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Show WHAT IT COSTS TO GOVERN US By PROF. M. H. HUNTER Dept. ol Economics, University of IllinoU. Federal Taxes Upon Commodities THE Civil war was responsible for the first extensive use of taxes on commodities by the federal government. govern-ment. The failure oi fhe first tariff act to provide sufficient revenue led Alexander Hamilton to advocate a commodity com-modity tax, especially on whisky. The use of the tax was unpopular and was given up in 1S02, to be revived again to help finance the War of 1S12. This was given up in 1817, and not used again until the emergency of the Civil war. The pressure for funds during the Civil war led congress to resort to commodity taxes, first In 1802, and greatly to extend them in 18G4. The plan was to levy low rates upon a great mass of commodities. Nearly every class of raw material bore a tax, as well as the finished product, while a tax generally was placed upon transportation and sale. After the war changes were gradually made until the tax applied principally to tobaccos and liquors. During the Spanish-American war commodity taxes were greatly extended, extend-ed, the rates were practically doubled, so that the returns formed a considerable consider-able portion of the total revenue. At the end of the war their use was curtailed cur-tailed to practically their former basis. During the World war tire use of the commodity tax was greatly extended, ex-tended, the rates upon liquors and tobacco to-bacco wer? greatly increased, In some cases more than doubled. Taxes were levied upon freight, express and passenger pas-senger transportation; and upon telegraph, tele-graph, telephone and radio messages. The list of taxable goods was greatly extended to include such articles as automobiles, motor cycles, musical instruments, in-struments, camefas and jewelry. A tax was also levied on the retail price, in excess of a certain amount, of a large numhei of articles. After the war a great deal of objection ob-jection arose to these "war taxes" and "nuisance taxes." Modifications and repeals re-peals have been made until now we have the excises providc-c by the act of l!12n. The tax on cigars and cigarettes varies according to weight and retail price. The tax upon admission to places of amusement applies only if the price of admission Is more 'ban seventy-five cents. Annual dues or initiation initia-tion fees jf more than ten dollars to athletic and social clubs are taxed 10 per cent. Steamship tickets to' ports other than in the United States are taxed from one lollar to. five, depending depend-ing on the price of the ticket. The Federal Estate Tax pMEItClKNCIKS have caused the fed eral government to turn to Inheritances Inher-itances as a soruce of revenue. To heip finance the Civil war and the Spanish. American war the federal government levied such a tax. In each case It was repealed soon after the war. During the World war this source was again taxed, although the entire estate was niad-the niad-the base of the tax rather than the shan of each beneilciary. The highest rates are not found In the war revenue acts, but In the revenue rev-enue act of I'.t'J-J. t'mler this act th. rates were progressive from 1 per cent to 4 per cent on graduations ranging from J."i(t.(.HKJ to $10.tKH).(KHI. This apparent ap-parent Intention of the federal government govern-ment to retain the tax brought forth a storm of protest from state officials. One of the principal grievances was that the federal government was entering en-tering a flcld already pre-empted by the states. If this reason be considered consid-ered valid, then the federal government govern-ment could tax neither Incomes nor corporations, for both were used as sources of state funds before the federal fed-eral government began to tax them. The law was changed In l'.l.'il The maximum rate was reduced to 2(1 per cent on the amount of nil estate In excess of $10.i-HMi.tKKL while the exemption ex-emption was raised to SKMI.iiim The law provides, further, that a credit will he allowed for state taxes up to an amount not exceeding Sn per cent of the federal tax. Thus. If on an estate the federal tax amounted to S'-OO. and the tax levied by the state was SI.'iO, the federal government would collect but S".0. since It would allow a credit of any amount up to So per cent of the $200 tax. Some state nlllrluls have been especially es-pecially hostile to the SO p,T rent credit provision Those of Florida feel that their state was particularly In mind Hhen the provision was Inserted since only recently Florida had adopt' cd a constitutional amendment prohibiting pro-hibiting the use of Inlierllance taxes They lake the position that congress' by the SO per tent credit provlsh,,,' Is iktlemntliig to force Florid;, to u,,,t an liiherliance lax. for otherwise sums would be going t.) the federal Ireasnrv which might otherwise g t ,,, of the s'ate. Should the federal goveniineni give up Hi" "stale lax. as tunny ,en then the loss In receipts must h )ln(V up from some oilier souivo f states abandon tl,s n,.,,,, ns sanu ; gesi, then property, r ,,, ,,, must be taxed more heavily. end. tin- Justice of the rtillr,. tax sis torn musi be considered, and !.,' , no goo, reason why t ,,w ni). '"' "s"'1 ''-v ,"" f'-ilernl and .s,t governments, nor why ,-v shomd ,,, cooperate to ,ko It Just and unl-form. unl-form. di Wt. W,.ru NT.pni.or V,H , |
