New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1894-01-17
THE PROPOSED INCOME TAX
Ex-Gongressman Lind Discusses the Pro-
posed Corporation Tax
The Deceptiveness of the Measure Clearly
Pointed Out.
Not a Tax on Incomes so much as on Pro-
duction.
A Letter to the Review which is Full Of
Good Points.

Ex- x-Coneressman John Lind of this city
has written the following letter for the
Review and we commend it to the care
full and thoughtful perusal of all our
readers.
Editor Review: In response to your
request for an expression of my views on
the ssincome taxi which 1t is proposed to
levy to make up for the loss of revenue
resulting to the government from the
enactment of the pending tariff bill, I
shall only discuss the proposition sugges-
ted by the president in his message to
Congress. That proposition is mott to tax
Individual incomes, but to tax the in
comes Of corporations. AS it IS only
this latter scheme that has received Mr..
Cleveland's sanction it is safe to assume
that an "income tax" properly speaking
will not be passed by the present Con-
gress unless Mr.. Cleveland should change
his mind, and that he is not likely to do
on this subject. To call this proposed
tax an ''income tax" is a perversion of
language, as a moments reflection will
show. An income tax is a tax levied on
that portion OF the citizens income in
excess Of given sum - say in excess of
$1,000. If persons income does not
exceed the minimum, he is not sub ject
to the tax. If it does he is to the extent
of the excess. Theoretically, at least,
this is an eminently fair tax as it is ap-
portioneo, approximately of course, to
the citizens ability to pay. But the pro-
posed corporation tax does not operate
that way. 1t will fall alike on all cor
porations. In those cases where the tax
will have to be borne by the shareholders
of the corporations (Which will probably
not be many, as will show later on) the
tax will fall upon the holder of ten
shares, the same as it will upon the hol-
der of thousand It is this feature that
ditfcrentiates it from the system of in
come taxation as it exists in England and
j as it existed here during and after the
war.
For these reasons it is more proper to
calIMr Clcvcland's proposed tax, aspect
al tax and shall so term it.
To assume to predict with certainty at
this time either as to the success OF this
proposed tax as revenue measure, or as
20 it's effect on industry would be futile.
as nothing is more uncertain than the re-
suit Of d new tax. All that one can hope
4 to do is to point out its tendency and
probable effects. We do not even know
! in what form it will be presented. lthas
been stated in the papers that it would
DE limited to tax on the net income OF
corporations. If it should pass IN that
form it strikes the writer that it would
not be very productive Of revenue al
least when the country was enjoying
..,lrmocratic timcs.'' But the net income
of corporation is always an uncertain
= ullantity, rs we learned to our sorrow IL
connection with the Pacific railroads
The supreme court found it difficult tc
define it, and it is not putting it toe
strong to say that in the case of a rail
road or industrial corporation the net in
come always has been and always will
be largely a matter of bookkeeping
Hence if the proposed tax is to have any
value to the government as revenue
measure i. will have to be levied on gross
linrnmcS
That this tax should at first thought
-}appeal to the mind of the average citi-
.len as a just and effective scheme to make
capital contribute its quota to the sup
>'pport of government seems quite likely
Neither is it improbable that it will be
hailed and heralded by Mr.. Cleveland's
Enanv admirers as another Of his dispen-
eations for the relief of the masses fo1
whom he processes such great concern
F,,even venture to predict that it will en-
toy period Of brief popularity until the
gpeople have had time to study it and
look back of the label.
- We all know that there is at present
i strong feeling Of prejudice among the
lcople against corporations. In part, al
Yeast, not without cause. Many of the
',orporations on which we depend for the
necessaries and conveniences of daily
Mite Have by short-slghted policy of ar
bltrary conduct and unreasonable exac
sofs brought about public sentiment