War Taxation Some Comments and Letters(txt+pdf+epub+mobi电子书下载)

作者：Kahn, Otto Hermann

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War Taxation

The recent publication of a little pamphlet entitled "Some Comments on War Taxation" elicited numerous interesting comments by the readers. The points to which these comments mainly related were the statements contained in the pamphlet that:

First. If our neighbor Canada continues her present policy of not taxing incomes, or if she imposes only a moderate tax while rates of income taxation in America are fixed at oppressively and unnecessarily high rates, there can be little question that the ultimate result will be an outflow of capital to Canada, and that men of enterprise will seek that country.

Second. Moneyed men not having their capital engaged in active business, if they are so constituted that their consciences permit them to evade their share of monetary sacrifice, can put their funds into tax-exempt securities.

In reference to the foregoing points, I have written two letters in answer to correspondents. These letters contain an elaboration of certain arguments and viewpoints set forth in the original article on War Taxation and also refer to some additional phases of the subject. Those who have done me the honor of perusing that article may possibly be interested in reading these letters.

In order that they may be presented as a part of the argument as a whole, the original article with a few additions and slight revisions is printed in the first part of this pamphlet, followed by the letters.O. H. K.52 William Street,New York, July 5, 1917.SOME COMMENTS ONWAR TAXATION

This is a reprint, somewhat amplified, of an article printed recently in the New York Times. The original article was written before the recommendations of the Ways and Means Committee of the House of Representatives were reported.

In a time of patriotic exaltation and of universal obligation and readiness to make great sacrifices to bring a most just and righteous war to a successful conclusion, the voice of sober argument and matter of fact considerations is apt to grate upon the ears of the people.

That voice is all the less likely to be popular when the arguments it puts forth may easily lend themselves to the interpretation of being actuated by solicitous care for selfish interests.

I am fully aware that by publishing the following observations I am exposing myself to that interpretation and to criticism of, and attack upon, my motives.

Yet, seeing that certain measures now under consideration threaten to take shape in a way which, from my practical business experience and after mature deliberation, I am bound to regard as faulty and as indeed harmful to the country, I believe it to be right and proper to contribute my views to the public discussion of the subject, for whatever they may be worth.

I can only hope, then, that in what I am going to say I shall be given credit for endeavoring to speak conscientiously and to the best of my knowledge and judgment from the point of view of the welfare of the entire country and not of the welfare merely of the well-to-do.

I shall address myself to the practical aspect and to a few phases only of the question and shall not attempt to enter into the economic theories and the broader and deeper considerations involved.

I shall assume in my argument that what Congress is seeking to accomplish is to impose taxes justly, effectively and scientifically with the desire to disturb the country's trade and commerce as little as possible and to avoid as much as may be the evils of financial dislocation.

I shall take it for granted that at a time when more than ever the unity of the country should be emphasized, sectional selfishness will find no place in the taxation program, and that, should it be attempted nevertheless, the congressional delegations of the States which would be unjustly affected, would resist, regardless of party affiliations, harmful discrimination against their constituents and their States.

I shall assume that it is not the purpose and intent of Congress, under the guise of the necessities of the war situation, to embrace the doctrines of Socialism.

Our present economic system, our present method of wealth distribution may or may not stand in need of change; the fact remains that Congress has no mandate to effect a fundamental change.

The consequence of such a change would be so immensely far-reaching that no government has the right to sanction steps to bring it about until the subject has been fully discussed before the people in all its bearings and the people have pronounced judgment through a Presidential or other election.

I will first state what in my opinion ought not to be done:I

I take it that not many words need be used to expose the fallacy of the argument, heard even in the Halls of Congress: "If men are to be conscripted, wealth also must be conscripted."

Men will be conscripted to the extent that it is wise and just and needful. So, and no other, should wealth and the country's resources in general be conscripted.

And, are not the children of the well-to-do conscripted equally with the children of the poor?

Indeed, the proportion of the sons of the well-to-do on the actual fighting line is bound to be a predominating one, because vast numbers of wage workers in the industries and on the farms will necessarily have to be retained at their accustomed vocations in order to maintain the output of our factories and farms.

Have the children of the well-to-do been backward in volunteering? Were they not, on the contrary, amongst the very first to offer to serve and to fight?II

There appears to prevail amongst not a few people the strange delusion that America's entrance into the war was fomented by moneyed men, in part, at least, from the motive and for the purpose of gain.

Were there any such men, no public condemnation of them could be too severe, no punishment would be adequate. I am absolutely certain that no such hideous and dastardly calculation found lodgment in the brain of any American, rich or poor.

Moreover, is it not perfectly manifest that any rich man in his senses must have known that his selfish interest was best promoted by the continuance of the conditions of the last three years in which America furnished funds and supplies to Europe at huge profits, whilst our entering the war was bound to diminish those profits very largely (indeed, to entirely eliminate some of them), to interfere with business activity in many lines and to compel the imposition of heavy taxes on wealth?

It is to the credit of our rich men that, though fully realizing the extent of the monetary loss and sacrifices which war between this country and Germany must necessarily bring to them, there were but very few of them who supported the Peace-at-any-Price Party or favored the avoidance of America entering into the war when it had become plain that our participation in that war could not be avoided with honor and with due regard for our duty to our own country, or to the cause of right and liberty throughout the world.

Yet, somehow, the pacifists seem to have singled out the rich as mainly responsible for the war.

It may be due, consciously or unconsciously, to a resulting feeling of resentment that the proposal to confiscate during the war all incomes beyond a certain figure is actively promoted by leading pacifists—a proposal based upon ignorance of, or disregard for, the laws of economics, teachings of history and practical considerations.

If any such scheme were to be adopted, the consequences to the country at large would be far more serious than to the victims of the proposed action.

If such a measure of outright confiscation were seriously apprehended, at a time moreover and under conditions which are far as yet from calling for extreme measures, capital would cease to flow in its accustomed currents and some of it would seek other channels legitimately open to it.

It would certainly cease flowing into constructive use and would instead confine itself, to an extent at least, to municipal, state and federal tax-exempt securities. Enterprise would be seriously hampered and in some respects brought to a standstill entirely.

Many thousands of workmen would be thrown out of employment. Many businesses and shops would close.

There would ensue, as a natural consequence and without any conscious determination, a nation-wide strike of constructive activity and enterprise in commerce and finance, because men will not look upon it as a "square deal" if they are to take all the risk and responsibility, all the hard work and ceaseless strain and care of business effort, whilst the Government would needlessly take from them an unduly large share of the fruit of their labor, let alone all of it except an arbitrarily fixed sum.

I say "needlessly" because, were it really needed, business men would willingly sacrifice their entire income for the country's cause.

They would work for patriotism, without any recompense whatever, just as hard and harder than they do for gain or for ambition, if the occasion required it.

But, of course, everyone knows that nothing remotely approaching such drastic taxation is required in this country at this time.

It is absolutely right to proclaim and to enforce by legislation that no man, as far as it is possible to prevent it, shall make money out of a war in which his country is engaged, but there is all the difference in the world between that just and moral doctrine and between the doctrine that no man shall be permitted to have more than an arbitrarily fixed income during a war.

If $100,000 or any fixed sum is the limit of what may be permissible income during war time, why not by and by a lesser sum?

If the principle is once admitted, where will its application stop, even in time of peace?

Why is not the proposed plan, or anything in the nature of that plan, simply license for the materially unsuccessful to despoil the materially successful?

History shows more than one instance where this road inevitably leads to when once entered upon.

And who are our successful men? The vast majority of them are self-made men who started at the bottom of the ladder.

It is trite to say that inequality of endowment and therefore inequality of results in human beings, as well as in inanimate things, is a law of nature. The capacity for creating, organizing, leading, etc., in short, the possession of those qualities of brain and disposition which beget success, is rare.

It is in the interest of the community, whilst carefully guarding and fostering the rights, the opportunities and the well-being of all of its members, to give liberal incentives to men possessing those gifts to put them to active and intensive use. It is hardly open to doubt that, generally speaking, the work of able men, engaged in serious and legitimate business (I am not speaking of gamblers and parasites), whilst naturally benefiting them, benefits the community a great deal more.

The income of hospitals, orphan asylums, institutions of learning and of art and many other altruistic enterprises depends largely upon the voluntary taxation, aggregating a great many millions annually, to which those men in America who have attained financial success have always willingly submitted themselves—more so, probably than in any other country.

Who is to take care of all of those institutions if extreme taxation compels the rich to cease their contributions?III

The arguments above set forth apply likewise, though naturally not quite in the same degree, to the proposal of levying an income tax rising to an excessively high level, as, for instance, the suggested tax of fifty per cent. on incomes over $500,000.

There, again, the test should be whether so radical a tax is wise and required by the necessities of the country.

The nations in Europe have been fighting for nearly three years and have been under an infinitely greater financial strain than our country is or will be, yet none of these nations have resorted to extreme taxation of income.

Even in Great Britain, whose financial burden is the heaviest of all, whose debt is many times the total of ours and who has loaned about $5,000,000,000 to her Allies, the highest income tax rate, the maximum percentage in the graduated scale of taxation, is to-day no more than approximately forty per cent.

In the last budget, introduced a couple of weeks ago, the British Chancellor of the Exchequer declined, so I am informed, to consider an increase in the income tax rate, because of the damaging effect which such increase would be apt to have on the country's business and prosperity.

In France and Germany the burden laid on incomes is much lower than in England. In Canada where war loans have been raised equivalent on the basis of comparative population to what would be more than $10,000,000,000 for America, no Federal Income Tax exists at all.

I doubt whether this latter fact is generally known in this country and whether its significance is receiving the measure of serious consideration which it deserves.

I understand that it is the deliberate policy of the Dominion Government to endeavor to avoid resort to an income tax in order to attract capital to Canada.

There can be little question that if our income taxation is fixed at unduly and unnecessarily high rates, whilst Canada has no or only a very moderate income tax, men of enterprise will seek that country and there will be a large outflow to it of capital in course of time—a development which cannot be without effect upon our own prosperity, resources and economic power.

The financial dislocation, the discouragement and the apprehension caused by unduly heavy taxation of incomes will not only act as a drag on enterprise and constructive activity, but will make it exceedingly difficult, if not impossible, for corporations to sell securities in sufficient volume and thus to obtain adequate funds to conduct their business—especially also as investors will be fearful that high rates of taxation once established will not easily be reduced to normal levels, even when the present emergency is passed.

Extravagance, log-rolling, the unwise and inefficient expenditure of money by governmental bodies are amongst the besetting sins of democracy. The formula once found, the machinery once employed for the raising of huge revenues, are apt to make the way of wasteful governmental spending all too temptingly easy.

It must not be forgotten that taxation must necessarily by that much diminish the surplus income fund of the individual and that both theoretically and actually the spending of money by the government cannot and does not have the same effect upon the country's prosperity and enterprise as productive use of his surplus funds by the individual.

The sentimental, and thereby the actual, effect of extreme taxation will not be confined to the relatively small number of people in possession of very large incomes. The disturbance and fear caused by the contemplation of an excessively high ratio of taxation, even when applied to a relatively few, is bound to spread to those also of more moderate incomes.

Capital is proverbially timid. It will not take risks, except in the expectation of commensurate reward, and if it sees the danger of its reward being unduly infringed upon by excessively rigorous income taxation, it will anticipate that menace by withdrawing from the field of constructive investment to the greatest extent possible.

So much is this the case that I incline to the belief that taxation so graded as to result in a maximum average of say 33-1/3 per cent. would produce at least as great a revenue as a maximum average of 50 per cent.

It is one of the oldest principles of taxation that an excessive impost destroys its own productivity.

The flood of securities which would be coming for sale in order to escape extreme income taxation would create a grave condition of demoralization in the investment markets of the country, with the resulting inevitable effect upon the country's general business, and upon its capacity to absorb Government loans.IV

The tax recently enacted by Congress imposing a burden of 8 per cent. on business profits over and above 8 per cent. on the capital employed, regardless of whether such profits have any relation to war conditions or not, is unscientific and unsound.

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