. Seymour Van Cleave, recently
returned from London, where she has
been engaged in relief work, spoke
at the Presbyterian church Monday
evening. H. L. Whlted presided over
the meeting and Mrs. Elmore sang
two patriotic selections.
When the war broke out Mrs. Van
Cleave and her daughter were in Lon
don. They threw themselves into re
lief work and also did much to assist
Americans to get out of Europe and
back to America. Later they did hos
pital work and started a knitting fac
tory In their London home. This has
grown into three large factories glv
ing employment to many women and
supplying socks for the men at the
front. Her daughter Is still in charge
of the work. Mrs. Van Cleave came
back to America and has told many
audiences of the war as she saw it.
She is not an orator, but a motherly
woman who speaks straight from the
heart. She has spent the winter in
Honolulu and will remain with her
son In New York until ocean travel Is
safe for her to rejoin her daughter,
Mrs. Seymour Van Cleave and her
sister-in-law, Mrs. Hall, were guests
the past week at the home of Mrs
Emily I. Bingham on Laurel street,
while en route from Honolulu to the
east. The three ladles were friends
in Minneapolis some years ago. Mrs,
Van Cleave now lives In New York
city and Mrs. Hall in Honolulu.
Crater Lake Road
Work to Continue
Crater Lake park Improvements
will continue this season. United
States engineers of the first rivers
and harbors district at Portland re
ceived word from Washington, D. C,
Saturday that included in the civil
sundry bill, approved June 12, is an
item of $50,000 for carrying on the
work in the park. It will be used
for road grading and it Is expected to
be amplo for completing the most of
that kind of work.
Phone Job orders to the Tiding. ,
Mrs. A. True Lundy
i Hotel Medford. Hotel Aattln Monday
T Agents wanted for Ashland and
I Grants Pass
and tables free. Free water
For your convenience the
X Eastern Supply Co. have
T "
I decided to delay moving
into their new building
until after the big Round
up. After July 10th we
will move our shoe shop, vulcan
izing works, welding and brazing
works, bicycle shop and general
repair shop, into the big concrete
store and warehouse opposite Pub
lic library.
FRUIT and pARffi
::t:nma:i::atnjjKt:mm:mmtmmmt:::amn:r.J5aj:ttnta
Spotted licet le Injures Beans.
Young bean plants Just beginning
to grow well are boing attacked by a
of this beetle unless supplemented by
what is known as the trap-crop sys
tem. A spray of dust applied to the
plant acts as more or less of a repel
lent and it Is somewhat difficult to
ge the beetle to feed on treated foli
age. Therefore in order to avoid
their going down below ground and
eating off the stems of the plants, It
is advisable to leave a few plants here
and there, known as a trap crop for
the beetles to feed upon, and treat
the rest of the field. The most prac
tical method is, In cases where beans
are to constitute the main crop, to
plant here and there through the
bean Held a few hills of squash. The
beans should then be dusted with a
powder consisting of sulphur 85
parts, powdered arsenate of lead IB jbelow tho gen,or grn(le, and of the)
parts, and the squash vines should be(3S5 RolnR from the unIvcraltIos aT1(I
left untreated. The beetles will then !C00geB 273 were below the senloit
collect on tho untreated plants and
may be'kllled by mechanical means
here. Where no other crop is avail
able, ns a trap, a few hills of beans
here and there through tho field
should be sacrificed to tho cause and
the others treated. Generally speak
ing, a dust application is preferable
to a liquid spray, although tho liquid
arsenate of lead spray Is also very ef
fective in preventing injury by the
beetles where a trap crop is present.
A. L. Lovett, Entomology Dept., O.
A C.
A Sweet Poison for Currant and
Gooseberry Mnggot.
The fruit of currants and gooseber
ries is frequently found infested with
a small white maggot. This Is the
larvae of a delicate little fly which
deposits eggs under the skin of the
developing fruit. These flies are
present In tho field when the average
berry is about the size of a BB shot.
They spend a period of several days
in the field before beginning egg de
position. Should the weather remain
settled -without the frequent showers
of the paBt, it will be possible to al
most entirely prevent the injury by
E
Have Your Clothes
Made at Horns
John
John the Tailor
A Fit or
Cleaning" and
Pressing
KODAK FILMS
DEVELOPED
SteVenSOn, 177 East Main Street
"I Never Sleep"
and toilet.
Big Eats Cheap
Check your parcels for
pafe keeping. We cor
dially invite you to make free use
of this big cleu, light room.
Plenty of ladies and gents to wait
on you. The Eastern Supply Co.
have gone to a big expense to help
you during these three big days.
Kindly make yourself at home
with us.
Eastern
Supply Co.
- - a
this maggot by the application of a,
sweetened poison bait foi- the adult
fly. The following formula Is rec
ommended: Sodium arsenlte 1'
ounce, syrup 1 quart, water 3 gallons.
These materials should be mixed and
applied as a fine, misty spray of the
consistency of dew, allowing only a
few droplets to fall on each of th
upper leaves of the bushes. A pint
of spray should cover several bushes,
as only a few drops are necessary oa
any one bush. The adult files will
lap up this poison and be killed be
fore depositing eggs. Clear, settled!
weather is necessary for the success
ful use of this poisoned bait. A. L,
Love, Entomology Department at O.
A. C. j
Oregon Schoolboy
Soldiers 1,121
Oregon schools have responded no
bly to the call to arms.
Statistics gathered by J. A. Church
ill, state superintendent of public In
structlon, show that up to the time)
of the closing of schools a total of
1,121 students have enlisted elthetf
in the National Guard, the regular
army or the navy out of the high
schools, colloges and universities of
the state.
Of this number 736 were from the)
high schools and 385 from the unl
versifies and colleges. Of the 7381
cnlntr from the hleh schools 438 were!
grade.
The reports were received from
220 high schools of the state, and of
that number 94 reported no enlist
mental
A glance through the reports indi
cates tho preponderance of enlist
mepts wore from rural communities,
rather than from Industrial centers
Indicating that the volunteer enlist
ments have drawn most heavily on
the young men who could be used foe
farm work during the coming season.
"The public schools have been put
to the test and are found not wont
ing," stated Superintendent Churchill
in commenting upon the reports re
ceived. O.-W. R & N company's crop re
port for the Northwest ohows excel
lent prospects.
FOrt
CATARRH and
KAY FEVER
Dennis Eucalyptus Ointment
AT ALL DRUG STORES ,ffl
TUBES 25C JARS 60C
Tailoring for .
Hen and Women
for.Clothes
No Sals
Milli-McCall BId
Room Six
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