The Mitchell capital. (Mitchell, Dakota [S.D.]) 1879-1918, 1894-09-21
THE INCOME TAX.

The income tax, which is fea-
ture OF the existing tariff law, is ret
roactlve insofar as to be applicable to
the business of 1894. 1t provides for a
two per cent. tax on net incomes en-
tending beyond the limit of 81 1000 per
annum. Persons and corporations
whose income amounts to less than
$4,000 per year are exempt from this
species OF taxation. A party whose in
come, for instance, equalled $4,000 per
year, would pay two per cent. tax on
ST, ,O00, or he would paysl20 as income tax.
Viewed specifically and abstracty.
this law meets with popular support:
because theoretically it carries with it
the logic and justice of taxing the net
surplus OF the peoples wealth, instead
OF their necessities. The law is sup
ported in congress by those who are op-
posed to imposing taxes upon the con-
sumption of the country, as is the case
with tariffs and internal revenue taxes.
This class of public men would discard
the method of indirect taxation, which
reaches everybody through tariff du-
ties, and replace it largely with the di-
rect income tax, which is supposed to
reach only the wealthy.
But before assuming to have a fixed
opinion in favor of this law, the reader
should not only examine the reasons ad-
vanced for it, but those which recite
the objections to it. 1t must be re-
membered that it is not the first time
this country has tried an income tax
law. Actuated by the financial neces-
stiles arising from the late war, the
government enacted such law in 1862,
which remained on the statute books
until 1872. While many of the people
were moved by patriotic impulses to
help save the Union, in those days,
that law served as great aid in raising
money for the government. But after
peace was declared, it became very OBJ
noxious, and although the net wealth
of the country was rapidly increasing,
|
ally diminished. People who had in
comes were tempted to cover them up,
and evade the law. The operations of
it were inquisitorial and subjected bus
mess men to having their financial af-
fairs made known to their competitors
and the curious. 1t all shows the un-
popularity of direct taxation, except it
be for local purposes for which a person
can see the direct benefits. England
has tried this method at different times
in her history, but only as war meas
ure. In Germany the income tax sys-
tenn has extended to even the meager-
est income.
Such a law invites perjury and eva
sions to escape its exactions. And still
worse, it really creates distinct class,
who will be known as the rich, and we
believe it is not best to have a law
which recognizes any class.
A property which will produce an
income OF 81 900 per year, computing
the interest at six per cent, would have
to be worth little over 500. 600. Hence,
uAuer the present law, Il corporation
having property worth $50. 900, except
that it, paid more than six per cent,
would entirely escape the income tax.
1t would practically make distinction
between one rich man and another.
No doubt the fact that many wealthy
corporations and others have system
atically conspired to escape paying an
equitable share of the local taxation,
is responsible, in measure, for the
existence of this law But the wisest
men of our times, many of whom are
humanitarians as we'll as political econ
omists. consider the income tax law out
of harmony with republican govern
ment. There is better way to reach
the evil complained of.