War Taxation: Some Comments and Letters

by Otto H. Kahn

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.