The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1893-12-15
Difficulties Of an Income Tax.
v.om uorper's weekly.

rect taxes 1t is dated February az,
,-os. He said there was no antece-
dent rule or opinion or principle by
which to classify "direct taxes The
classification must therefore be, he
said by IA species of arbitration" and
he classified the "direct taxes OF the
Constitution thus:
81. Capitation, or poll taxes.
"s. Taxes on lands and buildings.
90. General assessments, whether on
the whole property Of individuals, or
on their whole real or personal estate"
The third and last item is in effect
the general property tax" As PITTS
income tax was not imposed till three
years afterward, Hamilton could not
have had it in mind. The test of con
sumption or expense catching the
citizen when he is expending-appled
by the Supreme Court in the "Car-
rage" case, would probably be un-
workable to-day by Congress.
No more satisfactory is the modern
test suggested by John Stuart Mill,
and now adopted so generally by
economists, namely, that 'indirect
taxes are those demanded from one
person in the expectation and inten-
non that he shall indemnify himself at
the expense of another, and that all
other taxes are direct The diff
Guilty lawyer has with that test grows
out of the possible position of the tax
payer, and of possible private bargains
relating to payment of the tax. Even
when tax is so indirect as is Gus
toms tax, the same person may be the
first and the final payer it. No "di-
rect tax" can be levied which may not
affect personally others than the payer.
Congress is not likely to consent to
make tax valid or invalid according
to its actual incident in a particular
case ascertained after the enactment.
There must be a more tangible divid-
ing line than that between direct and
indirect taxes.
No accurate and ascertainable classi-
hcation existed In England between
NuCCt anu ihNilCIl tdACo at NiiS Shu VI
the last century, and the absence
there and here, then and now, is due,
no doubt, to the wisdom of those who
felt the difficulty of explicitly distin-
gushing direct from indirect taxation,
and prescribing a rule for the future.
1t may be that Congress can over
come and remove in a new income
tax the difficulties displayed in the
execution Of the last one, some start
ling inequalities of which were report
ed at the time to be these:
In the fiscal year 1860 the tota'
amount of income tax paid in the
United States was $34,aso,S955s,
and of that sum seven States-Massa.
chusctts, New York, New Jersey, Penn
sylvania, Ohio, Illinois, and Californla
-S25.S9s,5o7.S7, or a little more
than three-fourths. But those State:
embraced only forty per cent. of the
population of the Union, and by the
census of 1869 the value OF all the reaI
and personal property in those sever
States was only $6,SI6,6so,4o9, or
little more than forty per cent. of the
aggregate wealth Of the Union.
The income tax must have been as
sessed according to the conscience o
the taxpayer
The Congressional districts were, II
1860, 233 in number, and arranged SC
as to be nearly as possible equal il
population yet out of the whole %;
there were six that paid $S, 2SI, ,43I IS
or very nearly one-fourth Of the whole
tax. Seventeen of them, selected
from the States of Massachusetts
Rhode Island, New York, New Jersey
Pennsylvania, Maryland, Ohio, Illinois
Missouri, and California, paid SIT,
o66,277 OF, or, as nearly as possible
one-half of the tax Mr.. Astor palC
more than the whole State of Yer
mont, and Mr.. A. T. Stewart pai(
more than the aggregate amount paiC
by Florida, Arizona, Colorado, Dako
ia, Washington, New Mexico, Utah
Idaho, and Montana.
1t is possible that a conspiracy o
States, by fixing an exemption from
an income tax up to sum so large a
to generally preclude the tax in thos
conspiring States and then by imposing
forty-per-cent, tax on all income
above that sum, could do great In
justice. In case of such conspiracy
command in the Constitution tina
when the Federal government seek
revenue by tax on income 1t mus
first declare the sum in the law, an
then distribute the sum among tn
States according to their number: