Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1899-08-25
THE FAIREST OF ALL.
THAT is WHAT BRYAN SAYS OF
THE INCOME TAX.


in Proportion to Ability to Pay and Pro.
lection Rendered - Property and Import
Tax Necessarily Heaviest Upon Those Of
Small Means to Pay-Some Instances Of
this System Of Obtaining Revenue.
Is there any justice rule for determ-
ing the proportion in which citizens
should contribute to the support OF
the Government?
Adam Smith suggests rule which
must commend itself to every fair
, minded person. He says: "The sub
jects OF every State ought to contribute
to the support of the government as
nearly as possible in proportion to
their respective ability; that is, in
proportion to the revenue which they
respectively enjoy under the protec-
ton OF the State. In the observation
or neglect of this rule consists what is
called the equality or inequality of
taxation" In other words, direct
tax upon incomes is the fairest tax
that can be suggested. All taxes are
really income taxes, because all taxes
are paid out of income; but an in.
direct tax may work great injustice,
because its operation is concealed
from the public view.
Local taxation, in city, county and
State, is usually proportioned to the
property of the citizen; but instead of
being entirely equitable, a property
tax is often collected almost entirely
from visible property. leaving the in
visible property free. Where visible
property is taxed and the invisible
property escapes, the possessors of WIS.,
ible property are over-taxed, in order
to make up for the evasion OF those
who possess invisible property. But
when a property tax is honestly COL
lected upon all forms of property, real
and personal. it is not as fair tax as
an income tax. Property may be
temporarily unproductive.
Then, too, a property tax does not
reach those who enjoy a considerable
income under the protection of the
Government, and yet consume the in
come without investing in real or per-
sonal property. The income tax
reaches all.
While our local taxes are not COL
lected with absolute justice, we make
a nearer approach to justice in local
taxation than we do in the collection
OF our Federal revenue. Until the be-
ginning of the Spanish war, almost all
of the revenue collected for the sup
port OF the Federal Government came
from two sources, namely, internal
revenue taxes and import duties. In
ternal revenue taxes, being collected
on liquor and tobacco, are not COL
lected from the people in proportion
to their incomes, but in proportion to
the liquor and tobacco they consume,
and as the consumption of liquor and
tobacco does not increase according to
income, the taxes collected through
this system are, in effect, graded in.
come taxes, the largest per cent. being,
on the average, collected from the
smallest incomes and the smallest per
cent. from the largest incomes. I'M
port duties, delivered on consumption,
are also, in effect, graded income taxes,
bearing heaviest upon those with
smallest incomes. 1t must be evident
to the most casual observer that the
burdens of the Federal Government,
instead of being borne accordingly to
the rule laid down by Adam Smith,
are too heavy upon the poor and too
light upon the rich. The income tax
provided by the Wilson bill was in
tended as partial compensation for
the injustice done by the other sys.
TENS. The per cent. assessed upon
individual incomes above 81 900, while
not sufficient to bring the rich up to
an equality with the poor in taxation,
was a step in the right direction.
Much fault was found with the ex-
emption provided in that law. Many
who did not understand the reason for
the exemption protested against it and
insisted that the per cent. should
apply to all incomes, large and small.
But since excessive burdens are laid
upon the possessors OF small incomes
by internal revenue taxes and import
duties, it would be manifestly unjust
to continue the inequality by making
them pay per cent. equal to that
collected from the possessors of large
incomes.
The 2per cent. tax upon the net in
come of corporations was defended
upon the ground that the corporation
enjoys special privileges conferred by
law, and occupies much OF the time OF
the Federal Legislature, the Federal
Executive and the Federal Courts.
Just prior to the passage of the Will
son bill obtained, through the
courtesy OF Secretary Gresham, statis-
tics from q number Of European Gov
ernments.
I found that in Prussia the income
tax had been in operation about twenty
years, and that incomes under 9OO
marks were exempt, while the tax