The Portland daily press., 1868-09-01
Taxation Of United State. Bond.


Of the practical effect Of taxing U. s. Bonds:
Mr.. ID. owns houses, stores, farms or goods
or other property valued at twenty thousand
dollars, on which he is taxed two and half
per cent, amounting to five hundred dollars.
Mr.. Z. owns twenty thousand dollars in Unit
cd States bonds, having six per cent. interest,
payable in gold, and with the premium on
gold would be equal TO eight per cent. in cur
rency, the income amounting to sixteen hun
dred dollars, and the income tax on this
amount at five per cent is eight dollars, but as
incomes to the extent CT one Thousand dollars
are exempted from taxation, IL leaves only six
hundred dollars of Mr.. Els income 10 tax at
hve per cent, giving thirty dollars tax to pay
70 the bondholder owning twenty thousand
dollars, but il equal taxation was adopted, Mr..
E. would pay tax of five hundred dollars ON
his twenty thousand dollars of United States
bonds instead of thirty dollars income tax.
The author Of the paragraph quoted. falls
into the common error Of supposing these Bonds
car be taxed by the States and towns. 1t is
quite true that our local taxes have swelled
from one per cent, or less, to two and half
per cent, or more, since these heavy war ex-
penses have been entailed upon us, and that
any measures pointing to relief in this respect
ere readily seized upon, and indeed ought, if
possible, to be adopted at once. A citizen
having property, large or small, yielding an
income of six per cent, has to pay about one
halt of it for his taxes. No wonder the heart
of the most patriotic feels twinges of rebel
lion working within it, when it finds itselfsub
jecred to such burdens. The direct taxes of
the general government are small, and with
the exception of the income taxi are hardly
felt. So the indirect taxes of the Union, by
way of tariffs, licenses &C., are paid in part by
the producer and in part by the consumer
and even doubtless sometimes wholly by the
producer, and do not bear upon us so heavily.
1t is these local taxes that try our patience
and patriotism and from which the people are
crying to be relieved.
Now, what we want to say is, that the United
States bonds cannot, in any euert be taxed By the
cities and to,ons. Aside from the provisions
in the various acts of Congress authorizing
the leans, exempting the bonds from taxation,
the Supreme Court of the United States long
ago determined, that "a tax imposed by law
of any State, or under the authority of such
Law, on stock issued for loans made to the
United States, is unconstitutional" We quote
from the case of Weston ". Charleston, 2
Peters Reports, page 449: And the exemp-
ton from local taxation contained in the acts
the decision of the highest court of the coun-
try ofcourse Congress in making new loans
may make them on such conditions as they
see'ht. But the exemptions made in statutes
already passed, under which the loans have
been contracted, cannot be repealed without
such downright reputation as is not to he
thought Of The language of the act of March
., 1865, for instance, land it is but transcript
In this respect of the other acts pending for
loans to the government,) is as follows: "And
all bonds or other obligations issued under
this act shall be exempt from taxation by or
under state or municipal authority"
The income of these banks is already taxed
by the United States as they tax other in
comes. No law of Mede or Persian was ever
more fixed and Interchangeable than this which
declares that the cities and to,ons cannot tex
their bonds in any manner or to any extent.
Now all the money received by the United
states from taxing their bonds will after all
Dc mere drop in the bucket Whatever NAV
De paid by the bond holders will onlv 90 tn
swell the great ocean of funds OF the general
government, and will add to them az ono .,
our Northern rivers adds to the great sea tbat
washes our borders. Besides the bonds arc
mostly held by northern men, while the mon.
ey received from taxing them will be applied
10 the oeneht of the whole country 1t is in
effect imposing burden on as at the North
for the use of the West whose people hold
small amounts of them and the rebel South
who hold none of them. ..
The refrain of all the Democratic stump Or
ators is, taxation! taxation |! taxation!!! Wby
we have to be taxed at all? Who and what
caused the war? Why it takes money to scar
ny on peace" as it did to carry on the war?
now is it that we carried on the war by Dor
rowing and now in, time of peace are called
upon 10 pay the debt we contracted during
'ne war; All these are questions we are not
considering What we insist upon and what
We want to have understood is. that these
bonds air 'ady issued, under acts Of Conarss0
expressly exempting them from tax.t;on ~
the local authorities, cannot be taxed md,
existing laws, and that it is not in Ithe nower
ofcoHgress to pass any law under which thew
may be so taxed