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? Constructive Criticism co tee
House Revenue Bill.
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
By EDWIN R. A. SELIGMAN,
McVickar 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 aud
for other purposes." In tue original
bill as presented by the Committee of
Ways and Means, the additional reve
nue to be derived was estimated at $1,
610,420,000. The amendment to the bi
corne tax, which was tacked on to the
bill during the discussion in the House,
was expected to yield another $4U,0U0.
000 or $50,000,000.
In discussing the House bill, two
I. How much should be raised by
II. In what manner should this sum
I. How Much Should Be Raised by
How was the figure of $1.500.000.000
arrived at? The answer is simple. When
the Secretary of the Treasury came to
estimate the additional war expenses
for the year 1017-1S. 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, aud $3.600,
000.000 was to be utilized for the do
mestic purposes. Th in king 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 S1.SOO.000.
There are two extreme ihoories, 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 ia that all war expendi
tures should be defrayed by taxes
Each theory is untenable.
It is indeed true that the burdens of
"-""?. t-j,T,],! ])0 iiorne by the pres
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. But
where the disasters are so great and
at the same time so unnecessary, the
^ax-only policy may be declared im
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. Put when
he hit upon the plan of 50-50 per cent.,
that is, of ru ?sing one-half of all do
mestic war expenditures by taxes, the
question arises whether he did not go
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
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
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
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, ba 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
If we should attempt to do as much
in the first year of the war as Great
Britain did ba the third year it would
suffice to raise by taxation $1,250,000,
000. If, in order to be absolutely on
the safe side, rt seemed advisable to
increase the sum f<* $1,500,000.000, this
should, in our .inion, be the maxi
In considering the apportionment o?
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 imposed as far
as possible upon commodities in the
hands of the final consumer rather
than upon the articles, which serve pri
marily as raw material for further
(4) Taxes upon business should he
imposed as far as possible upon net
earnings rather than upon gross re
ceipts or capital 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 rate upon the larger
incomes. It is essential, however, not
to make the income rate so excessive
ns to lead to evasion, administrative
difficulties, or to the more fundamental
objections which have boen urged
(G) The excess profits which are due
to the war constitute the most obvious
and reasonable source of revcuue dur
ing war times. But the principle upon
which these war-profit 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 rafe of GO
per cent. This is a sum unheard of in
the history of civilized society. It must
be remembered that it was only after
tho 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 42-?.
It could e.'ts?y be shown that a tax
with rates on moderate incomes sui)
stantially less thau in Great Britain,
ind on the larger incomes about as
high, would yield only slightly less than
.he $032.000.000 originally estimated in
he House bill.
It is to be h"!>ed that the Senate will
reduce the total rate on the highest in
.omos to 34 per cent, or at most to 40
.cr cent, and that at the sanie time il
will reduce the rate on the smaller in
.omes derived from personal or profes
If the war continues wa shall have to
'coend more and more upon the in
tn imposing retroactive taxes.
(2) It selects an unjust and unwork
.ible criterion for the excess-profits tax
(3) Jt proceeds to an unheard-of
leight in the income tax.
(4) It imposes unwarranted burdens
upon the consumption of the commu
(;") It is calculated to throw business
into confusion by levying taxes on gross
receipts instead of upon commodities.
(Gi It fails to make a proper use ot
(7) It follows an unscientific system
n its fiat rate on imports.
(5) It includes a multiplicity of pet
ty and unlucrative 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 be modified are sum
med up herewith:
(1? The amount of now taxation
should be limited to $1.2.")0,000.000-or
at the outset to Sl.i300.000.000. 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
i sound system ought to yield about
(3) The income-tax schedule ought to
be revised with a lowering of the rates
on earned incomes below :?10,0G?, and
with an analogous lowering of the
rates on the higher incomes, so as not
to exceed 3-1 per cont. A careful cal
culation shows that an income tax of
this kind would yield some $150.000,
(4) The tax on whisky and tobacco
ought to remain approximately as it is.
with a yield of about S230.000.000.
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
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
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 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
must be more and more heavily drawn
upon as the war proceeds.
EASY MATTER TO BRIGHTEN UP
A NORTH ROOM.
Home Art Specialist Suggests Use of
Yellow as Probably the Best
Have the Curtains of Some
Have you a bugbear of a north room
that always eludes your attempts to
make it livable? Now that winter ls
here. It might be just the place for the
children to use ns a playroom, or tbe
older ones for quiet study and read
"The problem facing one who fur
nishes a north roora is that of making
tt light, bright and warm," comment
ed Miss Araminta Holman, Instructor
In home art In the Kansas State Agri
cultural college. "Since this room
lacks sunshine, yellow is the best color
to use. Yellow will cheer and bright
en it, and yellow which has a little
red to warm lt will be better than a
'cold' color. Orange is the warmest
color. Erowns are tones of orange
and better to use than gray, black or
blue. One should use browns that
have more yellow than red.
"If the room is a 'den,' the furni
ture may be walnut or oak, but if it Is
a bedroom, bird's-eye maple or cherry
may be used. The curtains should be
light, in tones of yellow or orange.
The material should be thin and trans
parent to admit all the light possible.
"Backgrounds should be yellow or
orange-warm colors. The woods used
should be in harmony with the other
furnishings of the room. Dark tones
express formality, dignity, repose and
seriousness. Light tones express gay
ety, youth and informality."
One and a half cupfuls of rice that
bas been thoroughly washed, ODe
pound of fresh pork, one pound of
sausage, one slice of ham, half a seed
ed red pepper, one large tomato, one
sweet pepper, one large onion, one
clove of garlic, three sprigs of parsley,
one sprig of thyme, two ground cloves,
one crushed bay leaf, one tablespoon
ful of butter. Cut pork and hara In
very small pieces; the sausage In
rather large slices. Mince all of the
other ingredients. Carefully brown
the onion and the pork In butter.
