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HOW SHALL WE PAY FOR THE WAR? * / A Constructive Criticism on th? House iiovonue BiiL LOANS BETTER THAN TAXES Five Reasons Why Excessive Taxes at the Outset of War Are Disadvantage ous —Great Britain Example Worthy of Emulation —How the Taxes Should Be Apportioned. By EDWIN R. A. SELIGMAN, McVlckar Professor of Political Econ omy, Columbia University. On May 23, 1917, the House of Rep resentatives passed an act “to provide revenue to defray war expenses and to r other purposes.” In the original bill as presented by the Committee of Ways and Means, the reve nue to be derived was estimated at sl,- 810,420,000. The amendment to the In come tax, which was tacked on to the bill during the discussion In the House, was expected to yield another $40,000, 000 or $50,000,000. In discussing the House hill, two problems arise: L How much should be raised by taxation? 11. In what manner should this sum THE GREAT LEMON Who Makes the Deaf Hear and the Cripples Walk. Your last chance to see the Great Lemon give his demonstrations at the corner of Main and Gilmer streets, V next to the Tribune office. Free Band and Minstrel Show COMMENCES EVERY NIGHT AT 7 P. M. SATURDAY, JUNE 16th Show Will Open at 10:30 a. m., and Run Until 10 and. m. m Vital Strength nd Sealon Oil Two Great Medicines. See the Great Lemon The Next Issue of The Bell Directory GOES TO PRESS SOON Bell subscriber, almost without exception, is able to bur the t>de advertised In this Reserte ' your epace today. Ask the Manager for rates. Supplements Changes and your other Klvl corrections advertising j in listings but does not should be conflict W made at once with other fi for the new Waites be raised? I. How Much Should Be Raised by Taxation? How was the figure of $1,800,000,000 arrived at? The answer is simple. When the Secretary of tlie Treasury came to estimate the additional war expenses for the year 1917-18, he calculated that they would amount to some $6,600. 000,000, of which $3,000,000,000 was to be allotted to the allies, and $3,600. 000,000 was to be utilized, for the do mestic purposes. Thinking that il 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.- 000. There are two extreme theories, each of which may l>e 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 ley 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. Rut where the disasters are so great and at the same time so unnecessary, the THE BAfiTC'.V r RIEU\E-THE CAR TERSVILLE NEWS, JUNE 14, 1917. tax-only policy may be declared im practicable. Secretary McAdoo had the right in stinct and highly commendable cour age in deciding that a substantial por tion, at least, of the revenues should be derived from taxation. But when he hit upon the plan of 50-50 per cent., that is*, of raising one-half of nil mestic war exr>enditurefe 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. Xot to reiv to a large ex tent on loans at tlie 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 fot 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. Excatsivs taxation at the outset of the war will reduce the elesticity avail able for the increasing demands that are soon to corns. Grsat 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 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 maxi mum. In considering tne apportionment ol 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 possible over the whole community so as to cause each individual to share in the sacrifices ac cording to his ability to pay and ac cording to his share in the Government. (2) Taxes on consumption, which are necessarily borne by the community at large, should be imposed as far as pos sible on articles of quasi-luxury rather than on those of necessity. (3) Excises should be as far as possible upon commodities iu the hands of the fiual consumer rather than upon the articles which serve pri marily $8 raw material for further production. • v (4) Taxes upon business should be imposed as far as possible upon net earnings rather than upon gross re ceipt*! Cl capital invested. (5) upoii iBCO&ie which will necessarily be severe should be both differentiated ami graduated. That is, there should he a distinction between earned and unearned incomes and there should he a higher rate upon the larger Incomes. It is essential, however, not to make tile income rate so excessive as to lead to evasion, administrative difficulties, or to the more fundamental objections which have been urged above. (0) The excess profits which are due to the war constitute the most offvious and reasonable source of revenue dur ing war times. But the principle upon which these war-profit taxes are laid must be equitable in theory and easiiy calculable In practice. The Proposed Income Tax. The additional income tax as passed by the House runs up to a rate of 60 per cent. This is a sum 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 421^ ! feT Sent. ; mw■ Tt could easily be shown that a ta* with rates on moderate incomes sub stantially less than iu 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 j 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 bill eoutaius other funda mental defects which may be summed op ns follows: il) It pursues an erroneous principle in imposing retroactive taxes. (2) It selects an unjust and unwork able criterion for the excess-profits tax. (3> 'lt proceeds to an unheard-of height in the income tax. (4) It imposes