epends 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.

_Even in Great Britain_, whose financial burden is the heaviest of all,
whose debt is many times the total of ours and who has loaned about
$5,000,000,000 to her Allies, the highest income tax rate, the maximum
percentage in the graduated scale of taxation, is to-day no more than
approximately forty per cent.

In the last budget, introduced a couple of weeks ago, the British
Chancellor of the Exchequer declined, so I am informed, to consider an
increase in the income tax rate, because of the damaging effect which
such increase would be apt to have on the country's business and
prosperity.

In France and Germany the burden laid on incomes is much lower than
in England. _In Canada_ where war loans have been raised equivalent
on the basis of comparative population to what would be more than
$10,000,000,000 for America, _no Federal Income Tax exists at all_.

I doubt whether this latter fact is generally known in this country and
whether its significance is receiving the measure of serious
consideration which it deserves.

I understand that it is the deliberate policy of the Dominion
Government to endeavor to avoid resort to an income tax in order to
attract capital to Canada.

There can be little question that if our income taxation is fixed at
unduly and unnecessarily high rates, whilst Canada has no or only a
very moderate income tax, men of enterprise will seek that country and
there will be a large outflow to it of capital in course of time--a
developme