The Abbeville press and banner. (Abbeville, S.C.) 1869-1924, June 20, 1917, Page TWO, Image 2
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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?
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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