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? ?r \j HOW SHALL WE |: PAY FOR THE WAR?, i A Constructive Criticism on the House Revenue Bill. LOANS BETTER THAN TAXES Five Reasons Why Excessive Taxes at the Outset of War Are Disadvantageous?Great Britain Example Worthy of Emulation?How the Taxes Should Be Apportioned. By EDWIN R. A. SELIGMAN, McVlckar Professor of Political Economy, Columbia University. On May 23, 1917, the House of Representatives passed an act "to provide revenue to defray war expenses and for other purposes." In the original bill as presented by tlae Committee of Ways and Means, the additional revenue to be derived was estimated at ?1,C1f? 4<>nnfin Tho omonrlmont tn thp In- * ^MVlOMV^WV* -4.MV MU1VUMUUVMV ^ come tax, which was tacked on to the 8 bill during the discussion in the House, was expected to yield another $40,000,- t 000 or $50,000,000. 8 In discussing the House bill, two i problems arise: \ L How much should be raised by i taxation? c II. In what manner should this sum be raised? I. How Much Should Ba Raised by ? Taxation? p How was the figure of $1,800,000,000 t arrived at? The answer is simple. When fc the Secretary of the Treasury came to t estimate the additional war expenses ? for the year 1917-18, he calculated that n they would amojint to some $6,600,- e 000,000, of which $3,000,000,000 was to t! be allotted to the allies, and $3,600,- p 000,000 was to be utilized for the domestic purposes. Thinking that it v would be a fair proposition to divide s this latter sum between loans and a taxes, he concluded that the amount h to be raised by taxes was $1,800,000,- tl 000. tl ?i iU i xuere are two eAireiue Luxuries, taiu of which may be dismissed with scant ri courtesy. The one is that all war ex- c penditures should be defrayed by loans, p and the other is that all war expendi- ^ tures should be defrayed by taxes c Eftcl} theory is untenable. s! It is Indeed true that the burdens of the war should be borne by the pres- d gnfr rather than the future generation; c {but this does not mean that they should " be borne by this year's taxation. Meeting all war expenses by taxation h makes the taxpayers in one or two years bear the burden of benefits that ought to be distributed at least over a n decade within the same generation. In the second place, when expenditures approach the gigantic sums of ^ present-any wariurw, tue uia.-um,y ijuiicy would require more than the total surplus of social income. Were this absolutely necessary, the ensuing hav- h '6c in the economic life of the community would have to be endured. But D where the disasters are so great and n at the same time so unnecessary, the tax-only policy may be declared im- ^ practicable. r Secretary McAdoo had the right instinct and highly commendable courage in deciding that a substantial portion, at least, of the revenues should ^ be derived from taxation. But when he hit upon the plan of 50-50 per cent., t that is, of raising one-half of all do- D 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 1 proposition. Not to rely to a large ex- 1 tent on loans at the outset of a war is a mistake. 6 Disadvantages of Excessive Taxes. r The disadvantages of excessive taxes j at the outset of the war are as follows: , it 1. Excessive taxes on consumption j. 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. t 3. Excessive taxes on Incomes will deplete the surplus available for invest- ^ ments and interfere with the placing of r the enormous loans which will be neces-j t sary in any event. I c 4. Excessive taxes on wealth will t cause a serious diminution of the in-1 f comes which are at present largely j drawn upon for the support of educational and philanthropic enterprises, j Moreover, these sources of support j would be dried up precisely at the time ! when the need would be greatest. ; 5. Excessive taxation at the outset of I the war will reduce the elasticity available for the increasing demands that are soon 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 at top notch. During the second year she raised by new taxes only 9 per cent, of her war expenditures. During the third year to lit? lCViCU UJ UUU1UVUU1 lUA^O \\j > Ul 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, iu 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 Che apportionment o Che extraordinary burden of taxes ii war times certain scientific