Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-11-30
RAISING REVENUE.
An Income Tax Shown to Be Not
the Thing Now.
Ii WOULD NOT BE AVAILABLE
To Meet an Emergency Which
is Now Present.
a STMPT q DIAN DDODnCEn
1T WOULD NOT BE AVAILABLE
A SIMPLE PLAN PROPOSED.

an issue of bonds. The financial problem
before Congress so far as 1t relates to the
raising OF internal taxes" he said, lis an
urgent one. There is assurance of a de-
ficiency during the present fiscal year,
which must be met before the LIST of July
either by raising revenue or using the
credit of the government for the issue of
bOrds. The fundamental difficulty with the
proposition to meet this exigency by the
imposition of an ircome tax of any sort
is that the tax would necessarily fall upon
future incomes and would yield nothing
during the fiscal year 1894 and would not.
in fact. be readily colIectable until near
the close of the fiscal year 1895.
Expense to Collect an Income Tax.
Meanwhile much expense would have
to be incurred through the appoir tment and
fitting out Of a very large number of new
officials and the preparation of costly and
elaborate blanks needed for the assessment
of an income tax. The official corps would
have to be large enough to cover the whole
country and investigate not only the affairs
of those whose incomes would be beyond
the taxable limit, but all other incomes
also.
''All this outlay would have to be made and
everybodys business and personal affairs
pried into with a view to receipts the first
of which could not reach the treasury for
at least fifteen to eighteen months from
this time Meanwhile the emergency for
which the increased internal taxation is
required will have passed away. II the
democratic theory Of revenue tariff be not
radically wrong, within a year from the
taking effect Of the new system the govern
ment receipts from customs will be ample
II not redundant. and there will be no cur
rent deficiency to supply. The income tax
proposition Is therefore necessarily one to
defer the raising of larger revenues until a
time when we will not need them. 1t is to
be assumed that Congress would not think
OF putting tax upon incomes already
earned and spent Even IL Ii We're consti-
tutiOnal no legislation could be more unfair
than this For example. 1t would be cruel
hardship to expect a man who having an
income OF 5000 had regulated his affairs
accordingly and disposed of the whole Of 1t
TO mortgage his future by borrowing 500 to
pay the debt imposed by such ex post facto
Iesislation Were the passage of such a
statute possible the Supreme Court of the
United states would make short work of it.
A Demagogical Idea.
The fundamental objection above set
forth applies not only to the general in
come tax upon all unofficial revenues or
earnings larger than a fixed sum, but also
to all other income tax propositions. such as
the one for taxing the incomes of all cor
porations- This idea is demagogical and
founded in ignorance, however eminent the
reputation of it's proposers may be. The
corporation is no longer the manager of
very large enterprises merely. Many lines
or business are conducted by corporations
as limited liability companies or otherwise
Inc old-fashioned copartnership Of Smith
q BroWn mas given way to the business or
SaniZatiOn known the Smith & Brown
Manufacturing Company or trading com
Pany. Comparatively few of the old-style
nrms are now conducting a large business
ne majority OF extensive establishments
nave. for reasons satisfactory to them
taken advantage of the DEVELOPMENT of the
corporate principle in business affairs and
turned their establishments into Joint stock
companies. IL Mr.. Sherman of Brooklyn
and his allies do not intend to tag these
business and Industrial or trading COM
pahieS where are they to draw the line7
~ Is said that they can easily tax only the
PuoLc corporations, such as railroad and
insurance companies. To do this they would
nave 10 create an artificial distinction for
NV le "n0le United States upon different lines
from those existing In the several states
whose corporation laws vary
What Are Taxable Corporatfon..
1t would be well nigh impossible to de-
me what was and what was not a taxable
corporation under the federal statutes II
only transportation and guarantee associa-
lions were to be mulcted their earnings
would be harder to grasp than a will-o'-the-
Wlsp. The railway company would return
no pronts at all or very light ones while
the industrial construction company engag-
ca IN building the road or equipping it with
apparatus and supplies would absorb all
the prohts Again the difficulty of assess
ment would be very great from another
cause. There are a great manv cornoro
lions organized under the laws OF one
state and doing business in another This
- N SoSaoIy Jne case as between the states
OF New York and New Jersey A majority
or the corpora tions recently Organized for
business within the state of New yorl
nave been formed in New Jersey in order
avoid rrain favo
capital imposed by the laws of New Yori-
The legal domicile of these Commando ts
New Jersey yet they have nothing there
10 20 pay laNes on. their property being in
throughout that state. and. in fact much
OF 1t in the shape of rolling stock or other
wise IN other states than the one of their
legal domicile or their actual business Not
even on this plan OF CORPORATION taxation
would the labOrs and expense of assessment
De IN fair proportion to results obtained.
corporations, even under state laws are
notorious for evading tax obligations In
This respect especially Is il true of them
that corporations have no souls" Whether
the income tax was general or special there
would be no longer any sentiment of pa-
trsotisms or desire for business advertising
to induce the making OF full returns
an Income Tax Would BE Sworn Down
The income tax would be sworn down as
personal taxes VIGOROUSLY are. Nor would
this always or generally be dishonesty
DONE In times like these an individual
man or corporation composed of a number
OF business Elen is justified in carrying an
ample reserve fund from profits for contin-
gencies. II they, for example. could fairly
compute from last years comparative pros
perlty the results to an undertaking con-
thued through this year. and much of this
year losses are necessarily in failure to
collect hnally upon transactions and deemed
hlShiy profitable when last years business
Is written up on firm or corporate books
An income tax would be sure to yield less
revenue than could likely be expected from
II, Wnile the expenses OF collecting IL would
ne disproportlonately large to the receipts
and the annoyance, Notifications and Iiti-
cations growing out OF II would be enormous
in extent.
AT the end of year this resort IN nm
extreme war tax measure in time of Dro
1ound peace would turn out TO be the most
unpopular tax ever adopted in the conn
NY France has just refused to adopt the in
qutsitorlal income tax project But to re-
yert-the fatal objection to any sort of an
income tax proposition is that q does NOT
meet the requirements of the treasury and
cannot until too late TO be of use
One simple Way
VI the income tax proposition he rejected
row Is the government to get the money
Il must have by any plan of taxation?
or. must we take up with the republican
plan OF increasing the bonded debt of the