The sun. [volume] (New York [N.Y.]) 1833-1916, 1894-05-08
How the Vest Amendments Leave the
Income Tax.

No human being is able TO understand ex-
actly how the income-tax sections OF the
Tarin bill would work In practice u they
should be enacted In the form in which they
went from the House to the Senate. AZ We
showed months ngo the one thing clear is
that part Of the unjust burden would fall
upon those least able to bear It, Small in
vestors In corporation shares or bonds. Wild
ows and orphans even. whose only income.
slender as IL might be- was derived from
such Investments. would pay the tax with
out regard to the 5000 limit. For. az the
bill t. drawn. the officers Of such corpora
tlons are require to withhold from their
stoc.. holders or bondhulders the amount Of
tax on the total Of dividend or OF interest.
and to- turn the same over to the Govern
ment. Thus the tax is collected by the cor
poration itself on all interest or dividends.
and small holders and large pay alike.
There is provision which protects the
person whose income Is over $4,000 from
paying twice on the same items Of revenue.
That is to say. II the corporation has with
held from him and paid for him to the Gov
erntneLt his share OF the tax. he is not
obliged to estimate as taxable in his indi-
vidual income the interest or dividends
alOm tAb oh NiiCh bio l"O pSt
cent. has already been deducted and paid
TO the Government by the corpora ton itself.
but there is no provision whatever. in any
part Of the bill as it passed the House. for
the repayment OF their share Of the tax. thus
collected, " those stockholders or bondhold-
ers whose individual INCOMES fall within the
$4,000 limit and are therefore not taxable.
Tho corporation does not. and cannot, in
Quro whether tho persons income from
other sources puts him over the 1900 limit
1t has nothing to do with any part OF that
persons income except as derived from
itself. Suppose widow has $4,000 invested
In bonds which yield her $500 year. and
that this $500 Is her sole income from any
source. The corporation In which her little
all ie invested pays the two per cent. tax on
the widows $500. and deducts the same be-
fore she gets her money. She never gets It
back again. Her income Of $500 has been
taxed along with the mlllionaire's. She
falls far within the $4,000 limit. but she Is
taxed Just the same.
On Friday OF last week Senator VEST in
troduced from the Committee on Finance o
large number OF amendments intended to
remedy the technical defects Of the income
tax sections Of the Tariff bill. One Of these
amendments. that which changes the Ian
guage Of section IS. appears to be designed
to make still clearer the exemption of the
rich investor In corporation securities from
the necessity Of paying the two per cent
tax twice over upon his receipts from the
corporation In which he holds stock or
bonds. But there is absolutely nothing In
any OF the amendments. so far as their
character has been indicated In the press
dispatches. to remove the most obvious
technical objection to the scheme. namely.
that while protesting to tax these In
comes which are over $4,000. 1t really
levies tribute upon all incomes. no matter
how small. which are derived from cor
porate investments. The widow and the
orphan and tho beneficiary of the trust
fund will all be compelled to pay out Of
their scanty resources. in order that Social
ism may get In its entering wedge
Considered broadly. the income-tax
scheme which Mr.. CLEVELAND is pushing
at the behest of the Socialists and the Sec
tionalists. Is an abominable device to rob
the few for the benefit OF the many. Con-
sidered infinitely and in its technical
aspects. It Ii one OF the most amazingly
muddled and stupidity inchoate pieces Of
legislative workmanship produced at Wash
ington for many years.
PUT IL through. no matter what IL Is :"
10 the word from the White House. Rush
It through we must!" Ia the piping cry
from all cuckoodom.