principle are definitely established: How Taxes Should Be Apportioned. (1) The burden of taxes must bi spread as far as possible over thi whole community so as to cause eaci individual to share in the sacrifices ac wording to his ability to pay and ac :ording to his share in the Government (2) Taxes on consumption, which an lecessarily borne by the community a arge, should be imposed as far as pos sible on articles of quasi-luxury rathei :han on those of necessity. (3) Excises should be imposed as fai .O nnccihlo nnnn rnmmoditios in tll< lands of the final consumer rathei :han upon the articles which serve pri narily as raw material for furthei jroduction. (4) Taxes upon business should b( mposed as far as possible upon nel jarnings rather than upon gross re ;elpts or capital invested. (5) Taxes upon income which wil1 lecessarily be severe should be bott iifferentiated and graduated. That is :here should be a distinction between >arned and unearned incomes and there ihould be a higher rate upon the largei ncomes. It is essential, however, nol :o make the income rate so excessive ts to lead to evasion, administrative lifflculties, or to the more fundamental >bjections which have been urged ibove. (6) The excess profits which are due o the war constitute the most obvious ind reasonable source of revenue dur ng war times. But the principle upon vhich these war-profit taxes are laid nust be equitable in theory and easily alculable in practice. Th? Proposed Income Tax. The additional income tax as passed ?y the House runs up to a rate of 6C >er cent This is a sum unheard of Id he history of civilized society. It must ie remembered that it was only aftei he first year of the war that Greal {ritaln increased her income tax to the aaximum of 34 per cent., and that ven now in the fourth year of the wai he income tax does not exceed 42]/s er cent. It could easily be shown that a tas ?ith rates on moderate incomes subtantially less than in Great Britain, nd on the larger incomes about as igh, would yield only slightly less than tie $532,000,000 originally estimated in tie House bill. It is to be hoped that the Senate will educe the total rate on the highest inomes to 34 per cent, or at most to 40 er cent, and that at the same time it rill reduce the rate on the smaller inomes derived from personal or profeslonal earnings. I If the war continues we shall have to epend more and more upon the inome tax. By imposing excessive rates ow we are not only endangering tha uture, but are inviting all manner of ifficuItiea which even Great Britain as been able to escape. Conclusion. The House bill contains other funda* lental defects which may be summed p as follows: /1\ T4- ?? awatiAnnc nHtipinlfl \i; xl |>uiauco au ciivucvu^ i imposing retroactive taxes. (2) It selects an unjust and unworkble criterion for the excess-profits tax. (3) It proceeds to an unheard-of eight in the income tax. (4) It imposes unwarranted burdens ipon the consumption of the commuity. (5) It is calculated to throw business ato confusion by levying taxes on gross eceipts Instead of upon commodities. (6) It fails to make a proper use ol tamp taxes. (7) It follows an unscientific system a its flat rate on imports. (8) It includes a multiplicity of pet y and unluerative taxes, the vexatious icss of which is out of all proportion tc he revenue they produce. ? v * The fundamental lines on which the Jouse bill should be modified are sum neci up nerewua: (1) The amount of new taxatior hould be limited to $1,250,000.000?01 it the outset to $1,500,000,000. To d< aore than this would be as unwise aj t is unnecessary. To do even this vould be to do more than has evei >een done by any civilized Govern uent in time of stress. (2) The excess-profits tax based upor i sound system ought to yield aboul 1500,000,000. (3) The income-tax schedule ought t< >e revised with a lowering of the rate: ?n earned incomes below $10,000, anc vith an analogous lowering of th< ates on the higher incomes, so as noi o exceed 34 per cent. A careful cal ulation shows that an income tax oi his kind would yield some $450,000, )00 additional. (4) The tax on whisky and tobacc< night to remain approximately as it is vith a yield of about $230,000,000. These three taxes, together with th< stamp tax at even the low rate of thi Flouse bill, and with an improved au iomobile tax, will yield over $l,ZdU, )00,000, which is the amount of mone^ Ihought desirable. The above program would be in har uony with an approved scientific sys tern. It will do away with almost al 5f the complaints that are being urge* igainst the present. It will refrah from taxing tbc o/insuraption of th poor. It will throw a far heavier burdei upon the rich, but will not go to thi extremes of confiscation. It will ob viate interference with business am will keep unimpaired the social pre ductlvity of the community. It will estnbiisli a just Daiante ut tween loans and taxes and will no succumb to the danger of approachlni either the tax-only policy or tlie loan only policy. Above all, it will kee; an undisturbed elastic margin, whic] must be more and more heavily drawi upon as th/? war proceeds. I Cigar Salesman 9 Has Been Cured Of Indigestion e ? Mr. Sam D. Bennett, of Atlanta, j Tells Friends How He Was Cured After Years of Suffering?Almost Forced to Quit Road, But is Now . Well. D 1 "For many years I suffered from | severe attacks of indigestion," says i r Mr. Sam D. Bennett, prominent travr eling salesman for Cobb Cigar com; pany. "At one time I thought that fjl would have to quit the road as 1' -(was troubled so bad. A friend of r mine advised me to try Dr. Jackson's; Cordial. Acting on his advice I beJ!gan taking it. One bottle certainly 'iput me right and since taking it I 'have not lost an hour's work. I cerlitainly feel indebted to Jackson's Cort dial and am telling all of my friends , to try it." i Mr. Bennett is one of the most - prominent traveling men on the road and is well known over the entire ' state of Georgia. He is one among | the thousands who have found per[ manent relief after taking Jackson's [ Cordial. Speaking further, Mr. Bennett i says: "I have tried all kinds of med1 icine for indigestion and Jackson's Cordial is the only kind that ever did ' me any good. I gladly recommend it , to all who suffer as I am sure thai; it will cure them." Jackson's Cordial is a sure cure I for all forms of indigestion, constiI pation, dysentery, diarrhoea, sick i|neaaache, biliousness, and all stomiach, liver, kidney and blood trou! bles. As a spring tonic it cannot be I equaled and is given to children with ! wonderful results. i If you suffer get a bottle today , I and begin treatment. Why suffer when your neighbor has been cured? For sale by McMurray Drug Co., I. T. Brown, Evans Bros., and Bar nett. Calhoun Falls Drug Co., MarI tin and Calhoun Falls Mill Store.? II Adv. ' j ? V DIAMOND HILL. V V V uvvvvvvvvvvvvvv Diamond Hill, June 18.? Mrs. Bettie Richardson is staying with Mrs. 0. B. Rogers and family. Mrs. Richardson is an aunt of Mrs. Rogers ! and is well known all over the county, having lived in Lowndesville several years ago but is now making her home in Hartsville, Ga. Mr. and Mrs. Arthur Campbell and little son, S. A., spent Sabbath with Mr. and Mrs. Hoyt Campbell. Mr. Joe Prince of Antreville, visited relatives here Saturday and Sunday. Born?to Mr. and Mrs. Charlie Daniel last week, a son. Mr. Ben Napier of Monterey, was visiting here Sunday afternoon. | Messrs. J. J. Grant, J. H. Fergu! son were in Abbeville Saturday. Many young and aged men and women enjoyed the ice cream which was served by the Woodmen Circle ' and the Nation Helping Unit Saturday afernoon. Next Sunday is Cradle Roll day. ( | Every one is invited to come and 1 bring the baby and put its name on < the Cradle Roll at Bells church. 1 Mr. W. C. Ferguson visited his , brother, Mr. Bert Ferguson near Iva, j Sunday. tj Mr. and Mrs. Charlie Cli:ikscales i jand daughter of-Lowndesville, were 'Iguests of Mr. and Mrs. W. D. Bell. Mr. and Mrs. Will Bell of Virginia, are spendng a few weeks with . jMr. and Mrs. Mason McMahan. i |1' b 1 Everyone Should | Drink Hot Water I in the Morning Wash away all the stomach, liver, and bowel poisons before breakfast I To feel your best day in and day J out, to feel clean inside; no sour bile 3 to coat your tongue and sicken your [ breath or dull your head; :no consti, pation, bilious attacks, sick headache , colds, rheumatism or gassy, acid - stomach, you must bathe on the ini side libe you bathe on the outside. 1 This is vastly more mportant, be* cause the skin pores do not absorb 1 impurities into the blood, while ' the e bowel pores do, says a well known a physician. B To keep these poisons and toxins k well flushed from the stomach, liver, 1 kidneys and bowels, drink before ?