THE NOME DAILY NUGGET
GEO. S MAYNARD. Editor
RUSSEIX G MAYNARD. Manager.
Published every evening except Sunday by The Nome
Publishing Company, Nome, Alaska.
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ON THE MEANING OF TAXES
With the “twentybillion dollar” Congress out of
the way, and the United States Treasury beginning its
new fiscal year, there is perhaps some time for reflection
upon the subject of taxes. During the recent political
campaign, that subject was most certainly not over
looked by either side. But political campaigns have a
way of generating heat rather than light.
Taxation talk in recent months has been expressed
in terms, for the most part, of “soaking” somebody. One
day it is the rich, that are to be soaked One day it is
the big corporation. Another day it is the “thrifty”
who bear the brunt. Then somebody comes along and
gets pretty close to the truth by declaring that every
body pays taxes and Mr. Average Citizen gets his full
share of the soaking.
Unce in a while, it is a good idea to think about
these things without putting it all down in terms of
money. Ihe tax question becomes more readily under
standable with the dollar signs left out.
For what does any government really do when it
taxes its citizens ?
No modern government ever wants money just for
the sake of having money. Ancient kings used to do
that sort of thing, and piled up treasure in their store
houses. But nowadays governments collect money
thru taxes in order to be able to spend money. They
spend money for goods and services, like anyone else.
So what a government really does with its taxing
power is to take control of a certain share of the nation’s
annual production of goods and services. The stream
of goods and services, as economists would put it, flows
along through the efforts of labor, management and
capital, and from that flow, the government diverts a
proportion to its own uses.
Hence, when we say that taxes amount to nearly
one-fifth of the national income, we merely mean that
one-fifth of all the goods and services being produced in
the United States are shunted into the hands, not of
their producers, but of the government.
The government itself, as an institution, has no
great use for goods and services. It passes those goods
and services along to its employes—good, bad and in
different. So it all comes back to the very simple fact
that those persons who are living off the government,
by one means and another, are in reality living off the
rest of the population.
When taxes are considered as a diversion, not of
money from those who are presumably able to pay, but
of current production, switched out of the regular eco
nomic stream and into the hands -of those who hold
claims against the government, the real meaning of
taxes becomes more apparent.
So does the limit on taxation. For when, as and if
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the government shunts off too large a proportion of the
national stream of goods and services, that stream sim
ply dries up. The reward of those who produce the
stream dare not be cut below the point at which the
incentive to produce disappears. And the heaviest tax
rates on earth avail nothing if there is no physical in
come (current production) for the government to buy
with its tax funds.
It is sometimes said that when the government
taxes corporations—especially “big” and “rkh” cor
porations—the taxes are painless so far as the individ
ual citizen is concerned.
Of course, that is nonsense. Corporations do not
exist of and by themselves—floating in air and dissoci
ated from human beings. Corporations are always
owned by somebody. They are merely aggregations
of property, the title to which is split up in many por
tions and passed about as stock certificates. When a
corporation is taxed, its owners are taxed. There is no
other way out of it.
But that isn’t all. When the government, with its
tax money, comes into the market for goods and ser
vices for its wards, it necessarily competes with every
man who has his own income to spend in the market
places. So the government not only takes the citizen’s
money from him, but turns around and bids against him
for a share of the flow Of production upon which every
person in the land depends for a living.
Taxes are necessary. Nobody doubts that, govern
ments must be maintained. The real question is how
i expensive a government any country can afford to have.
Straight thinking on the tax problem is the first essen
tial if that question is to be properly answered.—Ex.
RISING GOLD SUPPLY MAY PRODUCE A BOOM.
It would be a fine joke on somebody if gold—that
prized and maligned yellow metal from which nation
after nation has cut the moorings of its currency—
should yet be the means through which a suffering
world might re-enter the magic land of prosperity.
Such a possibility is actually in the cards. Wheth
er it will in fact be dealt out is, or course, an open ques
tion; but it is there, waiting for the fates to bring it
if they are so minded.
A writer in a recent issue of the New Republic
pointed out, for one thing, that there has been an im
mense increase in the stock of monetary gold held in
the United States. In 1930, that stock stood at about
$4,000,000,000; today, it nearly $10,500,000,000.
Furthermore, the excess reserves of Federal Re
serve member banks are so great that approximately
$60,000,000,000 of additional loans could be made again
st them.
Thus if inflation means issuance of new money and
extension of credit, we could have a big-healthy dose
of it in this country even if we anchored our currency
most solidly to gold.
But that is only part of the picture. In June, the
London Economist pointed out that world production
of gold has increased tremendously all through the de
pression. Before the depression, the record for world
production was set in 1915, with an output of 23,000,000
ounces. In 1935, production was 31,000,000; by 1940,
it will probably be 40,000,000.
The world’s stock of monetary gold has been in
creased by more than 32 per cent since 1929.
Roosevelt Boarded
Cruiser Enroute
So. America
(By The Associated Press)
CHARLESTON, N. Carolina,
Nov. 18, —President Roosevelt
embarked on the Cruiser Indian.
apolis this morning, the occasion
taking place in a ceremonious
setting.
He rode through two miles of
crowded streets, and was “piped
over the side” by two 21-gun sal.
utes, while COO hundred officers
and men lined the rails.
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OLYMPIC AND SCHLITZ BEER.
Also Bulk Wines and Liquors. We Are Closing out
Our Entire line of Mens Furnishings Rubbers
Boots and Pacs.
NOME LIQUOR STORE
(Next Door To Fire Station)
i
ARCTIC BEER PARLOR
AND CARD ROOM
Between Pioneer Drug Store And Dream Theatre
Jack Solomon, Pron.
To Start Red
Cross Drive In
Nome Dec. 5th
The Executive Committee of
Nome Chapter of the American
Red Cross met at the Hospital,
yesterday evening. It was decid
ed to start the Annual Roll Call
Saturday, December 5th.
Miss Mildred Scott was appoint,
ed Roll Call Chairman, with full
authority.
Dr. Robert Koch, a German phy
sician, announced the discovery
of the germ which causes tuber
culosis (the tubercle bacilluso in
1882.)
' COLORADO DIPS INTO TUNNELS . I
I
Mere is the Colorado river flowing through two diversion tunnels 29
feet in diameter (that’s about the height of a two-story house) after
its course was diverted to permit excavation 250 feet below the river
bed for the foundation of Parker Dam across the.river between Cali
fornia and Arizona. The dam will turn water into an aqueduct to serve
; "3 southern California cities 392 miles away. (Associated Press Photo)
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