FOR EQUALITY OF FINANCIAL SACRIFICE
For Equality of Financial Sacrifice Benjamin G Marsh, of Farmers' National Committee, Calls Upon Public To Back Up President's Idea of Taxing Profiteers "B ILLIONAREISM is almost as great s...
...Of course, this is not the taxable income, but he is to have $50,000 after he has paid what he owes and paid his taxes...
...Suppose a man having an industry should earn, after paying all of his obligations, $1,000,000...
...If you want to make it $100...
...As you know, the Government is now exercising supervision over all sorts of industry through the War Finance Corporation, and I think that this taking of these excess incomes will enable the Government, in large measure, to exercise control over investments in unwise and nonessential industries during the war...
...Would Make $100,000 Minimum MR...
...If he can not put $600,-000 of his own earnings into an expansion of his business he must borrow it from Bomebody else...
...Mr...
...I think you gentlemen will agree with what I am going to suggest today, because I think I know what is in your minds, and what I am going to say I can substantiate with some statistics...
...This is not an ordinary war, it seems to me, and I think we ought to establish a principle of equality of financial sacrifice, and if necessary raise the expenditures by taxation up to 96 per cent or 50 per cent, or 60 per cent, as the necessity might arise...
...Out of 27,304,000 families 7,288,000 had an income of under $850...
...Why in thunder should he not do it...
...I do not say we would yield to It, but « revenue bill may help answer the prayer 'Lead us not into temptation.' "No greater encouragmect and joy could be afforded the soldiers and sailors and men in other branches of the service than to have the Congress at this time let them know that the war is not to deprive them, when they return from the, war and their families, of a better chance in this country...
...220,000,000 in amounts of $100,000 to $250,000 —a total of $1,178,000,000...
...Mr...
...F-om these two sources, therefore, approximately $8,000,000,000 can be obtained, since excess profits are much larger this year than in 1916...
...We have got to supply him with equipment...
...That was criticized and I received a letter from him in which he says that certainly for 1917 it will be $60,000,000,000 or will be between $60,000,000,000 and $63,000,000,000...
...Marsh in his statement before the Committee presented some interesting data with respect to the amount of money which could be raised by taxation of war profits and swollen incomes...
...Mr...
...That is all right and that is a very clear answer...
...But you are getting away from the question which I am putting to you, which is a plain one: What shall wa de with everything a man earns over $50,000, having due regard to the fact that what he does earn over $50,000 is employed in an industry which helps in keeping the war going...
...First Liberty Loan...
...Garner...
...I think that such a measure— "Mr...
...Now I urge what has been called conscription of wealth, but I think the fairer term is the equality of financial sacrifice...
...I should like to know what authority there is for the figures you are' presenting, because they are astounding...
...Mr...
...I would like to, sir, but I certainly can not take the position that this war should be an excuse for piling up enormous debts, and my position is that I would like to have the war paid for, as nearly as possible, as we go along...
...Mr...
...The enormous incomes which many Americans received before the war, and which have been augmented by the war, if permitted to continue, will create an internal revolution in America after this war, or breed war...
...Mr...
...Benjamin C. Marsh, Executive Secretary of the Farmers' National Committee on War Finance, in the hearing on the Revenue Bill being held by the Ways and Means Committee of the House of Representatives...
...Mr...
...All enlargements are made by borrowing the surplus earnings of somebody else or using one's own surplus earnings...
...It is hardly keeping good faith with our fundamental patriots and genuine heroes and soldiers of the common good to treat them in such fashion...
...I have had to make an estimate, because I have not been able to get the total of the receipts from the people in the different classes, but you gentlemen can see those things of course, at any time...
...I estimated about $140,000,000 which is pretty conservative...
...Mr...
...My plan is to put the man of wealth on the same plane as the man who relies upon his earnings...
...The President has shown statesmanship in getting a group of well equipped men to study the terms of the settlement at the conclusion of the war, which will, as far as humanly possible, prevent a future war...
...Before you proceed let me ask you this question: You are not trying to substantiate this $50,000,000,000 or $60,000,-000,000 income feature in any way through the official report of the Commissioner of Internal Revenue, which shows $8,000,000,000 ? "Mr...
...He might have industries in which he was engaged and if you took all of the balance from him it might do a great deal of harm to people who were dependent on him for employment...
...On the basis of 1916 income tax returns if we take all income more than $50,000 some 9,119 persons would pay $1,680,000-000," he said...
...we have got to supply him with munitions of war...
...By enforcing equality of financial sacrifice In ib.il impending revenue hSQ, the Congress can Effectively back the other essential step in this war to end war—the defeat of Kaiserism...
...Moore...
...Moore...
...Would your proposition to take all in excess of $100,000 prevent him from putting that $600,000 into an enlargement of the industry, or is it your proposition to take ail of the $900,000 and put it into the Treasury of the United States...
...MARSH said that during the war no patriot would want an income of more than |50,000...
...Our immed-iate task is to exterminate Kaiserism, but it would be consummately foolish to exercise one evil spirit and breed others...
...I think it is illogical to put it upon a percentage basis unless it is necessary, no more than I think it would have been logical at the beginning of the war to say that 1,000,000 men would be our maximum Army...
...I am sure there is no man in this country who thinks that this war is for the purpose of piling up large debts...
...Of course, a property owner has that deducted while a tenant does not have those things deducted at all, and frankly, I think that is all the income that should be allowed a man, although you might put it up to $100,000...
...Now, you do not relieve the men with an income of $2,000 do you...
...From income taxes,therefore, at least $3,480,000,000 can be secured...
...I am going to quote a rather conservative authority to you, the Bankers Trust Co., of New York, among others, and the Commerce and Finance Journal...
...My question was based on an essential industry...
...Mr...
...I have not mentioned a capital tax, and your criticism would lie only against a capital tax, which, by the way, has been discussed, as you know, in England, and which, I think, it would be very foolish to attempt at this time...
...This is in addition to the $2,000,000,000 in receipts from miscellaneous sources...
...But you know that a soldier must be maintained...
...50,000 is Sufficient MR...
...Garner...
...Treadway...
...If all of the surplus earnings must be put into the Treasury where would you get the capital with which to enlarge a business...
...Hawley...
...Mr...
...Mr...
...Would you take it from him...
...Mr...
...I would like to know what you have behind the Bankers Trust Co., or this professor, whose statement is that the incomes last year were anywhere from $50,000,000,000 to $68,000,-000,000...
...Moore...
...The Commissioner of Internal Revenue does not give any figures as to the incomes of the 10 people whom he knows to have incomes of over $5,000,000...
...It would prevent him from putting that money into that industry...
...A man can not pay them if he does not have them...
...Roughly speaking, out of twenty-seven and a quarter million families, nineteen and a quarter million families had, in 1916, an income of under $1,950...
...You think that $50,000 is a sufficient income for any man to get in war times ? "Mr...
...Let us get down to your point...
...I would like to get at your plan...
...It has been suggested that we should put taxes upon consumption...
...That would mean the nationalization of all industries...
...Moore...
...we have got to build ships to take him over and get supplies to him, and do many things ' to take care of the soldier...
...I do not believe I ought to burden you with all these details...
...Mr...
...I am informed that he subscribed that much to the Liberty loan, the first one, I think it was, or perhaps the second...
...he is taxed, and so is the man who earns $50,000...
...I do not know why you should not...
...Louis urging that the Government should take over all incomes in excess of $100,000...
...I think it would mean the breaking up of business...
...Would you confiscate it or just deliberately legislate it out of his hands, or what would you do...
...I have never seen a man who was so patriotic, as you intimate, as to be willing to give the Government l.1 of his money above a certain amount...
...Moore...
...What are you reading from...
...What would you do with the rest of his income...
...It would seem that $50,000 would be enough for a patriot, and a certain number are not entitled to more than half that...
...Mr...
...MOORE...
...The farmers appeal to the spirit of justice which we know needs only to be invoked in Congress to secure favorable response, to prevent such inflation as would perpetrate this injustice upon all branches of the service and upon the people of America as a whole...
...Rockefeller agreed that his father's property was worth over $1,000,000,000, and I think it is safe to put his income at around $70,000,000...
...How much of our total war expenditures do you want to raise by taxation ? "Mr...
...If we do not nationalize industry we are going to lose the was...
...Young Mr...
...I got the incomes of over $3,000 from the report of the Commissioner of Internal Revenue...
...I could not put the case with any more force or with more cogency than did the President in his address to you a week ago last Monday...
...pamphlet, which I have here...
...Mr...
...You may recall that the Grange adopted a resolution last year at St...
...Even with the percentage of bonds to taxation which we have followed, the $30 per month which we pay the soldiers will be worth next year only about $20, probably nearer $18...
...Mr...
...The above statement was made by Mr...
...Mr...
...Moore...
...I tried to make that clear...
...I certainly trust that you will ask that the incoems at least those over $25,000 be made public, and that ought to be made a part of this bill...
...Mr...
...When you ask a soldier to go and fight you do not say, 'Will you give • 50 per cent of your life to the government?* "Mr...
...Anderson, of Harvard University, estimates the national income for 1917 at $68,600,000,000...
...Mr...
...The distribution of income is simply astounding...
...It would not be interfering with the legitimata business interests of the country to have taken most of this money from the wealthy in taxes any more than it did in loaeo, because in both cases, the capital wa -withdrawn from private use and made available for the Government...