unwarranted burdens upon the consumption of the commu nity. (5) It is calculated to threttv business into confusion by levying taxes on gross receipts instead of upon commodities. (6) It fails to make n proper use of stamp taxes. (7) It follows an unscientific system in Its fiat rate on imports. (8) It includes a multiplicity of pet ty and unluerative taxes, the vexatious ness of which is out of all proportion to the revenue they produce. ******* The fundamental lines on which the House bill should he modified are sum med up herewith: (1) The amount of new taxation should be limited to $1,250,000,000—0r at the outset to $1,500,000,000. To do more than this would he 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 sound 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 below SIO,OOO, and with an analogous lowering of the rates on the higher incomes, so as not to exceed 34 per cent. A. careful cal culation shows that an income tax of this kind would yield some $450,000,- 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 tb" consumption of the poor. It will throw a far heavier burden upon the rich, but will not go to the extremes of confiscation. It will ob viate interference with business and will k p 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 must be more and more heavily drawn upon as the war proceeds. MISS LACKEY SAVES DROWNING CHILD. .Miss Annie Lackey, a popular young lady, of near Acworth, formerly of Cartersville, came near losing her life last Monday while trying to save a child from drowning. The child was standing on a log over the creek when Take Our Advice • . —Buy Now! fm Tffiw M mi .Mill I l ’~f ~rf t I 1 / / SCHLOSSj V l I I I ■ / i y W Ml -v- \ They’ve always meant sound, well-tested fabrics; fast colors; style; fit; satisfaction. We still have the same good clothes for you at no advance in price. See for yourself. The clothes we sell must give satisfaction; if not, suit or your money back. We sell nothing but good merchandise' $lO = sls = $lB = S2O = $25 We Fit the <4 Hard*to=Fit” hi Our Special Sizes for Men and Young Men J. W. Vaughan & Cos. Cartersville, Ga. Phone 122 Miss Lackey told her to Come away. The child did not obey but started to go on further out over the water ami fell in. Miss Lackey could swim well so she vent after her. The child caught her by the head utter she succeeded in reaching her and pinned it beneath the .water. There were three other ladies oil the bank and their screams brought a man from a nearby field. In the struggle Miss Lackey had freed her head from the child and was making for the shore. She gavq.. the child to the man and fell unonscious upon the bank. Miss Lackey was carried to a house near by where she still remains very ill. Soy Beans For Grain and Hay By John R. Fain, Professor of Agrono my, State College of Agriculture. Especially in North Georgia the Soy Bean should receive more atttention than has been given it in the past. For a grain producer on good soils this crop can scarcely be surpassed. It yields more bushels of grain per acre than do Cowpeas and the grain is rich in protein. For hog grazing it stands as North Georgia's most promising crop. Soy Beans will not produce well on poor worn lands however and should never be planted there. The Cowpea will remain the best legume for this kind of land. It seems to stand ad verse conditions here better than the soy bean but on good land the soy bean is hardier. For grain soy beans should be BARGAIN Splendid combinationffhorse, 1 0 years old; weighs 1 1 00 lbs; bay; works to plow or wagon. Cash or good note. LjJ. FORRESTER. \TOW is the time to buy your suit. It’s a well-known fact that they’re going to be higher—and poorer; so lay in your supply. We know what conditions are getting to, in the trade. Take our advice—-buy now! Buy the right kind of clothing—the hand-tail ored, dependable garments available now— and you can’t go wrong. We will help and advise you. You’ll find, here, the best that can be bought--the famous Si2±2M Clothes planted in 30 Inch rows and culti" vated once or twice. By this method a larger crop will be grown. Bean, planted in this manner during early spring will be ready to graze from August to October depending on the variety. The Ito San and Hamber. landt are examples of early kind." and the Mammoth Yellow and Black of late kindS. An average yield should graze from eight to fifteen, 100 pound hogs for thirty days. Graz ing may be begun as soon as the pod 3 * turn yellow. For hay the soy bean will be used largely on rich land where Cowpeas are inclined to fall down and tangle’ The soy bean plants grow erect so are easy handled. The yield is Usu . ally a little greater than the yield of cowpeas, but there is some more waste in feeding it. The same rate of seeding employed with cowpeas should be used. For grain only a half bushel per acre will be necei sary. Soy beans are susceptible to wilt and nematodes hence should not b grown on lands infested with either of these. In South Georgia the crop fails to seed quite often but alway* makes a good yield of hay. i STOP IN ATLANTA] I AT HOTEL EMPIRE Opposite Union Depot on Pryor m St, Renovated and refurnished . 1 throughout. Reservations mad* I on application. Hot and cold H water, private baths, else trio I lights and elevator. First class fH accommodations at modsrsts I prices. I Rooms SOc anWp t JOHN L. EDMONDSON, Prop, Special Styles in Straw Hats Now Ready— sl.oo to $5.00