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About Central Point herald and Southern Oregon news. (Central Point, Or.) 1917-19?? | View Entire Issue (June 21, 1917)
HOW SHALL WE PAY FOR THE WAR? A Constructive Criticism on the House Revenue Bill. LOANS BETTER THAN TAXES Five Reasons Why Excessive Taxes at the Outset of War Are Disadvantage ous—Creat Britain Example Worthy of Emulation—How the Taxes Should Be Apportioned. The disadvantages of excessive taxes at tbe outset of the war are as follows: 1. Excessive taxes on consumption will cause popular resentment. Excessive tuxes on industry will disarrange business, damp enthusiasm und restrict the spirit of enterprise at tbe very time when the oppoalte Is needed. 3. Excessive taxes on Incomes will de plete tbe surplus available for invest ments and Interfere with tbe placing of the enormous loans which will he neces sary in any event. 4. Excessive taxes on wealth will cause a serious diminution of the In comes which are ut present largely drawn upon for tbe support of educa tional and philanthropic enterprises. Moreover, these sources of support would lie dried up precisely ut the time when the need would he greatest. 5. Excessive taxation at the outset of the war will reduce the elasticity avail able for the increasing demands that are soon to como. Great Britain's Policy. Take (treat I’.ritaln us an example. Fairing the Hist year of t„e war she Increased taxes only slightly. In ordei to keep bid' I l ies going at top notch. During tbe second year she raised by new taxes only !> per cent, o f her war expenditures. During tbe third year she let led liy additional taxes (over and above tbe pre-war level! only slightly more than 17 per cent, o f her war expenses. If we should attempt to do as niutli In the first year of the war as flreat rtrltain did In the third year It would sutltcc to raise by taxation S1.2r.d.00t). Oisi. If In order to he nhs dutely on tbe safe side, it seemed advisable to Increase tbe sum to $ 1.500.000.11! if). this should, in our opinion, he the maxi Dy EDWIN R. A. SELIGMAN, McVickur ITuft-snor oi Poll t Ini I Kcon- omy, Columbia University, tin Mn.v 23. IU17. Hie House of Rep resentatives passed mi act "to provide revenue to tlefrn.v tvur expenses a ml for oilier purposes.” In tbe original hill as presenleil by (lie ('oiuinillee of Ways and Means, the additional reve nue to be derived was estimated at $1,- 8I<>. 11111,000. The auiendment to tbe In- eouie tax, which was larked on to tbe bill during I be diseiissiou In Hie House, was expc led to yield another $ tn.i« hi .. 000 or $30.01 H1.000. Ill discussing tbe House hill, two problems arise I. How niueli should he raised by taxation? II. In what milliner should Ibis sum lie raised? mum. In <■< nslderiiig tbe apportioning, ' of I. How Much Should Ba Raised by the extraordinary bind n o f taxes In T axation? How was tbe figure of $1,800,000,000 war times certain s' ienlifle principles arri' ed at V The answer is simple. When are definitely established: tbe Secretary of tlie Treasury came to How Taxes Should Ba Apportioned. . estimate tbe additional war expenses (It Tiie burden of u»xis must he for tbe year 1017-hS. lie calculated that spread as far us possible over file they would amount lu some $ 6 , 000 .- whole community so as to cause each Ouo.ooo. of which $3.iNKMMm.tii;o was lo individual H share in tbe su< riliees ac lie allotted to the allies, and $3.0,10, cording to Ids ability to pay and ac Ooo.ooo was to he utilized for tbe do- cording to Ills share In the Government. uiesilc purposes. Thinking that it i2i Taxes on consumption, which are would he a fair proposition lo divide necessarily home by the < ouimtiulty at this latter sum between loans and large, sln uhl he Imposed as fur us pos taxes, be concluded Hint tbe amount sible on nrtl les o f ipiusl-luxury rather to lie raised by taxes was $1.8oo,llUU,- than on those o f no. ossify. 