...but if you take . away the money that a man earns through , an enterprise which is devoted to the support of the war, I am wondering where yon are going to land...
...Sterling...
...The policy of taxing consumption to leave big incomes free foT foreign investment *« a miserable method of fostering International dissension...
...There are nine men who have an income from $4,000,-000 to $5,000,000, making an aggregate of $40,-500,000...
...I have worked them out and it will take a good deal of time for me to read them to you, and unless you want me to do so, I will put them in the record...
...Moore...
...He has planned to extend his industry so as to produce more of the things needed for the war and intends by the expenditure of $600,000 of that million dollars, to enlarge the industry...
...The Bankers Trust Co...
...Continuing tie thought of the above quoted paragraph, Mr...
...Mr...
...is that the idea...
...Of the Second Liberty Loan $1,527,000,000 was subscribed in amounts over $200,000 and $242,000,000 in amounts of $100,000 to $200,000, a total of $1,796,000,000...
...estimates that in 1916 the total national income was $50,000,000,000...
...Then above $100,000 you would take everything away from him...
...I would put it into the Public Treasury...
...It breeds financial imperialism...
...Moore (interposing...
...IN the first Liberty Loan nearly $958,000,000 was subscribed in amounts of over $250,000...
...We want to raise revenue without producing inflation and in such a way as to conserve the material resources of this country at the same time...
...If you destroy the incentive of a man to have an income because the Government is going to take everything away from him above a certain figure, how are you going to collect taxes at all...
...It seems to me that the whole conduct of the war should be upon that principle...
...that $8,000,000,000 represented the corporate income returns and has nothing to do with the incomes from individuals...
...Mr...
...He promises to prepare some figures which I will be glad to submit...
...I do not see how a patriot could ask for more than $50,000 to live on...
...I would simply say that Xbm income of such an individual should, be utilized directly under Government supervision...
...I do not want to put it upon a percentage basis...
...I do not know any better way to prevent that than the way the Government has of putting the property and incomes of this country on the same basis as it is putting the men of the country, or, perhaps, it would be fairer to say, on the same basis that the men of the country ask to be placed in this war...
...It would be just as illogical to do that as to say what the percentage of taxation shall be...
...Now the inflation is going on very rapidly and— Mr...
...Your question postulates a lack of patriotism on the part of the rich which I would not expect anybody but an L W. W. to accuse them of...
...A heavy tax oa lower incomes would yield approximately $1,800,-000,000...
...There are several men whom I know have incomes—that is so far as people pretty high in Wall Street are informed—of from $10,000,000 to $12,000,-000, so that $140,000,000 is a pretty low average for the aggregate income of these 10...
...Longworth...
...Hawley...
...The Government is today assuming, and necessarily so, absolute control over all industrial activities, financial transactions, and everything else in the United States—railroads, express companies, and everything else, and it can not do that logically as long as the Government has got to go out and compete with private capital which may be going into nonessential industries...
...Mr...
...But I am not talking of a capital tax...
...No Excuse for Debts...
...It seems to me that in this revenue bill we have two things which we want to do...
...Mr...
...As a matter of fact, is not your plan that of practically confiscating and taking for the Government everything a man earns over $50,000...
...LONGWORTH...
...Get it from the Treasury, into which it goes, because that is where it will go...
...In other words, you are killing the goose that lays the golden egg...
...From the Bankers Trust Co...
...No, sir...
...Marsh said: "Germany is paying only about 15 per cent or less of the cost of the war by current taxation because she fondly and futflely hopes to collect war indemnities, If we should do the game thing, we would be terribly tempted to enter upon a policy of aggression, similar to ^hat of Germany...
...Hawley (interposing...
...no matter what happens, we will not send one more man over the million men to France to make the world safe for democracy...
...Mr...
...It seems to me pretty obvious that if you take the income which a man might spend upon luxuries, if you are going to have war economy you have got to see to it that people do not blow the money in foolishly...
...For Equality of Financial Sacrifice Benjamin G Marsh, of Farmers' National Committee, Calls Upon Public To Back Up President's Idea of Taxing Profiteers "B ILLIONAREISM is almost as great s menace as Kalseriani...
...When you come right down to it taxes on consumption are indirect income taxes...
...You want to raise all of these expenditures by taxation...
...It does seem so to me...
...000 I will compromise on that, so far as we are concerned...
...During 1916 the net taxable income of corporations in the country was nearly $8,700,000,-000, at least half of which should be taken...
...Surplus capital, that is unearned wealth, competing for privileged concessions, and the exploitation of backward or undeveloped count-ties Is a menace whether in Germany, England, or America...
...Treadway...
Vol. 10 • July 1918 • No. 7
