New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-05-09
THE INCOME TAX.
A POPULAR VIEW OF THE CASE
DAVID A. WELLS SHOWS THE DANGERS OF
AN AMERICAN DEsPOTIsM


COME TAX To BE THE FORMER
SHALL CLASS DISCRIMINATION
BE ENcoURAGED7
cep,yfgat 1925: BY the Tribune Assoetattsn
AS the point OF first importance and interest ID
the income tax case does not seem to be fully
apprehended by the general public and by not .
few OF the editors of leading newspapers of the
country, and as the case is now again before the
United States Supreme Court for reargument
and readjudcation. the fling OF renewed brief
before the court Of the people by one not men,
ber OF the legal profession may not be unwelcome
or unwarranted; more especially because minds
trained in law not thereby necessarily
trained intelligently to discuss economic sub
jects.
Commencing with first principles. the taxation
OF incomes Is theoretically one OF the MOST
equitable, certain productive and least ex'
ceptiona forms OF taxation. What can be fairer
than that each citizen should annually contribute
an equitable and just portion of his net gain OK
income for the support or the Government undet
which he lives and In default Of which support
he would not be likely 70 have either gain IN
come or property? Practically. however as John
Stuart Mil has expressed 1t. THE fairness wnicn
belongs to the principle OF an income tax cannot
be made to attach to 1t In practice and while
apparently the most just OF all modes OF tax
alton Il Is in effect more unjust than many
others that are prma facic more Objectionable
And again ne says: THE tax. on whatever pr1n'
cspes OF equality 1t may he imposed, ~ IN prao-
tice unequal IN OF the worst ways, railing
heaviest on the most conscientious" ana "shou'o
bo reserved as an extraordinary resource TOT
great National emergencies. In which the neces'
sty OF a large additional revenue overrules all
objections"
Mr. Gladstone. speaking In 1853. also said: J
believe It ian income taxi does more than any
other tax to demoralize and corrupt the people,
And Mr. Disraeli subsequently In parliament eA'
nressed his agreement with Mr.. Gladstone by
saving: THE odious features Of this tax cannot
bv any means be removed or modified" and Win
,h.sa on,nions nearly all educated fnanciers and
economists are IN complete unison. except cer-
tain professors. who educated in Germany. nave
Gonna hack to the United States with an Idea
that because income taxes are effectively COL
,ec,ed in countries having a despctic form OK
Government they can be equally we'll collected
IN countries under a popular Government; ana
how far this theory finds confirmation III Piac'
teal experience is shown by the TACT tha' IN io'A
only 7477s citizens in the United States oct OK
nopuaton OF full 40. 900, would confess TO an
income in excess Of $1,000
AN OUTRAGE UPON PRIVACY.
The question next naturally arises Why Is II
more difficult TO collect an income tax than any
| other form OF taxation? Why does such tax
| nowerfully antagonize popular sentiment, ano'
| as Mr.. Gladstone says. "demoralize ana corrupt
| the people,? The answer Is that an e'ficient
administration and revenue produc,Veness VI
an Income tax REQUIRE that every person liable
10 such taxation in respect to his annuai gains
proats or income shall make 10 Governments
official an exhibit OF the exact hnanciai con'
diton OF his estate. business. or professoh' ZOE
| in default Of such an exhibit any OASIS lof as
sessment must be mere matter OF coh'ec'ule
on the part Of the assessor. with a result devoid
of any pretence to correctness or equaii'y' pus
such an exhibit. disclosing his financial con-
d,tlon TO his business competitors ana 10 4
curious gossip.ng public, man will willingly
make. and he naturally regards 1t In the nature
of an outrage on the part Of a Government thas
socks TO compel him to do it. Hence the success
suI administration Of an income tax involves an"
rao,,,res the use OF arbitrary and inquisitorai
,nethods and agencies which, perfectly consistens
with a despotism are entirely antagonisuc %
and Incompatible with the principles ana main-
| tenance Of free government
Alexander Hamilton, who probably had more
| to do with the framing and adoption OF the reu'
eral Constitution than,any other one man. clearly
ov tho accountability Of the employment or
| arbitrary and inquisitoial methods Tor raising
revenue with free government ana eVidentiN
did not intend that his prospective new e'o'ern-
ment should ever resort TO them' lor III u'S'
cussinr this subject Of taxation IN rhe Coz
s,,,ut.onalst" he expressed himself as follows:
The genius Of liberty reprooates everything
arbitrary or discretionary in taxation. II exacts
/ A.ip ia
shoud know what proportion of his property tho
State demands. Whatever liberty We may Doast
IN theory. 1t cannot exist III tae' ""e "''f""
| assessments continue
The United states supreme Court, In the case
q, povd w. United States di6 y. =. Rep, 6si,
ea0 has also expressed itself IN resDect To
resort 20 arbitrary and despotlc measures ny
omc,eis of the United atetes which are esHeht'nI
o. .n efficient administration " an income tax
m follows
A,y eompu,aory discovery, by es,ortlng. ne
,as,ys nv o",k or compelling the production of hls
private y. sopss Ss' his @ proc,y IL contrary lhe prnel
pies OF FREQ g9yenmsn T. "ho,,s", norrsn 70 10 ~. n"
instincts p Asrsan !, may yi sn' ,hS The p"rposs,s rrs ~,
of desoiic pJy.r but cso' ,.snnai apa" ~, sr"Jou
DIRECT AND INDIRECT TAXES
The point OF consideration OF next Importance
for clear understanding OF this SuoJ'ct ~ '""
circumstances under which tho constitutionality,
OF the existing income tax has been called IN
question. Considered In the abstract there 10
and can be no question that Congress has the
constitutional right to enact an income tax. But
as regards the provisions of any such statute a.
Congress has enacted. there can be no doubt thas
the question OF consttutlonaity has been en-
TREY legitimate and warranted: and in this
way:
The Federal Constitution divides the taxes that
Congress may impose under It into two classes,
those which are direct and those which are In
direct: or. as the letter Of the Constitution ex'
presses It, duties. imposts and exc!ses.' 1t also
hau he annortioued.