When light brown add the hara and
the other seasoning and brown togeth
er for five minutes. Then add the
sausage and cook five minutes longer,
stirring constantly. Add three quarts
of hot water or elonr ?n?? -?
Potatoes Stuffed With Meat
Take a number of large potatoes,
wash and scrub them thoroughly and
bake In a very hot oven. As soon as
they are tender cut the top from each
and scoop a hole In the center. Previ
ous to this take the remains of cold
cooked beef, mince finely, season to
taste, moisten with gravy and heat.
Place a spoonful of meat in each po
tato. Replace the tops of the pota
toes and bake until a brown color.
The scooped-out potato may be either(
mashed smoothly with butter and milk
or made into rolls by mashing the po
tato and adding a little butter, salt
and flour. Mix to a paste with a well
beaten egg, form into rolls and bake
In the oven.
One cupful of sweet milk, one egg,
pinch of salt, one-half cupful sugar,
one-half cupful molasses, one level
spoonful soda (dissolved), two round
ed cupfuls of graham flour, one cupful
of currants or raisins floured. Mix in
order given, steam three hours. Eat
hot with lemon or vinegar sauce.
Lemon Sauce-One tablespoonful
cornstarch, mixed with two tablespoon
fuls of water; stir into one cupful of
bolling water, boil till clear, add one
cupful of water, one egg, grated rind
and juice of one lemon. Beat together,
stir rapidly and remove from stove as
soon as lt begins to simmer.
This ls an old-fashioned recipe:
Cut the pumpkin into large pieces,
keeping the skin on, and put lt on to
boll. When soft, scoop out the pulp,
sift lt and for every heaping teacup
ful of pumpkin add one pint of rich
milk, two eggs, one and one-half cup
fuls of sugar, one-half tablespoonful
of ginger and the same of salt. Make
a good, ??hort pastry, fill with the mix
ture and just before putting Into the
oven put a few small pieces of butter
over the top and grate over them a lit
Use any kind of sauce, apple, berry
or pear, etc. Make very sweet. Mix
one cupful of flour, one saltspoonful of
?tit, one teaspoonful of cream of tar
tar, with water (never milk) enough
for stiff batter. Drop In sauce, cover
tightly and boil 15 or 20 minutes.
Often In a country bungalow or up
In the attic loft we desire to put up
curtains, but do not care to spend
any extra money for curtain rods.
Strings will sag after a time, but an
excellent substitute for a rod is a
wire stretched tight.
writes more Life Insul
any company in Amei
one. They have lowest
dividends and free disab
of all companies in ti
E. J. NORRIS
FARM WORK AND MACHINERY
Eloquent Salesmen Often Fall Into Ex
aggerations and Make Farm
ing Appear as Joke.
Much mischief has resulted to farm
ing as an occupation from tho exploita
tion ot the Idea that machinery will do
the whole job and that future agricul
ture will be a matter of pressing but
tons and setting wheels in motion. The
eloquent men who make and sell ma
chines often fall into exaggerations
that are hurtful and that finally get in
to cartoons which depict farming as a
more joy ride. It is silly and futile, of
course, and it should mislead no one.
j The trouble is that too much of it is
believed and the thing soaks into the
j general consciousness.
Good farming is work, hard work T*
..bcu me nineteenth verse of the
third chapter of Genesis: "In the
sweat of thy face shalt thou eat bread."
YIELDS OF SWEET POTATOES
Loss of About Eleven Bushels Per
Acre in 1916 on Considerably
Sweet potatoes, on a considerably
Increased acreage this year, show a
yield of 91.9 bushels, which is about
ll bushels 'below last year and about
one bushel below the average. How
ever, because of Increased acreage, the
total production of 67,063,000 bushels
is, with the exception of last year's
crop of 74,295,000 bushels, the largest
ever produced in this country, and
much above the average of 51,117,000
The crop in New Jersey Is 2,300,000
bushels, compared with 3,565,000 bush
els produced in 1915. In Virginia the
outturn Is 5,070,000 bushels compared
with 3,740,000 last year.
The crop is strikingly better also In
North Carolina, and does not vary
greatly from last year in the remain
ing states. In quality, sweet potatoes
are reported at 87.7, much below the
fine quality of 92.2 reported last year
and slightly below the average of S8.5.
-United States Department of Agri- j
Light Saw, Lathe and Shin
gle Mills, Engines. Boilers,
Supplies and Repairs, Porta
ble, Steam and Gasoline En
gines, Saw Teeth, Files. Belts
and Pipes, WOOD SAWS
and SPLITTERS. *
GINS and PRESS REPAIRS
DIV King's Hew Discovery
"CIL!S THE CO'IRH. OMPCr TWp '.'JNRP
Bucklen's Arnica Salve ;
The Best Salve In The World. I
The Hartford Fire
is one hundred and seven (107)
years old. Writes more Fire In
surance than any fire insurance
company in America.
You will be perfectly safe with
a Hartford Fire Policy.
E. J. NORRIS, Agt.
Large stock of Drugs and Drug Sundries always
on hand-fresh from the leading manufacturers.
Prescribions ar.mir>o*oixT --Bfj from
Have you purchased a pair of
the celebrated Crossett Oxfords
yet? If not, come in and see our
new spring stock in all of the pop
ular leathers and lasts. We also
sell the Selz-Sch wab shoes. Nothing
better for the money.
DORN & MIMS