-, breakfast each day, a glass of hot water with a teaspoonful of limej* stone phosphate in it. This will cleanse, purify and freshen the en* tire alimentary tract, before putting p more food into the stomach. k , Get a quarter pound of limestone a phosphate from your pharmacist. It is inexpensive and almost tasteless, A I t ; Mom WE will t insurin THEF ally charged foi ;; policy. This pol large surplus ar Cars listed i cent Cars listed ai ing Fords, 1 1-2 made, For further i] ?; Peebles." Are you goin summer? If so, Policy, which w have and defen liable. Without with protection TALK IT OVER Abkvill Tru. I A: 11 < I (, <1 (I o '1 . 11 < II <1 except, a sourish twinge which is not GIRL unpleasant. Drink phosphated hot ivater every morning to rid your system of these vile poisons and toxins; Make also to prevent their formation. Cei To feel like young folks feel; like you felt before your blood, nerves and muscles became saturated with Yo accumulation of body poisons, begin any c this treatment and above all, keep suppl it up! As ?oap and hot water act on chard the skin, cleansing, sweetening and the ji rmvi former en limpcf-nnp nhosnhate and l^UA1AJ x- x hot water before breakfast, act on and s the stomach, liver, kidneys and ter p bowels. ?Adv. YOU'RE BILIOUS! LET "_ "CASCARETS" LIVEN *1 LIVER AND BOWELS I Don't Stay Headachy, Constipated, Sick, With Breath Bad and Stomach Sor. Get a 10-cent box now. , You men and women who can't get feeling right?who have headache, i coated tongue, bad taste and foul j breath, dizziness, can't sleep, are bil- ' ious, nervous and upset, bothered with a sick, gassy, disordered stomach, or have a bad cold. a Are you keeping your bowels clean I with Cascarets, or merely forcing a passagewey every few days with salts, cathartic pills or castor oil? Cascarets work while you sleep; cleanse the stomach, remove the sour undiested, fermenting food and foul ' gases; take the excess bile from the liver and carry out of the system all the constipated waste matter and poison in the bowels. A Cascaret to-night will straighten vo out by morning?a 10-cent box . from any drug store will keep your j J i stomach sweet, liver ana Doweis reg ular, and head clear for months. \ Don't J'orget the children. They love Cascarsts because they taste good? never gripe or sicken.?Adv. ^ I > ? ? im. rmi/\m,i i 1 1 LfN 11UJN! lobile Own jive you a VALUED P' g you against loss by F; T at the same rate thai * fire only and with a non licy is backed by a compa: id cash capitol of $1,000, around $1500.00 rate 1 ound $1000.00 and less * per kciii) nu 111 Aiimluin nformation "Talk it ovt g to take a trip in your c protect yourself with a L ill cover any accident yc d any suit for which you protection your risk is the cost is small. WITH W. L. PEEBLES, MANAGER e Insurant st Company BBEVILLE, S. C. S! WHITEN SKIN whiter WITH LEMON JUICE known " cream; a Beauty Lotion for a few its to Remove Tan, Freckles, nGC ' Sallowness. ^OW fl and r< ur grocer has the lemons and smootl IWM/* AV fAIIAI rtrtnr\fnr Tin 11 OOTY1 PS. II Ug ovvic ui vvuiitwi n?u w? y you with three ounces of or- beauti [ white for a few cents. Squeeze Adv. uice of two fresh lemons into a then put n the orchard white Don shake well. This makes a quar- well I int of the very best lemon skin Philsoi ftlenhone Your Ice MUMBIA* CANI NEXT TO THE CO PHONE 56 11 I <1 I > # + 9 ? ( i ?n ( h .... > < i? < > l i < ? l 1 *f l. n "* ers OLICY [RE or t is usu- :; valued ny with 000.00. ! I > 1-4 per includcharge ir with :ar this lability >u may may be great, of u ;; i & er and complexion beautifier Massage ' this fragrant, y lotion daily into the face, arms and hands and just see eckles, tan, sallowness, redness >ughness disappear and how 1, soft and clear the skin beYes! It is harmless, and the ful results will surprise you.? 't fail to taste a cup of Max- * louse Coffee served free at n & Henry's Wednesday. i CreamOrder Our pure ICE CREAM and real fruit flavors make the refreshments that you get at our sanitary fountain really nourishing food. ? STOP INHERE and' get a thirst-quencher; then take a pail of good cream home to the family; of leave your order: We'll deliver it. Quart .40 1-2 Gal. .80 Brick# .50 Gallon ? ???$1.60 (Any Flaror) )Y KITCHEN: URT HOUSE .... -,< ? r? _ , .-it'- . ; > ' t~xi '"fm* * '* ' *'7 ( i