Show IS AX IVCOME TAX DESIRABLE II I Ii I In the March number of the Forum an article appeared by David A Wells i I i entitled An Income Tax Is It DoI I I sireable It is a plausible paper but I transparent to people with eyes trained iI I i to see through sophistry The New I I York World of a recent date contained a reply by one who is not only able to i penetrate the thin veil but to tell plainly plain-ly what he beholds We copy his ar I I tide entire as it makes good reason I and furnishes a full answer to the I question 1 I It may be assumed that so far as fairness justice and equity are concerned con-cerned in any rational system of taxation taxa-tion the statement of Adam Smith that the subjects of every state ought to contribute towards the support of the government as much as possible in proportion S pro-portion to their respective abilties that I rti np l er is in proportion to the revenue they respectively enjoy under the protection I of the state cannot be successfully I controverted Acceptance of and adherence I ad-herence to that maxim will produce comparative equality of taxation Reject Re-ject that maxim and inequality of taxation I taxa-tion will inevitably follow as certainly as night follows the day I Dr H Von Hoist says in his Constitutional Consti-tutional Law of the United States The ideal of tax legislation in all modern I mod-ern civiliaed states must be to have each Individual bear the public burdens in the exact proportion that his ability to pay taxes bears to the taxpaying ability of the entire population The realization of this ideal is impossible J It can be approached only by combining combin-ing different taxes in such a way as to make their defects balance each other Mr Wells makes the usual allegations as to the administration of an income tax law that it must be arbitrary and I f uls 16rI inquisitorial and must employ methods jwhich perfectly consistent with a despotism S des-potism are entirely antagonistic to and I incompatible with the principles and 1 maintenance of a free government Right here it must be asked Would an income tax law be more arbitrary or inquisitorial than the present internal inter-nal revenue law of the United States i now in force relative to spirits beer I wine tobacco etc Would he or any considerable body of statesmen in either of the great political parties favor fa-vor the repeal of the present Internal revenue law on the ground that itis a menace to the maintenance of a free government If so when And further fur-ther can qny considerable number of statesmen or political economists be found who would favor the repeal of I the internal revenue lawof the United i I States on the ground of its beinga war tax or favor its repeal on any I ground whatever And yet it had its j origin during the civil war and is inquisitorial I in-quisitorial asall taxes in the very nature na-ture of things must be The fact and I the truth are that it has become a permanent per-manent fcaure of our taxation taxaton I Mr Wells brings In array the French Revolution to what good purpose itis not apparent if he intends to cite the I past or present system of taxation in France since the Revolution as being a liberal system of taxation Names and 1 I forms may change but the underlying principle still remains He says There has been nothing corresponding to a I general income tax in the fiscal system of France since the Revolution of 1789 i Now what are the facts And first I I as to her system of trade licenses which are of the very nature of an income in-come tax and are intended as such in I her fiscal system as they are avowedly in the fiscal system of Louisiana Receipts I Re-ceipts from trade licenses in France for the year 1892 were 120775120f She levies a capitation or poll tax of from I 50c to 4f 50c upon each person not a pauper Her municipalities still maintain in full force and vigor the odious octroi duties which reach every I I thing and everybody From such an indisputable I I in-disputable showing to say nothing I j about other forms and methods of taxation tax-ation which I she constantly employs ftt llub1 Jlro I it may tre well doubted and from whatever I ever point of view it is examined I j whether there is any possibility of any other conclusion than that her system I sys-tem of taxation is highly inquisitorial inquisitor-ial j Mr Wells states that Russia sometime some-time since abandoned the idea of an I Income tax to which statement it must be replied She has and levies a I trade license tax in addition to which she levies a 5 per cent tax on some j forms of capital I Mr Wells further states that the only one of the great government of the world at the present time which can I prefer a claim to a large measure of success in administering an Income taxis I tax-is that of Germany and especially that o the Kingdom of Prussia To that broad and sweeping assertion let the facts make answer Now the facts are as to most of the European states that they have either a direct income tax or a thinly disguised dis-guised income tax under the name of trade licenses AustriaHungary Germany Ger-many Great Britain Italy Norway Roumanla Servia and Sweden levy and collect a direct Income tax Belgium Bel-gium Greece France Portugal Russia Spain and most of the balance of the European states have a system of trade licenses which Is similar to and of the same general character as an Income In-come tax A to Great Britain it may be confidently confi-dently asserted that the belief is widely entertained among political economists and statesmen that Great Britain has had the widest experience and it maybe may-be added the most eminent success in the matter of an income tax She imposed im-posed that tax for the first time in 1798 and continued it with I brief respite until the peace of 1815 when It was repealed I was reimposed in 1842 by Sir Robert Peel and has been in continuous con-tinuous force since whatever tnuous ever party or whatever Ministry might be in power Since 1842 no Chancellor of the Exchequer has ever for one moment seriously proposed that the income tax be repealed I long since became a permanent feature In the British system sys-tem of taxation by reason of Its justice its fairness and its equity As a method of taxation it is regarded with the hlshest favor Mr Wells seeks to array Mr Gladstone and the late Lord Beaconfield as opponents op-ponents of an Income tax In Great Britain Brit-ain quoting from some utterances of Mr Gladstone made in 1S53 which must have been made under the impulsive emotion of his then youthful enthusiasm enthusi-asm and from some of a later date 1S74 It must have been in a burst of hist own exuberant verbosity when he was ready to promise his followers L l 4 the earth and the fulness thereof and the repeal of the income tax in particular particu-lar But then as is well known he went down and the Tories won Since 1874 Mr Gladstone has been three times Premier the last term but just closed Never during all the years when he al was supreme in the councils of his party did he fake any positive and decided de-cided action looking to a repeal of the income tax Mr Wells quotes some vague general statement made by the late Lord Bea confieldthen Mr Disraeli in 1853 as showing his hostility to an Income tax Lord Beaconfield was In parliament Parlia-ment continuously for more than a contnuously