The weekly mountain Democrat. [volume] (Placerville, El Dorado County, Calif.) 1861-1862, 1862-11-01
rs MOUNTAIN DEMOCRAT.
Prom the Ssslsuai Intsllissnser.
The ImeOme TaK.

Inc true COnftFuctlUn OF Tue act lnpO-
sing . tax upon incomes is the subject Of
deep interest and frequent inquiry. The
laws passed between 1892 and 1900, and
between 1918 anu 1915. Imposing inter
hal duties and excuses, throw no light up
on this subject, because neither applied to
incomes. The first law imposing Tux
Upon incomes was passed on the 9th of
august, 1861, and was repealed July LIST,
1853. Its provisions were essentially diff
q eFeOt from the present law, and it was
IN terms tax upon annual incomes. Ii
provided:
THAT from and after the first day Of
0ahUary next there shall he levied, col
lected and paid, upon the annual income
Of every person residing in the United
States, whether such income is derived
Rom any kind Of properly, OF from any
profession, trade, employment or vocation,
carried on in the United States or else
Where, or from any other source whAteV
tr, il such apnual income exceeds eight
hundred dollars, a tax Of three per cent.
on the amount Of such excess OI such in.
come above eight hundred dollars"
This provision was broad enough in
words to cover everything looming in"
which is the literal meaning though not
kt,TihDIs-5 mir 49, 49, ~--,.-s.cs: A.: 80 ~
StxH6,ng 6t mankind, which mikes it 81.
hOnymOus with gains and profits. ut
gave place, IN the present aw, to two
provisions. The first imposes tax upon
The salaries or payments Of PERSONS EN-
pl0yoa in the service If the United States,
whether civil, military or naval. upon ali
over $500 per annum. Of three per cent,
and makes provisions for deducting the
same from the payments when made to
them.
The second provides as follows:
THAT there shall be levied, collected
and paid annually upon annual gains,
profits Or income Of every person residing
iN the United States, whether derived
from any kind Of property, rents, inter
eStx, dividends, salaries, or from any pro-
feSSiOn, trade, employment or vocation,
carried on in the Tilted States or else
where, Or from any other source Whatev-
er, except as hereinafter mentioned, If
such gains. profits Or income exceed the
sum Of six hundred dollars, and lu nut
exceed the SUN Of ten Thousand dnllarS,
. duty Of three per centum on the amount
Of such annual gains, profits or in"Ome
over and above the said SUN Of six hun
dred dollars"
II then provides tax Of five per cent.
where the income exceed ten Thousand
dollars, or is derived from property, Sc
cuTitieS or stocks owned IN the L tied
States by citizens residing abroad. 1t Is
,l..1 hAR in in
nual gains, profits or income subject to
duty. rs provided in this act Of three per
centum or five per crntnu, all thci na
tional, State or local taxes lawfully ASSESS
ed upon the pro, ,erty or other sources III
income Of any person SD aforesaid, from
which gains, profits or income l. or >h"uih
he derived. shall first hr deducted from
the gains, profits or income" of lre pcr>on
paying the same.
As they stand in this act. what do the
words gains, profits "r lnc"mc mean
Gain" l. opposed I" ''ln>>, and III AIS
overpluS IN cnmiu,atiIn, nni Is said Oy
Bowler in his law titctionarl 10 he y.
nonymnuS with profits. Til, Is It> usual
meaning Profits Is the amount oh.
tanned on sale after lrduc.in- the cost OF
purchasing or production thr SUI Plus
" hich remains att Was and ret L at
paid. Webster SAYS: " Iue ir '.it- ii Il
farmer AMI manufacturer j. the gam 'na'ic
hy the sale .! prp.!Hcc uT ma uiI.t ire,
after drluc:ing the va.uG II t.t ithor,
materials, and all expenses, 49, t''er with
the interest ON a." cai.'n, .r'.! 80,
whether land, machinery, hu.''i.u-,, Ia
i =
trS>inr, it w"ud he tAe -tue> receipts
afer drdurtinG the necessary cNpeh>c> OF
obtaining them.
Income" has two Specifications; the
-Onc literal, what st II, ; in, the other III"
popular ar general. the pr, ti'> al tac
nvSrpIuS after drIucting TIE "ntI"c> e.
c>Sary to pr"iutc such g'n>> inconc.
Worcester SAYS that II is that g1iu
: which proceeds from Labor, hn>inc>- If
any kind the prniucc IT farm; the
rent df houses TIE prncrr'ls If I'r"i,>
Sionai business the profits Of commerce
or q occupation the interest OH mercy
or stocks" Bnuvivt says it l> = the
gains which pr"c-rti frrm property, in''"r
or business" Judge Bron>ou in th- Gas"
ufThe people ". tle Sup rvI>"r "f Nj
agra q HilD says: lit is undoubtedly
true that profits ami 'inc"'ne>' az
sometimes used as Synonymous terms ;
ut strictly speaking incrue mran>
that which comes in or is received FROM
any business of capital without reference
TO khe outgoing expenditures; While
profits generally IN ans the gain which
is made ON any business or Investment,
when both receipts AMI payments are
taken into the count" Rurrill's Law
Dictionary adopts this d. cision in its
definition.
From these quotations it will he seen
that although strictly and literally in
come NAV mean all that "come> in, its
general Specification is the same as gain
and profits" Each Of the words gain,
profits and income" must be given soIEe
mea0ing. The two former were intro
duced into the new law f'r some purpose.
1t was clearly to aid in giving a meaning
TO the word income, which must be >y
nonymous with "gains and profits, or
the latter are in law without rational
purpose, because, in the strict literal
sense, income means gains and profits,
and far more Gains and profits have too
clear q I0esnipp in b. DE .1hi~;. n 2''r:''
ton. According to the common under
standing, income means the same thing.
Using this Word as synonymous with
gains and profits" shows that Congress
50 understood it. Where the income Is
derived from State stocks, as in Penn>!vl-
vania, and the State tax is deducted from
the dividend before it is paid over. the
amount actually received from the State
is considered the income. Where the in
come is derived from rents, the necessary
taxes and repairs are deducted to arrive
,atit. Where It aecrues from farming "r
manufacturing, the outgoes are first de-
Quoted. Where it arises from prof -
;fional labor, Office rent and oth'r ex-
spenses, and necessary travelling expenses,