Evening star. [volume] (Washington, D.C.) 1854-1972, 1870-11-28

nave been oeGgDeo BY Congress.
It 10 belle we'd 70 have been the intention TO re-
tain all the taxes imposed upon sales OF dis titled
epirits, wines, and malt liquors, by the at or
July 20, ICES, and acts amendatory thereof
Section 2 or the act OF July IA. 1870, neverthe-
less repeats the tax upon Gales Of nal. iiguers.
1t was evidently the purpose or section 70
empower collectors TO remit, NJ any time prior
struments unstamped, unless the omission Of
stamps was with fraudulent in.ent; but owing
to q change made in the bill rs reported by the
senate Finance Committee, the letter OF the Law
is such Is TO postpone until August 1871, the re-
liefwhich was designated 10 be immediate.
Section IL provides that sections 10, III, and
- OF the act Of June 60, 1851 as amended shall
toned to August I, 1870, and no longer.
Section 10 provides THAT there shall be levied
and collected, for and during the year 1871, a
tax OF two and half per centum on the amount
OF all interest or coupons paid or bonds or other
evidences or debt issued and payable in one or
more years after date by any of the corporations
amount OF all dividends Of earnings, income, or
gains hereinafter declared, by any bank, trust
company, savings institation, insurance COM
pike company, canal navigation company, and
sisckwater company, whever and wherever the
same shall be payable, and to Whatsoever per-
con the same may be due, including non-resi-
dents, whether citizens or aliens"
IL IS believed to have been the intention to
continue the hye per cent. tax until August !,
1870, and TO substitute q tax Of two halt per
owing to the peculiar language Of the statute,
no tax can be withheld from coupons falling due
during the last i've calendar months Of 1870
According to a recent decision OF the Circuit
Court in the State Of Pennsylvani in the case
OF the Philadelphia and Reading Railroad Com
paDy W. Barnes, collector, no tax can be with
held from dividends, coupons, or interest, paw
able during the first seven months of 1870; and
il is further maintained that corporations can
not be required TO pay any taxes upon the divi-
dends payable during tue remaing 1--WE months
The right to withhold a tax from the salaries
OF persons in the civil, military, or naval ser
vice OF the United States during the first seven
months OF $780, turns also upon the points in
yOlved in the case above named.
The amount OF TAI indirectly involved in this
question is very little less than six millions of
dollars. II is OF such Importance that the Com
missioner has not felt at liberty to acquiesce in
the decision of the circuit court until IL shall
have been affirmed by the court OF last resort.
opinion OF the Supreme Court of the United
States pronounced upon the questions in issue.
As early as january, 1870, lie called the atten-
ton OF Congress, through its appropriate COM
mittee, 10 the antiquities of the law then in
force, and the difficulties likely to arise in the
collection OF these taxes, and asked for legisla
ton upon the subject. The legislation was
finally enacted July l1th, but has been declared
by the circuit court Of Pennsylvania TO have
been too late to serve the purpose desired.
IL is provided in section 10, that 50 when any
dividend is made or interest is paid, which in
cludes any part OF the surplus or contingent
fund of any corporation which has been as
sessed and the tax paid thereon, or which in
cludes any part OF the dividends, interest, or
coupons received from other corporations whose
officers are authorized by law to withhold per
centum on the same, the amount Of tar so paid
on that portion Of the surplus or contingent
fund, and the amount Of tar which has been
withheld and paid on dividends, interest, or
coupons so received, may be deducted from the
tax on such dividend or interest
Owing 10 change in the rate OF taxation from
hve per cent to two and one-balf per cent,
taxes properly paid upon surplus prior to August
l may now be again Appropriated 10 the pay
ment OF taxes upon earnings since that date.
For example: A dividend OF s25,6il03 is de-
ciared ON or after August J, 1870, Included ia
this dividend. however, and constituting a part
OF IL, are S1j,eil.g3, taken from q fund from
which prior 10 August there was paid, as then
required by law. tax of five per cent. A tar
on two and one-half per cent. upon the entire
dividend IL o3 the tax OF i've per cent. paid
upon the surplus Is 81 81 %. The law allows the
tax pad upon the surplus to he deducted from
the tax assessed upon the dividend. In the ex-
ample. the former exceeds the latter, and con
sequently earnings since August I. to the
amount of so 600 escape taNation entirely II
would have resulted differently il the law hal
provided for a deduction OF taxed surplus from
dividends instead of deduction Of tax from
tax.
Public resolution No. 75, approved july r..
1870, reviewed insurance companies from Ger
tain taxes, but All act passed the next day re-
stored them III language so plain a., in my iudg
Inent, to operate ~ repeal OF the resolution.
The repeal OF the tax upon receipts for mODey
includes. practically, repeal of the tax upon
demand and sight drafts, bank checks, &c. A
person who has money on deposit, instead CT
drawing by check receives the money and gives
his receipt, which is retained by the bark as a
voucher. This practice is increasing. and seems
likely 10 become general. While il IS an eva
sion Of taxes il is one for which the present law
provides no remedy.
The repeal of the special tax upon apotheca-
ries takes effect May |, ISL. After that time
they must either abandon the dispensing and
sale of wines and spirits ORIGINAL upon ply
siciaEs prescriptions or otherwise, paw special
taxes as liquor dealers, unless there shall be ad-
ditiOnal legislation on the subject So far a.
they are concerned the act of July II, 1870 in
creases the taxes.
The defects mentioned are but a part of those
already discovered, and are probably but a
small part of those which will eventually be
found 20 eHist- Some of them this ice has At
tempted TO reconcile and avoid by construc lion.
How far this construction will be sanctioned by
the courts remains TO be seen.
UNITED STATES DIRECT TAX.
By act OF Congress approved August ., 1851.
direct tax Of 81, 900 COO per annum was appoF-
toned TO all of the then existing States and
Territories, and the District Of Columbia. OF
this tax S2COl e2. remains unsettled in the late
discretionary States.
In Virginia. South Carolina. Florida. Arksn-
sas and Tennessee, lands were sold for the nou-
payment OF taxes charged against them.
1t may be deemed important that Congress
should make provision for the final disposition
OF all the lands which have been acquired and
are now owned by the United States, under the
drect-tsX laws, at an early day. And also, that
in the adjustment of the nncollected portion OF
the direct taxes in the late insurrectionary
States, different system from that provided
in the act Of June !, 1852, should be devised.
SEIZURES.
The seizures of property for frauds for the
year ending 81 ne 80, 1870, amounted 20 the
value of IS ,39e, S1l. 1t is recommended that
section IS OF the act Of July 10, 1896, be 80
anne nded as TO make its provisions applicable to
property forfeited under any Of the internal
revenue laws. The limit in value OF the prop
eTty seized sh0uld be extended from $500 70
$500. and the expresses OF seizure and custody
should be provided for as well as those OF APP
praisement and sale. As the law now stands
the section is nearly useless.
Estimate Of the ANIMAL receipts an each State and
Territory from internal taration otter he act
Of July IA, 1870, shall be ~ full force.
State and Ter. Amount, State and Ter. Amount
New York. SD, s63, cool NewHampshireS23 2 900
Ohio. IL, 062. 000l Minnesota ......22s0ao
Illinois .......5 1853 ,000i Alabama. 220,0e0
Pennsylvania SOC, 000l Dist.of Columbia2isO 900
Kentucky .....s, .09, 000i Texas. ..........TiOO
Virginia. 969, 000 South Carolua. ii9 900
Missouri. iS2. 000i Kansas ........ l55 600
Massachusetts u IA, 600 Oregon. 139 400
Indiana .......4 0S 00l MisSiesip .122 600