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WEDNESDAY. JUNE . 117.
THE HAWTF0RD HERALD Page 7 L jr-' : si -f HOW SHALL WE - PAY FOR THE WAR? A Constructive GriUGistn on tfis Housi RQvanue Bill. LOANS BETTER THAN TAXES Flv Reasons Why Exca.tlvs Taxot at th Outsit of Wcr Are DUadvantagt. out Qraat Critain Example Worthy of Emulation How the Taxoe 8hould Be Apportioned. By EDWIN R. A. 8ELIQMAN, McVlckar Professor of Political Econ omy, Columbia Uulverxlty. ' On May 23, 1017, the House of Rep resentatives passed nn uct "to provide revenue to dcfiay war expenses niul for other purposes." In thu original bill as presented by the Committee of Ways and Means, the additional reve nue to be derived was estimated at f 1, 810,420,000. TLe amendment to tho In come tax, which won tacked on to Uio blll di;r!r the discussion in the" House, was expected to yield another $40,000. 000 or GO,00O,O00. In discussing the House bill, two problems arise: I. How much should bo raised by taxation? ' II. In what manner, should tills sum be raised? I. How Much Should Be Rsleert hv Tnxationf" How wus the figure of $1,800,000,000 arrived at? The answer I simple. When the Secretary of the Treasury came to fcstlmate the addltionnf war expenses -' for tho year 1017-18, bo calculate.l that they would amount to Rome -frt.OOO.-000,000, of which ?3,000,000.000 was to bo allotted to the allies, and $3,000, 000.000 was to he utilized for the do mestic purposes. TblukliiK that if would be a fair proposition to divide Ibis latter sum between loans and taxes, ho concluded that tho amount to bo raised by tnxes was $1,800,000, 000. . Thero are two extreme theories, each of'whlch may bo dismissed with scant courtesy?" The one is that all war ex penditures should bo defrayed by loans, and tho other Is that nil war expendi tures should bo defrayed by taxes. Each theory Is untenable. It Is Indeed true that the burdens of tho war should bo borne by the pres ent rather than tho future generation; but this does not mean that they should bo borne by thi3 year's taxation. Meeting all war expenses by taxutiou makes the taxpayers In ono or two years bear tho burden of benefits that ought to lo distributed at least over n decade within the samo generation. In the second place, when expendi tures approach the gigantic sums of preseut-duy warfare, the tax-only pol icy would reiitiire more than the total surplus of social Income. Wero this absolutely necessary, tho ensuing hav oc In the economic life of tho communi ty would have to bo endured. But where the disasters aro so great and 4ut tho same time so unnecessary, the ' fax-only policy may be declared Im practicable. Secretary McAdoo had tho right in stinct and highly commendable cour ago in deciding that a substantial por- Lftion, at least, of the revenues should ie uitivuu iruui luxuuuii. jiui wura ho lilt upon the plan of R0-50 per cent, that Is, of raising one-half of all do mestic war expenditure, by taxes, tho question arises whether ho did not go too far. The relative proportion of loans to taxes Is after all a purely business proposition. Not to rely to a largo ex tent on loan at tho outset of a war Is a mistake. Disadvantage of E.cauive Taxea. " Tho 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 ou industry will dfcarrange business, damp enthusiasm and restrict the spirit of enterprise at the very time when the opposite ta needed. 3. Excessive taxea on Income will de plete the surplus available for Invest ments and Interfere with the placing of the enormous loans which wilt be neces sary In any event ' .. Excessive taxea on -'wealth will causo a serious diminution of the in comes which are at prcsant largoly drawn upon for tba support of educa tional and philanthropic enterprises. Moreover, these sources of support would be dr.'ed up precisely at tho time when the need would bo greatest 8. Exeseeive 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 PolJjy. Take Great Britain as an cxuupl?. During the first year of the war s'j. increased tuxes only slightly, In order to keep Industries going at top notch. During tho second year she raised by new taxea only 0 per cent, of her wur expenditures. During the third year fe levied by additional taxes (over ' auu above tho pro-war letel) only slightly more than 17 per cent, of her war expeuses. If wo should attempt to do us much Ih tho first year of the war as Great Ufltaln did In tho third year it would biitflco to raleu by taxation 1,250,000.- 000. If, In order to be absolutely on the tiafe nhle. It seemed ndvlsabki to Jucreii'O the suiii to $l,C00,O00.OO0.' thin n!iouUl, In our opinion, bo the maxl WOTJ. in considering the apportionment et the extraordinary burden of taxea la war times certain scientific principles are definitely established: How Taxea Ghould Be Apportioned. (1) Tho burden of taxes must be spread as far an possible over tho whole community so as to cause each Individual in share In tho sacrifices ac cording to bis ability to pay and ac cording to his Miare In tho Government (2) Taxes ou consumption, which are necessarily borne by tho community at large, should be Imposed as far a pos sible on articles of quad-luxury rather than on those of necessity. (3) Excises should bo 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 production. (4) Taxes Hipon business should be Imposed as far as possible upon net earntngs rather thnu upon gross re ceipts or capital Invested. (5) Taxes upon Income whlcbTvlll necessarily be severe should bo .both differentiated and graduated. That Is, there should be a distinction between canted and unearned Incomes and thero should bo n higher rate upon the larger incomes. It is csseutlal, however, not to make tho incomo rato so excessive r.s to lead to evasion, administrative ('.I.Tlcultlcs, or; to tho more fundamental objections which have been urged above. (U) The excess profits which arc due 0) tho war constitute the most obvious and reasonable source of revenue dur ing war times. But tho prlnclpb upon which these war-profit taxes are laid must be equitable In theory and easily calculable, hi practice. The Proposed Income Tax. Theitddltloual Income tax jib passed by the House runs up to n rate of GO per cent. Tills Is a sum unheard of hi tho 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 31 per cent., nnd that even now In tho fourth year of the war tho lucome tax does not exceed 42Mt per cent. ' It could easily be shown that a tax with rates on moderate Incomes sub stantially less than in Great Brltahv nnd on the larger Incomes about as high, would yield only slightly less than tho $532,000,000 originally estimated in the House bill. It is to bo hoped that the Senate will reduce tho total rate on the highest In comes to 31 per cent, or at most to 40 per cent, aud that at the same tlmo It will reduce the rate ou the smaller in comes derived from personal or profes sional earnings. If the war continues we shall have to dopond moro and more upon the In como tax. By. Imposing excessive ratos now wo are not only ondangering the future, but arc Inviting all 'manner of difficulties which oven Great Britain has been able to escape. Conclusion. The House bill contains other funda mental defects which may bo summed up as follows : (1) It pursues an erroneous principle In Imposing retroactive taxes. (2) It selects an unjust uud unwork able ci Morion for tho excess-profits tax. (3) It 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 throw business into confusion by levying tnxes on gross receipts Instead of upon commodities. . (0) It fulls to make n proper use of stamp taxes. ' (7) It follows an unscientific system in Its flat rate on imports. (S) It includes n multiplicity of pet ty and uulucrntlve taxes, tho vexatious ness of which la out of all proportion to the revenue they produce. The fundamental lines on which tbo Houso bill should bo modified are sum med up herewith: (1) Tho amount of new taxation should be limited to $L250,000,000-or at the. outset to 51.500,000,000. To do more than this would be as unwise as It la unnecessary. To do even this would bo 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 cystem ought to yield about woo.ooo.ooa (3) The Income-tax ccbedul j ought to be revised with a lowering of the