ican business men to sell their goods abroad. The Department of Agriculture is aiding the farmer in a thousand different ways. Many more illustrations might be given to show the way in which the Federal Government is caring for our interests.

Buying Government Service

It is well to remember, when we speak of the high cost of government, that it is selling us more and more of these useful services and that our taxes are merely a payment, and a legitimate one, for such services. When a man hires a plumber to thaw out the pipes which have frozen in his home, he expects as a matter of course to pay the bill.

We hire our government to give us good water, to keep our streets clean, to help us sell our goods abroad.

From our government come countless services which can only be performed through such agencies which act for all of us. Furthermore, what we spend in taxes for such services, in many cases, actually saves us hundreds of dollars in personal expenses.

Public health measures have greatly reduced the likelihood of our contracting disease. Child mortality today is half, in many cities less than half, that of twenty-five or fifty years ago. Our taxes have helped to bring about this change. Money spent on education is also well spent. A democratic government, depending upon a prejudiced and ignorant body of citizens to exercise the franchise and elect representatives, will eventually fail.

What the Government Taxes Debts, interest charges, and the many activities of the government require a great deal of money. The annual cost of government-local, state national-in the United States before the Great War was four billion dollars. Since that time this vast amount has been greatly increased. Not all of this money is raised in taxation, however, as the government secures part of its expenses in other ways, such as the sale of public lands, receipts from the post-office, water rates, and payments for other services.

In taxing, the government uses many methods to secure money to carry on the public business. The National Government, for example, levies an income tax which takes a percentage of the amount earned by an individual over and above a certain stated sum, such as one thousand dollars for a single person, or two thousand, or twenty-five hundred dollars for a married person. The more you earn, the greater the proportion taken by the government. Certain foreign goods-shoes, toys, chemicals, etc.-coming into the United States, are taxed. This method of raising money is called a tariff. In former years this was the most important source of national revenue.

The National Government also taxes liquors (for medicinal and scientific use), tobacco, playing cards and oleomargarine. Such taxes are called Internal Revenue Taxes. Before the Prohibition Act was passed a very large amount was secured from the manufacture and sale of liquors for beverages. The National

Government also taxes corporations, and at times imposes consumption taxes upon luxuries, such as fur coats, silk stockings and theatre tickets.

State Governments

State governments also use a variety of taxes. Like the National Government some states tax incomes. When people die and leave large sums of money to relatives, or other people, the state may take a portion for its own work. As in the case of the income tax, the state increases the proportion it takes of an inheritance according to the size of the amount of money left. It may also take a greater percentage if the individual to whom the money is left is simply a distant relative, rather than a wife or child. When the inheritance tax is increased for such reasons it is called a Graduated or Progressive Tax. State governments also tax real estate, mortgages, and corporations.

Local governments, acting under state law, also levy their own taxes for their own purposes. To a large extent real estate taxes furnish the bulk of the local government revenue. Retail stores, peddlers, push-cart men, may be required to pay a tax to do business. A new and ever-increasing source of revenue has been found in the taxing of automobiles. There are slightly over 11,000,000 automobiles and trucks in service in the United States. Each must carry a license, which is a tax. On the other hand, the automobile costs the government a great deal of money, through making good roads and traffic policemen necessary.

It is very difficult for a government to impose a fair tax on everyone. It tries to make the burden of taxation as light as possible on wage earners-especially THOSE WITH LARGE FAMILIES. Those who

enjoy large incomes and LIVE IN LUXURY should pay, in proportion, much more. This is just, although no man, rich or poor, should be exempt from paying

a tax. The government also tries to make the payment of a tax as convenient as possible. For this reason the INCOME TAX may be paid in quarterly install. ments. The government also tries to make a tax as little as possible; enough to pay expenses-only.

These illustrations show the many ways used by different parts of the American government to get money to pay their separate bills. A resident in America must pay directly or indirectly village or city, county, state and Federal taxes.

Dangers in Taxation

This variety in taxation methods makes it necessary to define a good tax. The power of taxation is a very dangerous, although an absolutely necessary and useful power of government. Chief Justice Marshall of the United States Supreme Court once said that the power to tax is the power to destroy. He meant that this great weapon of the government, if used thoughtlessly, unwisely, or viciously, might destroy any business. The American Colonists of pre-Revolutionary times realized the danger in wrong methods of taxation when they coined the phrase" Taxation Without Representation."

The makers of the Constitution of the United States, to safeguard the people against the wrong use of this power, specifically limited the National Government in its power of taxation. Congress may only levy taxes in order to "-pay the debts and provide for the common defense and general welfare of the United States." All taxes imposed by Congress must be uniform throughout the the United States. The Constitution also prohibits any tax or duty upon articles exported.

What Is a Good Tax?

Taxes may be good or bad. Every government must be care

ful how it taxes its citizens. Adam Smith, the father of modern economics, in a remarkable book called "The Wealth of Nations," published in 1776, laid down rules about taxes which are recognized as sound even today, and with which every citizen should be familiar.

In

First, he thought that citizens should be taxed according to their ability to pay. This means that wealthy people should pay in proportion a greater amount than poor people. It does not mean, of course, that the wealthy should pay all the taxes. the second place, a good tax should be levied at the time and in the manner most convenient for the citizens to pay. Lastly, a tax should take out of the citizen's pocket as little as possible above the amount actually needed to run the government.

The Justice of Taxation Taxation is compulsory payment for government services. A percentage of the income of every citizen is taken. Taxation always falls, in the end, upon us as individuals. When a man rents a house, his rent includes the tax upon the property. When he buys a suit of clothes, included in the price that he pays the retailer is a percentage of many taxes. For instance, there is the business tax of the retailer, the tax on the real estate-the land on which the store is built and the building-the corporation tax of the manufacturer of the cloth, and the tax on the land on which the sheep is raised or the cotton grown. Just a few of the taxes which the selling price helps to cover have been named. In like manner taxes are