000. (Hi Excises should he Imp iscd as fur There are two extreme theories, each as possible upon commodities In (lie of which may he dismissed with scant hands of Hie Hunl consumer rather courtesy. The one Is that all war ex than upon the articles which serve pri penditures should he defrayed liy loans, marily as raw material for further and the other is that all war expend! production. tures should he defrayed by tuxes. (4i Taxes upon business should lie Eai h theory is unit liable. lm|Hised as fur ns |siss!hle upon net It Is indeed true that I In* burdens of earnings rather Haiti upon gross re the war should he borne by the pres ceipts or capital Invested ent rather Ilian the future generation. to» Taxes upon income which will but this does in t mean that they should ne essarll.v l e severe should le Isith be borne by this year's taxation. differentiated and graduated That Is Meeting ud war expenses by taxation there should tie u disttm th n between makes tbe taxpayers In one or two earned and unearned incomes mid there years hear the burden o f hcm-llls that should he a higher rate upon tth- larger ought to lie distributed at least over a Incomes. It Is essent'al. however, not deci.de williin the same generation. to make th ■ Income rate so excessive In tbe second place, when expendi as to lead to evasion, administrative tures uppnach the gigantic sums of dil.lcultl. s. or to Hie more fundamental present-day warfare, the tux-only ( k >I- objections which have been nrged lcy Would reiinlre more than the total above. surplus « f social Income. Were this (ill The excess profits which are due absolutely no essary. tbe ensuing hav to the war constitute the most obvious oc In the economic life of the communi and reasonable source o f revenue dur ty would have to he endured, lint ing war times. Hut the principle upon when» the disasters are so creat and which these war protit taxes are laid hi the same time so unnecessary, the mast he ci|uttnhlc in theory uml easily tax-cnlv pi Hey may be declared Im calculable in practice. practicable. Th» Proposed Income Tax. Secretary MoAdoo bad the right In The additional Income tax as passed stim t and tiifrhly commendable cour by the Home runs up to a rate of HO a g e III deciding that a substantial por per rent. This Is a sum unheard o f In tion. at least, o f the revenues should the history o f civilized society It must be derived from taxation. Hut when he remembered that tt was only after be bit upon the plan o f r.it-50 per cent., the tlrst year of the war that flreat that Is. of raising one half of all do mestic war expenditures bv taxes, the Hritalu lm reused her Income tax to the «juestlon arises whether he did not go maximum of ill per emit., and that even now in ihe fomth year o f the war too far the Income lax dues not exceed 42'a The relative proportion of loans to per < cut. taxes Is after all a purely business It could easily lx> shown that a tax proposition. Not to rely to a la rue ex with rates on moderate Incomes sub tent on loans at the outset of a war Is stantially less than In flreat Hrit.ifn. a mistake and on the lar- er hi one s ah. ut ie P v*»** « T high, would yield only slightly less than the $.">32,000,000 originally estimated in the House hill. It Is to l o hoped that the Senate will reduce tin- total rate on the highest In comes to 114 per cent, or ut most to 40 per cent, and that at the same rime it will reduce the rate on the smaller 111 comes derived from personal or profes slonal 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 House lull contains other funda mental defect« which may he summed up as follow s: ( l i l t pursues an erroneous principle In imposing retroactive tuxes. ( 2 1 It selects an unjust and unwork able criterion for the excess-profits tax. (3i It proceeds to an unheard-of height in the income tax. (4t It imposes unwarranted burdens upon the consumption of the commu nity. ( 5 1 It Is calculated to throw business into confusion by levying taxes on gross receipts Instead of upon commodities. (Hi It fails to make a proper use of stamp taxes. (7» It follows an unscientific system in its tint rate on imports. (81 It Includes a multiplicity of pet ty and unlueratlve taxes, the vexatious ness of which is out o f all proportion to the revenue they produce. The fundamental lines on w hich the House lull should I e modified are sum med up herewith: ill The amount o f new taxation should he limited lo $ 1 ¿AHl.OOO.OOO—or at the outset to Sl.ouo.tiuo.ono. To do more than this would he as unwise as it Is unnecessary. T o do even this would he lo do more than lias ever been done by any civilized Govern ment la t' e o f stress (Ji The ex. ess profits tax based upon a sound system ought to yield about i-.