and quarter of a century afterwards until the general election of 1SSO During Dur-ing that long period of distinguished Parliamentary service he held office In four Ministries twice as Premier By reason Inistrles commanding genius nit profound sagacity and his great statesmanship states-manship he was supported by his party with the greatest pride and most heroic devotion and any measure repealing devoton and the income tax which he might have proposed would have become law But repeal of the income tax never had his absolute support or that of his party either in or out of Parliament He would as soon have thought of repealing repeal-ing the excise tax The repeal never came Where it may be asked is the proof of Mr Wells allegation that from the outset the income tax has odious and unpopular in been more Great Britain than any other form of taxation The answer must be that no proof exists The amount derived from the Income tax in the United Kingdom for the year I ending March 31 1892 was at 6d per pound sterling 13810000 As to the history of the income tax in the United tates commencing in the early years of the civil war it was in I force about ten years when it was repealed re-pealed The control of the government had then passed into the hands of the wealthy classes They together with the manufacturing railway and mining interests may be said to have dominated domi-nated and controlled the fiscal policy of I the United States completely In consequence con-sequence thereof and under the then existing conditions Congress was confronted con-fronted with the prospect of what was then thought to be an excessive revenue reve-nue derived mainly from the high tariff I tar-iff and internal revenue which included in-cluded the income tax Realizing fully that an income tax is a difficult tax to shift to others that a tariff tax on all the first and chief necessaries of life I was more nearly like a poll or capitation capita-tion tax than any other tax the wit of man has yet devised no frontier line I dividing them that an income tax is I paid by wealth that tariff taxes must I i be paid by the masses it was decided i I that the tariff must stand and the income in-come tax be repealed And repealed it was not because it was not fairly productive pro-ductive for productive It certainly was as the records of the United States treasury conclusively show Nor was it because of the great cost of collection collec-tion for it was collected more cheaply than any other revenue in our history There was a decrease indeed in the amount collected during the latter part of its existence which was chiefly due to three general causes The first was the fall in the premium on gold and consequent fall in the price of commodities com-modities The second was the additional addition-al exemption decreasing the amount on which tax was paid The third was the lax administration of the law owing ow-ing to the allpowerful influences then in control of the government Dr H von Hoist in his Constitutional Constitu-tional Law of the United States speaking of an income tax In relation to the several state constituents says that this method of taxation does not enjoy In the United States the favor it is more and more receiving among European Eu-ropean statesmen and landlords In another place he save Americans are aware that in many respect incomes are the best measures of taxation Mr Wells says No state in the Union has a more illiberal allpervad ing system of taxation than Massachusetts Massachu-setts and that in no state is the administration ad-ministration of tax laws more stringent and arbitrary By those familiar with her history no denial will be made of the grave charge against her methods She has ever vaunted equality and constantly con-stantly practised inequality in her methods of taxation For instance i is stated that the market value of shares of foreign corporations held by the citizens of Boston alone is known t be over 600000000 I is further alleged by the Boston Advertiser as quoted by Mr Wells that comparatively compara-tively few of the taxpayers of Boston make any returns to the assessors of their income The receipts from income in-come In the city of Boston for 1S92 were 84000 and according to the Advertiser Adver-tiser as quoted by him this is only about onefourth of what is due the city from incomes I is further alleged al-leged that nearly all of this that is known is taxed to the unfortunate people peo-ple whose estates are in trustIn other words mainly the estates of widows wid-ows and orphans together with the insane in-sane All this according to the unblushing un-blushing confession is by the grace of Massachusetts and the practice of Boston Bos-ton It only proves how bad a bad administration ad-ministration of the law can be l may well be asked Shall this display I dis-play of Massachusetts injustice deter the enactment of a fair income tax The answer must be no I Mr Wells after setting in array so many alleged reasons why the Federal Government should not reenact an income in-come tax among others that it would I be odious obnoxious arbitrary Inquisitorial Inquisi-torial uncertain unequal unproductive unproduc-tive etc says But when so many I sources are available to the National j Government for obtaining revenue it would seem to be impolitic for it to encroach en-croach on those methods which are particularly applicable to the States as income taxes taxes on legacies and I successions which are governed and protected by State laws I The final admission by him that a State income tax Is admissible at once I I suggests the question I a State income i tax why not a United States Income tax Would an income tax be more odious obnoxious arbitrary inquisi tonal unequal and tyrannical if laid by the United States than if laid by a State In what possible degree could the principle underlying an income tax differ in the one case from the other As to his main position this admission is him fatal and judgment must be against himFinally as to the allegation that an income tax is sectional the answer must be that New York could as well claim that because the bulk of tariff duties on importations is paid at that port the tariff is sectional or Peoria claim that the internal revenue law is sectional because a large share of the hjghwines manufactured in the United States is made there An income tax applies wherever wealth is concentrated concen-trated as concentration is a law of its existence whether east west north ors or-s uth I As to the oftenrepeated assertion that there woud be evasion practised i I in the case of an income tax it may be replied that evasion is practised in the I case of all taxes In the case of the tariff evasion Is ever present Success in evasion is not necessarily greater in the one case than in the other Are the advocates of a tariff prepared to aban don I because evasion always menaces i II The solid basis upon which rests the absolute justice and equity of an Income sY dtheeq I come tax is that in the complex forms j I pf modern civilization vast and rapidly 1 Increasing masses of wealth foc represented I repre-sented by gb and stocks or other paper pa-per representatives either wholly escape es-cape or make but slight contribution towards bearing the burden of taxation tax-ation An income tax is the only ta that can reach this wealth PEARSON K MARFLEET |