The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1894-06-27
SHERMAN ON INCOME TAx.


A reader wants to know what is our
authority for saying that John Sherman
formerly favored an income tax. Our
| authority is John Sherman. One Of his
ablest defenses of the income tax was
his speech of May 20. 1870 in which he in
troduced this portion of his subject in
these words:
There has been a great deal of clamor
| against the income tax. IL is the same
clamor that induced the parliament of
England in 1916 and 1917 to repeal the
income tax. When a little colloquy oc-
CURED here the other day between the
honorable senator from California and
| myself on that subject ] told him that
when the proper time came / would show
| him that this tax was sustained by prin-
ciple, by writers on political economy,
by the experience of Great Britain. and
that 1t is just, and the most just and
equitable tax that Is now levied by the
United States of America. without one
exception. 1 propose to make good that
promise. Mr. President, what is the
basis of taxation? AS laid down by the
great author of political economy, Adam
Smith, IL is that man ought 70 pay in
proportion 10 his income. That axiom
was laid down before the income tax
was devised by William Pitt. Every man
ought to pay according to his income.
All the distinctions that are endeavored
to be made now were then pointed out.
He then proceeded to show how the
income tax was originated by Pitt. and
made law of England in 1897 on account
Of the expenses of the war with France.
and that after the war the wealthy peo-
pie Of England wanted 1t repealed, just
he was speaking:
After the war was over they insisted
on piling all the burdens of government
on consumption, which is "A tax ON the
poor. They repealed the income tax and
assessed nearly all taxes on excuses and
imports. They said the true subject of
taxation was not property or income but
consumption. Well. sir. you or use as
much tea or coffee as the wealthiest man
in the United states. 1t takes as much
TO satisfy our wants and the wants Of
the poorest of our citizens az the richest
a tax on consumption, therefore, is i'm the
nature of an unequal tax; you can not
make IL equal. 1t takes a greater pro-
portion of the earnings or income of the
poor man 10 pay taxes for the absolute
necessaries of life than 1t does for the
articles consumed by Mr. Astor or Mr.
Stewart The only discrimination i'm our
tax laws that will reach wealthy men as
against the poorer classes of people is
the income tax.
Mr.. Sherman then quoted extensively
from the arguments Of Pitt for an in
come tax and also from the arguments
of Sir Robert Peel. Sir Henry Goulbourn
and others at the time of the revival Of
the tax in 1912, stating that the enact
ment of this tax enabled Great Bratain to
repeal her tariff laws, and that it was
''the first beginning of the great pros
perity she has had for the last twenty
years" He also quoted from Gladstone,
Lowe and John Stuart Mill, calling atten-
ton to the fact that the American tax,
like the English one. exempted incomes
below $1,000 and exempted the first 1000
IN all incomes that were taxed He also
quoted as American authorities Amasa
Walker and Prof. a. L. Perry.
On Jan. 25, 1871, Mr.. Sherman made
another exhaustive speech on the income
tax in which he answered every objection
now urged against it. He showed that
it cost less to collect than any other
tax imposed by the United States; that it
not only involved less espionage than
other United States taxes, but that also
that there is not a state in this union
which does not authorize more espionage
into a mans private affairs than the in
come tax law Of the United States; that
II was no more odious or unpopular than
any other tax to the people who paid it;
that so far from being unjust as class
legislation it was the only tax that could
give justice as between the rich and the
poor. He even insisted that 1t was es-
pecially just because the property-holders
had been greatly benefited by the war
and the legislation growing out Of it.
And he specially justified an income tax
on corporations, although the actual pay
ment might in some cases be made by
stockholders who were fairly entitled to
be exempt Mr.. Sherman's speech will
make very good reading for republicans
on the income tax question.