The sun. [volume] (New York [N.Y.]) 1833-1916, 1894-04-10

tax upon all the income Of individuals. but
be derived from certain corporsts invest
ments."
NEITHER BY SECRETARY cARLrsLr.
Secretary Carlisle in his annual report IL
limitation AZ report IS ns assumed that there
was no possibility Of the adoption Of 3 general
WSs .s sSs eensedIns he odious and
inguisitofial character q such tax and its ia.
billty to evasion he defends Limited ,n1 YAK
ments upon the plausible ground that the
assessments or returns need not be based
PERSONS psD% shared with thatr payment. GSt upon
the public records and The regular and ouhenuo
%Sob ths In we tggab have been mas and
they have the additional merit OF being i'm.
posed entirely upon that part o. ne ci,iz EN-,
but which. in the cases OF legaciec and success
sions, Is acquired By mere operation OF Law,
Incomes from investm ants In corporations and
Joint stock companies, By tho simple earning
capacity Of HIS capital as such. 'oithout per-
Yet disreGardlne. or exceeding the recon;
n inc 81 az i ngividua Whether eafned ~
his labor or skill :" or otherwise, and to. obtain
tion OF public records. but from an investiea-
tlon OF AL his private books and papers
suegested By the President and the Secretary
OF the Treasury, or general, as provided in this
bill. 10 equally Objectionable.
THE FRANCHISE" ARGUMENT.
The argument that a Federal tax upon In
comes derived from corporate investments
may with proprlety be imposed. because cor.
porations are invested by law with valuable
zen. would have more weigh If such franchises
were usually granted by Federal instead OF
however, and while State authorities might
with much reason upon such ground tax the
dends Of such corpoTstions for the support OF
their State Governments. the Federal Govern
ment has no PARTICULAR standing or equities
eral Government whether It is an individual
or q corporation that is In receipt of income.
come Ia no greater in one case than in the
other. except in the rare instances where the
ssos Ss S tsxss S6S
individual and corporate incomes alike
such as Is proposed in this easure. would
compel the States to abandon their State taxa
ton. This y most Important port sp,t and serious
N New 2 n' sons S 81 tS sas last
ceived from state taxation on the capital
and earnings Of corporations the sum OF 81
6O6.O4T.45 excluding. OF course. the taxation
OF their real estate and personal property and
any local taxation. In the same state there
6sS7 90 from the State heritance and gift tax.
These taxes, from which the state derives
of the 90
hardship in the event Of the enactment OF this
BILL which taxes the same sources two per
II follows that the State taxes would neces-
sarily have to be abandoned. and the amounts
from real estate or In other ways. New York's
interest in opposition to this feature OF the
proposed bill can thus be appreciated.
THE INJUSTICE NOT MITIGATED.
Neither 10 the Injustice OF the proposed cor
porate tax mitigated by the fact that II is
against corporations rather than AGAINST indi,,
yduais beSause nthop aS In form bimpSssr,a q
deducted from the dividends paid to the indi-
vidual stock no ders. and 1t Is virtually tax
The Individual stockhoIders are not neees:
sarily the rich. but they usually include all
found widows. orphans, trustees. and exeOu-
tors. and persons Of ordinary means who have
IN he
1t the suggestion for the taxation Of INCOMES
derived from corporate inyestments' was
pie upon the WELL understood popular prelu-
dice against corporations. the proposition has
Is the individual stocth old.rs whose dividends
would be diminished. and who would be seri-
BY the tSs
such tax upon the earnings OF individuals
THE TAX TOO LARGE.
This bill neither follows the recommends
lions OF tho President and the Secretary OF the
Treasury as to the kind OF income tax desired.
nor as to the amount or rate Of the tax itself
The President preferring not to be specific,
but ca utious. recommended simply a small
tax upon incomes" The Secretary suggested
suggestions. and adopts a tax Of two per cent.
on all incomes over $4,000. no matter how
large the excess may be.
AN ISDRFENsIBLE EXEMPTION.
This exemption OF so much as 81. 900 neces-
sarily leads to considerabl Bile criticism. II an
income tax 10 justiiable at all. IL Is difficult
least Of any material amount. Exemptions
are merely q matter OF governmental charit J
being In derogation OF general principle,
they should not be unreasonahly enlarged. II
incomes are properly taxable. then all incomes
proportionaiy. without fayorltism to any in
dividual or class. The man OF moderate means
According to what moons they actually re.
ceiye. no N ore and no less. and no natter what
the amount may be- great or small. ms must
be the correct theory OF an income tax. II any
Such q tax being largely OF foreign origin
and and injected Into this bill Il might be expected
that the exemptions would follow foreign prec.
sSSe In GERMANY Gn the e1s@ption VARIES from
TIA ria Sis f and IN Enaisnd s7!o. YET here
sum q 90. fiaare Tor which there IS no
precedent anywhere In the world SO large
class receiving g respectable income. twice as
much as Is ordinarily necessary to furnish .
fair living. who pay no tax whatever. This
necessarily creates privileged or exempted
class on the one hand a. against taxpayinR
class on the other.
When real estate 10 taxed. all that the indi-
viduAl owns is taxed without the exemption OF
any part, So with personal property. aside
from few unImportant exceptions. so with
the earnings OF eorporations-a all are taxed. or
none at all The same principle applies 10 the
oleomarga airline and the State bank taN-there
are no exemptions tolerated. But in the
strenuous effort to popularlZe this war tax In
time OF peace every Just principle OF taxation
IL either violated or unreasonably extended.
DAVID A, wEILs's VIEWS.
The Hon. David A. Wells OF Onnecticut con
| tributes an able and Interesting article in he
| Forum OF last month in opposition to an in
come tar. His attitude upon this Iuest on
| may create a suspicion Of his loyalty 10 the
| cause OF tariff reform In the minds Of q select
| coterie OF overzealous professional reformers
| with which the country 10 afflicted. but not In
the minds OF the American people, Mr.. Wells
| was a sincere and radical friend Of revenue re-
| form many long years before any politician OF
Official selhshly sought to monopolize II as hi;
| own particular hobby, and his sentiments will
| carry much weight with thinkinE men. Upon
the precise point which / am discussing lie
writes as follows: