Evening Republican, Volume 21, Number 14, Rensselaer, Jasper County, 18 January 1917 — Taxing of Extravagant Expenditures Would Promote Productive Investment [ARTICLE]

Taxing of Extravagant Expenditures Would Promote Productive Investment

By FRANK A. VANDERLIP

President National City Bank of New York

I believe the whole theory of the tihation of incomes is wrong. In saying that, I do not mean that I would deny the weight of taxation should fall in an increasing ratio on great wealth. * Instead of taxing incomes, I believe we should tax expenditures. The income, no matter how large it may be, that is all promptly returned to reproductive investment is of the greatest value to society; its owner is only a trustee, who gives his experienced judgment to returning the income wisely to society. It is not great incomes that we should object to, but great expenditures that are made for unproductive purposes that represent lavishness and extravagance. Lavishness and extravagance are by no means confined to those who receive great incomes. Such expenditures are a double destruction; they destroy the capital so spent, robbing society of its service, and frequently they destroy the ability of the spenders to render society full service. The man who, by judgment, thrift and economy, by moderate living and modest expenditure, accumulates an income which he promptly returns to reproductive work, is rendering the highest type of service, while profligate expenditure, whoever is responsible for it, robs all men and leaves the nation poorer by its double reaction.