Page:Walter Renton Ingalls - Current Economic Affairs (1924).pdf/147

Rh would tend also to increase the markets for our raw materials, which also is a thing highly desirable to bring about. The removal or modification of the tariff barrier would be much more effective than the immigration barrier and much quicker in its results. Notwithstanding the great height at which the tariff barrier has been fixed the pressure from Europe is creating a strong tendency to overflow it. Our export balance is diminishing, if not disappearing.

Among our economic restrictions of purely internal effect one of the greatest is the vicious system of federal taxation, which is founded on the fallacies that the American people became rich out of the war and that there has been an increased concentration of wealth among a relatively small class of the people. Our system of federal taxation is therefore founded upon the thought that is vulgarly though graphically expressed in the phrase “soak the rich.” This is put into practical effect by heavily increasing surtaxes, falling upon relatively few people, while the system of levying and collecting income taxes is such that probably some millions of people who ought each to pay a little escape any payment at all.

While recognizing the validity of taxing people according to their ability to pay, it may be held that our existing method constitutes an economic restriction of most serious character. Its vicious effects are manifold. Among the most important are the destruction of incentive to enter into new enterprises with hope of large profit if the government is going to appropriate a large share thereof; the diversion into tax free investments of capital that should be employed industrially, the diversion often leading to extravagance and waste;