rates on earned incomes "below $10,000, and with an analogous lowering of . the rates on tl.: higher incomes, so as not' to exceed 34 per cent. A careful cal culation ribowa that an Income tax of this. kind would yield some $450,000, 000 additional (4) Tho lux on whisky and tobacco cu'ut to remain approximately as It is. with a yield of about $230,000,000. . These three taxes, together with the stamp tax ji. even the low rato of (he Houso bill, and with an Improved au tomobile tax, will yield over $1,250, 000,000, which Is tho amount of. money thought desirable. Tho above program would be in har mony with an approved scientific sys tem. It will do away with almost ull of tbo complaints tliut arc being urged against, tho present. It will refrain from taxing tho consumption vt tho poo:, It will throw a far heavier burden upoa tbo tlcb, but will not go to the extremes of confiscation, it will ob viato interference with business and will keep unimpaired tho social pro ductivity of tbo community. It jvlll establish a Just balunco be tween loans and taxes and will not succumb to tho danger of approaching either the tax-ouly policy or tho loan only' policy. Aboyo all. It wUIfceep nn -undisturbed elastic margin;"whlck must be more and mere heavily drawn jiuoiuiB tho war proceeds. - JUMPS THROUGH WINDOW: RESULT OF BAD DREAM Guy Henning. who lives" on East Powell street, a shot flrcr at the Peo ples mine, had a hard fall as the re sult of n vivid drenm ho had about midnight. Mr. Henning dreamed that ho had Jit a fuse, but was unable to make his escape, because his light went out As a result of the imaginary ex plosion, Henning jumped from bed, sprang through-lt-glnss of a nearby window and fell to the porch below. He sustained no injury from his fall. Henderson Gleaner. buii'i Have Catarrh One 'efficient way to remove nasal catarrh k to treat its cause which in most cases is physical weakness. The system needs more oil and easily digested liquid-food, and you should take a spoonful of scorn EMULSION after each meal to enrich your blood and, help heal the sensi tive membranes with its pure oil-food properties. The results of this Scoff' Emulsion treatment will ' surprise those who have used irritating snuffs and vapors. GettheGenuine SCOTT'S Let Us Show You the Columbus WE are offering you the Columbus wagon because there is no better to offer you. If you know wagons at all you know this is true. The Columbus we can show youJtoday is the same high grade wagon, as always, with every new improvement. The works where Columbus wagons are made were established over seventy years ago. Ever since they have been turning out the very highest grade wagon made. There has never been a time when the men who built Columbus wagons the men in the factories have not had pride in their work. Consult your own knowledge of what'Columbus wagons have been doing for farmers these many years. Then come in and look the Columbus over as thoroughly as you please. Come in and study the fifth wheel, the folding end gate and link end rod a, the strength of gears, wheels and box, and all the details. Fordsville Planing Mill Co., - Fordsville, Ky, (Incorporated) JAKE WILSON, Mgr. tOOOOOOOOOOO(XXX00000(XOOOOOOOOOCXXXXXOOGO cooooooooo Straw Hats HUB CLOTHING CO. HARTFORD. KY. OOOOOOtXXKiOOOO vvvvvvxOCWw-Vr4V.XrVXXXO0O0OOOOO000 Hartford Herald and . Cincinnati Enquirer Ajcoant of tho Enquirer's advance in price, ooooooooooooodo O COURT DIRECTORY. O oooooooooooooon CIRCUIT COURT. Judge R. V. Slack, Owensboro. Attorney C. E. Smith, Hartford. Clerk A, C. Porter, Hartford. Muster Commissioner Otto C. Mar tin, Hartford. Trustee, Jury" Fund Cal P. Kcown, unrtiord. 1st Monday In March 12 days Com'th. and Civil. 1st Monday In May 12 days CIvli let Monday in. July 12 days Com'th. and Civil. 3d Monday In September 12 days U1V1I. 4th Monday In November 12 days Com'th. and Civil. .COUNTY COURT. Meets firs't Monday In each month. Judge John 11. Wilson Attorney A. D. Kirk Clerk W. C. IJlankenshfp Sheriff S, O. Kcown Superintendent Ozna Shults Jailer W. P. Mldklff Assessor C. C. HIncs Surveyor C. S. Moxlcy Coroner Dr. A. B. Riley FISCAIj COURT. Meets Tuesday after first Monday In January, April and October. 