all profits derived
from business_ over and above a certain moderate percentage,
regardless of whether or not such profits are the result of war
conditions. The American tax is a general tax on income derived from
business, in addition to the regular income tax. _The English tax
applies only to excess war profits_; that is, only to the sum by which
profits in the war years exceed the average profits on the three
years preceding the war, which in England were years of great
prosperity.

In other words, the English tax is nominally higher than ours, but it
applies only to war profits. The normal profits of business, _i. e._
the profits which business used to make in peace time, are exempted in
England. _There, only the excess over peace profits is taxed. Our tax,
on the contrary, applies to all profits_ over and above a very
moderate rate on the money invested in business.

In short, our law-makers have decreed that normal business profits are
taxed here much more heavily than in England, while direct war profits
are taxed less heavily. You will agree with me in questioning both the
logic and the justice of that method. It would seem that it would be
both fairer and wiser and more in accord with public sentiment if the
tax on business in general were decreased and, on the other hand, an
increased tax were imposed on specific war profits.

5. Our federal inheritance tax is far higher than in England or
anywhere else. The maximum rate here on direct descendants is 27-1/2
per cent. as against 20 per cent. in England. In addition we have
State inheritance taxes which do not exist in England.

III

Much is being said about the plausible sounding contention that
because a portion of the young manhood of the Nation has been
conscripted, therefore money also must be conscripted. Why, that is
the very thing the Government has been doing. It has conscripted a
portion, a relatively small portion, of the men of the Nation. It has
conscripted a portion, a large portion, of the incomes of the Nation.
If it went too far in conscripting men, the country would be crippled.
If it went too far in conscripting incomes and earnings, the country
would likewise be crippled.

Those who would go further and conscript not only incomes but capital,
I would ask to answer the riddle not only in what equitable and
practicable manner they would do it,[1] but what the Nation would gain
by it?

[1] It is true that a few years ago a capita