The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1893-11-26
TIE TAN ON INCD L

In the Washington Post Mr.. Harry Ii,
Smith, former journal clerk of tho house
Of representatives, gives an interesting
resume of the history Of the first income
tax imposed by congress. This was in
1861. As it passed the house the act
provided for a tax of five per cent. on
incomes in excess of 1000, but this was
amended by the senate so as to reduce
the exemption to $500, and the tax was
fixed at three per cent. In this form
the bill was passed. Prior to 1864 the
act was hardly in full operation and in
that year the sum collected from this
source was S15,O00,G00. In the winter
Of 1865 the tax on incomes under 5000
was increased from three per cent. to
five per cent: incomes above $1,000 be-
ing taxed five per cent. The amount Of
tax collected for the fiscal year 1865
was S21, 000. 1000. The close of the war
brought IA period of speculation and
prosperity, and the income tax for the
ensuing year was u little over 100000
For the following year 1867 it was
S57, 100000. In the latter year the law
was amended SO as to tax all incomes in
excess of $1,000 at five per cent. This
reduced the revenues to S32, 100000 in
1868 and thereafter until the repeal of
the law the revenues from this source
was from So, 100000 to $780, 900.
There was more or less agitation in
favor of the repeal Of this tax during the
entire period Of its existence although it
is fair to say the opposition came from
those who paid the heavy taxes. No
doubt, too, the tax was excessive and
might we'll have been made less burden
some. Special Commissioner David A.
Wells, in his report on the revenue sys-
tenn for the year 1869, sat forth the fact
that an income tax Of five per cent. was
greater than had ever been imposed by
any other nation, except in time of war
or in extraordinary national exigencies.
He recommended the reduction of the
tax from five per cent. to three per
cent. on ali incomes over $1,000.
In meeting the proposition then seri-
ously advocated in many quarters, that
the income tax should be wholly re-
moved, MI. Wells called the attention
of the country to the fact that the tax
was paid during 1868 by only 100000
persons out Of the entire population Of
almost 100000, and yet that the re-
turns Of these persons represented an
aggregate income of not less than $780,
100000. Even allowing for the families
Of these 10000 contributors, it is evil
dent that only about a million of the
population were interested in having the
tax repealed, while the remaining 80
100000 out Of 100000 Of people in the
United States were interested in having
it maintained.
The tax on incomes which congress
may now be recommended to impose will
be much lighter than the old war tax.
According to the press dispatches yes
terday the ways and means committee
will advise a small tax on legacies, on
the Incomes of large G. operations and
on property owned or controlled by
aliens, and will require the stamping of
certain documents and special licenses
for certain classes Of business, although
it is no yet certain that any of these
features will be retained in the bill.
Students Of the problem Of taxation,
however, are confident in the belief that
small tax on incomes could be operated
as successfully as in England. A table
compiled by Librarian Spofford shows
that the entire revenue derived from the
income tax from 1868 to 1873, was s34C.-
9Gl,3GG. Mr.. Spofford also shows that
about ono-third of the revenues of Great
Britain from 1868 to 1873 were derived
from an income tax. This tax amounts
70 six pence per pound on incomes of
from 100 to $50 pounds, and nine pence
per pound on Incomes above $50 pounds
per year.