1st Magisterial District Ed Shown, Hartford, Routo 7 2d Magisterial District Winson Smith, Select 3d Magisterial District W. S. Dean, Dundee 4th Magisterial District S. W. Leach, Beaver Dam, Route 3 3th Magisterial District S. L.- Ful- kerson, Rockport flth Magisterial District R. C. Tich- enor, Centertown 7th Magisterial District B. F. Rice. Fordsvllle. 8th Magisterial District Ben W. Tavlor. Hnrtford. Routo 7 FArtkR'& HAIR BALSAM A tatltt preparation of merit. Celpe to eradleate dandruff. ForRattarin Color and Beauty to Cray or Faded Hair. Sanrtliooatprnpgljlfc NOW The Year afiiLl i i yaTawawe.r 'ill rlhrllia tftfo (b(?aOia gftaFftg ftOo g)QGTj Over-work, worry and the constant strain of a business life are. often a cause of much trouble. Dr. Miles' Nervine is highly recommended for all Nervous disor ders. It is particularly invaluable to business women. Regulate your bowels by using DR. MILES' LIVER PILLS IF FIRST BOTTLE, OR BOX, FAILS TO BENEFIT YOU, YOUR MONEY WILL BE REFUNDED. R.. C. Ha-rdwick MANUFACTURING OPTOMETRIST ANU JEWELER Our Optical Department Is the most complete and best equipped In the State nf I"ntnel?v. We actually grind our own Glasses here In our shop from the rough glass. No sending away. You can look before you buy, but don't buy before you look We can examine your eyes and grind the Glasses the same day. No dangerous drops used In our method of examining the eyo?. We use the most modern, most sclentllic method used in our profession. BEWARE OF THE SPECTACLE PEDDLER who travels, from town to town or the fellow who offers to sell you $.".00 Glasses for ?1.00. He who claims to sell $."..00 Glasses for $1.00 Is cither a fool pr a fakir. DON'T HE DECEIVED. Como in and see our Specialists. If you do not need Glasses he will frankly tell you so. See our New Deep Curve Lenses. If you are wearing the old flat lenses we can duplicate them Into this new louse at a very little cost. Do you need ifcw frames, new nose pice? Broken Lenses can bo duplicated here In a few hours, often while you watt. Come In and let us bliow jou "HOW GOOD GLASSES ARE-MADE." Seeing Is believing. Watch nnd Jewelry Repairing of the very highest order. Special Jewelry and Monogram work given Particular Attention. The Best Equipped Optical Plants In Western Kentucky. We do all our own work in this line and guarantee a PERFECT FIT. A valuable Watch should be Intrusted only to those who, by ex perience and a definite, practical knowledge, are competent, and know how to intelligently Repair it. Our skilled workmen know. R. C. HARDWICK We Challenge Anybody's Prices on Anything in Our Line. Two Stores: 120 E. Main St., Owensboro, Ky. .".".0 Main St., Hopkinsville, Ky. BARGAIN OFFER The Hartford Herald and Weekly Commercial - Appeal Both 1 Yr. for $1.25 Tho HARTFORD HERALD has made a special clubbing rate with Mie Memphis Weekly Commercial Apeal, of Memphis, Tenn., by which we will furnish both papers for the sum of .-fliUo per year regular subscription price, $1.50. The Commercial Appeal Is one of the largest and best papers In tho South, and we hope to receive many lew subscriptions on this offer; J1.25 cash for "both papers. This ap plies to renewals as well as new subscriptions. WVVWWWW WVWVWV 0 You Can Save 10 to 20 per cent by Figuring with Us on MONUMENTS and GRAVE STONES Best Work Lowest Prices. Central City Marble and Granite Works, CURD & YORK, Proprietors, Central Cily.'Ky. yVVAVVV OOOCOOOOOOOOOOOOOOOOOOOOOO Willard Hotel Louisville. Ky. Jefferson and Center Streets. Right in the Heart of Things. European Plan RATES 75c and $1.00 Without Bath. 51.50 with Batb. iCKXXXXXXKXXXXXOOOOOOOCXOOOOOOOOOQOCOOOOCMXXXXXatr NERVOUS ATTACKS. "I suffered with nervous at tacks nnd headaches. Then my liver Kot out of order and It pecmed ns though my whole system was upset. I com menced UFlne Dr. Miles' Nerv ine nnd also took Dr. Miles' I-lver nils nnd now I feci per fectly well in every vy. My bowels also are In good shape now." MKS. AUGUSTA KEISER, 1H9 Portland Ave., Rochester, N. Y. VVVVV' OOOOOOOOOOOOOOOOOOOOOOOOO