The Placer herald., 1862-11-08
[From the National Intelligencer.1
The Income Tax.

tax upon incomes is the subject of deep
interest and frequent inquiry. The laws
passed between 1892 and 1900, and between
1918 and 1915, imposing internal duties
and excises, throw no light upon this sub
ject, because neither applied to incomes.
The first law imposing a tax upon incomes
was passed on the 5th of August, 1861, and
was repealed July lst, 1862 It's provisions
were essentially different from the present
law, and it was in terms tax upon annual
incomes 1t provided:
THAT from and after the first day of Jan
uary next there shall be levied, collected and
paid, upon the annual income of every per
son residing in the United States, whether
such income is derived from any kind of
property, or from any profession, trade en-
ployment or vocation, carried on in the
! United States or elsewhere, or from any
other source whatever if such annual income
exceeds eight hundred dollars, tax Of three
er cent. on the amount of such excess of
such income above eight hundred dollars"
This provision was broad enough in words
to cover everything Coming in," which is
the literal meaning, though not attributed to
1t by the common understanding Of man
kind, which makes it synonymous with gains
and profits. 1t gave place, in the present
law to two provisions. The first imposes
tax upon the salaries or pNymnets Of per
sonsempIoyed in the service Of the United
States, whether civil, military or naval, upon
all over 5000 per annum, of three per cent,
and makes provisions for deducting the same
from the same 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 Uni
ted States, whether derived from any kind Of
property rents, interests dividends, salaries,
or from any profession trade, employment or
vocation, carried on in the United States or
elsewhere, 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 do not exceed the
sum of ten thousand dollars, a duty of three
per centum on the amount of such annual
gains profits or income over and above the
said sum Of six hundred dollars"
1t then provides tax Of five per cent
where the income exceed ten thousand dol
lars, or is derived from property, securities
or stocks owned in the United States bv
citezens residing abroad. 1t is further pro
vided that in 'estimating annual gains, profits
or income subject to duty, as provided in
this act OF three per centum or five per cen'
tum, all other national, State or local taxes
lawfully assessed upon the property or other
sources Of income of any person so afore
said, from which gains, profits or income is
or should be derived, shall first be deducted
from the gains, profits or income" of the
person paying the same.
AS they stand IN this act, what do the
words gains, profits or income" mean'
Gain" is opposed to ''loss" and means
overplus in computation, and is said by Bon
vier in his law dictionary to be synonymous
with profits. This is its usual meaning.
"Pro6ls" is the amount obtained on sale
after deducting the cost of purchasing or
production; the surplus which remains after
rents and wages are paid. Webster SAYS:
"Ihe profits of a farmer or manufacturer is
the gain made by the sale Of produce or
manufactures, after deducting the value of
the labor materials, and all expenses, togeth
er win the interest ON the capital employ ed,
whether land machinery, buildings invest,
ments or money" In case of a profession,
it would be the gross receipts after deduct
ing the necessary expenses of obtaining
them.
"lncome" has two Specifications; the one
literal, what "comes in" and the other the
popular or general the profits of the over
plus after deductng the outgoes necessary
to produce such gross income. Worcester
says that it is 'lbat gain which proceeds
from labor, business of any kind; the pro,
I l., ,f A.,
of houses; the proceeds Of professional bnsi
ness; the profits of commerce or of occupa
ton; the interest on moneys or stocks"
Bouvies says it is "the gains which pro cede
property labor or business" Judge Bronson
in the case of The people VS.. the Superv-
sors of Niagra "a HilD says: at is undoubtl
edly true that profits and incomes are
sometimes used as synonymous terms but
strictly speaking income means that which
comes in, or is received from any business
of capital without reference to the outgoing
expenditures; while profits generally means
the gain which is made in any business or
investment when both receips and payments
are taken into account" Burrill's Law
Dictionary adopts this decision as its defn,
ton.
From these quotations it will be seen that,
although strictly and literally income may
mean all that "comes in" its general signfi-
cation is the same as gain and profits. >
Each of the words gain, profits and income"
must be given some meaning. The two for
mer were introduced into the new law for
some purpose. 1t was clearly to aid in givl
ing meaning to the word income, which
must be Synonymous with "gains and prof
it's" or the latter are in law without ration
al purpose, because, in the strict literal
sense, income means gains and profits, and
far more. Gains and profits have too clear
meaning to be subject of question. Ac
cording to the common understanding, in
come means the same thing. Using this
word as synonymous with gains and profits"