-.i i i.rco.oon. (3i The In omc-lux schedule ought to tie revised with a lowering o f the rates on came I Incomes below $10,000, and with an annlorui'i lowerin'; o f th^ rales on the higher Incomes, so ns not to exceed 34 per cent. A careful cal culation shows tlml an Income tax of tills kind would yield some $450,000.- oco additional. i 4 i Tlie lax on whisky and tobacco , light to remain approximately as It Is. with a yield o f about $230.ooo.ooo. These three taxes, together with the stamp tax at even the low rate o f the flouse bill, and with an Improved au tomobile tax. will yield over $1,230.- ooo.noo. which Is the amount of money thought desl* rvHe. The above pro rum would he lu bar. uiony with nti approved scientific sys tem. It wl l do away with almost nil of the complaints that are being urged against the present. It will refrain from taxing the cc lsmnptlon o f the poor. It will throw a far heavier burden upon the rich, but will not go to the extremes o f confiscation. It will ob viate Interferon e with business and will keep unimpaired the nodal pro ductil ity o f the community. It will establish a Just halun e be tween loans and taxes and will not succumb to the dancer of approaching either the far-opl> poller or the loan only policy. Above all. It w 'll keep an undisturbed elastic mar'In which must l e more ntd more heavily drawn *T> I' . t h e T a r ! • ' o a - X Write Us -A. ❖ For prions on diamond» an»i watches. Mail u» your watrh ami > Martin J. Roddy ♦ MFPFORD - htflen Dugan Wins Writing Contest First honors in the Jaekson County Writing Contest go to a 10-year old girl in the fourth grade of Long Moun tain School District No. 37, near Eagle Point. Mr. A. N. Palmer, author o f the State text, “ The Palmer Method,” has awarded prizes to the nine students in Jackson county who made greatest progress in penmanship during the past year. The writing papers show ing the students’ hand writing were collected at four different times during the year. These furnished a basis upon which to judge improvement. In commenting upon the work Mr. Palmer savs : “ These children have made great progress. Most o f them wrote a little pinched hand in the fall, while now they write with freedom. Geneva Mandeville, who won third place, did not write at all, but just drew her letters very slowly with a heavy movement. The penmanship of Kendall Hall is far better than any of that on which prizes were awarded, but he wrote a fairly good hand last fa ll.” The prize winners, with the schools they attended, are : First Helen Dugan, Long Mountain School, Eagle Point. Second— Elva Coleman, Jacksonville School. Third—Geneva Mandeville, Oak Grove Medford. Fourth—Lucile Abbott, Jacksonville School. Fifth Hold- J hnson. Rock Point, Gold Hill. Sixth—Glenn McDaniel, Applega.e School. Seventh—Lois Hall, Central Point School. Eighth May Clarke, Talent School. Ninth Kendall Hall, Central Point School. The prizes will be sent directly from Mr. Palmer’s office in New York to each o f the above contestants. W o rd s of Praise Mr. J. 0. Isaacson, president o f the Central Point State Bank, is the recipient o f the following: commendatory note, written by J. G. Rhodes, inter-State secre tary o f the military branch o f the Y. M. C. A.: A km y D e p a r t m e n t , Y. M. C. a . j or i tautooN and I daho , Portland, Ore., June 15, 1917. > M r . J . O . lim a ra o n . C e n t r a l P o i n t : Dear Sir : We wish to acknowledge, with many thanks, receipt o f your re- p irt and draft covering $06 80. Your report was in splendid shape, and was greatly appreciated by the yourg ladies who have the responsi bility o f checking the reports as they come in. Some of ¿hose reports are in awful shape. Yours was a real pleasure. Thanking you for your co-operation, we remain Yours very sincerely. Y. M. C. A. W ar W ork C ouncil . By J. B Rhodes Interstate Sec’y. W. L. Runyan, the form tr jeweler o f this city, who has been in Lake county looking after the interests of the nitrate mines which he and R. H. Paxson and otuers own, returned last week. He only stopped here a short time, going cn to Wmalhurn to visit with his wife and her folks for about a month. H ouse o r Q u a l it y - ORF.liON \N < i ay nuti cl .ire« Arsenate of Lead, one, two and five pou^d parkas*»*, at t’ Hxaon’ a.