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Show The Nation's Tax Puzzle During recent years a tax structure lias developed in the United States which favors consumption and penalizes penal-izes production. This point was emphasized in a research report puhlished by Utah Foundation, the private tax research organization. The report shows that the U. S. leads all major industrialized nations of the world in the amount of emphasis placed on income and capital taxes in its tax structure. In I960, for example, taxes on income and capital accounted for nearly 78 per cent of total tax receipts by all levels of government (federal, state and local) in the U. S. For the federal government only, the percentage exceeded 85. According to the Foundation, income and capital taxes make up approximately 66 per cent of the total state and local tax revenue of Utah. For the nation as a whole, income and capital taxes constitute con-stitute about 60 per cent of all state and local tax collections. collec-tions. Foundation analysts conclude that this accent on income and capital taxes discourages production and favors consumption with a resulting injury to economic incentives and industrial growth. According to the report, "the tax systems of other nations weigh less heavily on production, apparently recognizing that it is production that yields the fruits not only for consumption but also for future progress." 4 (Continued on Page Four) The Nation's Tax Puzzle (Continued from Page One) The national tax system has been subjected to much study and criticism during recent years. The Foundation report observes that the House Ways and Means Committee Com-mittee alone has gathered over 16,000 pages of testimony m relation to the federal tax question from scores of expert witnesses. Among the chief complaints that have been leveled at th epresent U. S. tax system are that it (1) restricts the freedom and initiative of the individual, (2) weakens incentives, (2) cuts rown on potential earning power, (4) forces savings and spending into artificial or unnatural un-natural channels, (5) discourages extra efforts and risk, and "(6) unduly limits private saving, investment and spending. "Taxpayers feel helpless, frustrated and resentful. Tax considerations become too important a factor in personal and family decisions. In some cases it is more important to save taxes than to earn income or to spend income as the taxpayer would choose. Personal saving and investment are discouraged, as compared with spending spend-ing for consumption. Under these conditions taxpayer morale drops and a cynical attitude toward government develops. Severe strain is put on voluntary compliance, the basis of the whole system of income taxation in this country and not a few taxpayers give way to the pressure to evade and conceal." |