The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1906-12-15


The following is the portion OF tnel
Presidents message relating to incomelI
and inheritance taxes:
ENACT INHERITANCE
AND INCOME TAX LAW
The question Of taxation is difficult
IN any country, but it is especially diff
hcult in ours, with its Federal systeml
OF government. Some taxes should onI
every ground be levied in small dis
trict for use in that district. Thus the
taxation real estate is peculiarly one
for the immediate locality in which tn,
real estate is found. Again, there is
no more legitimate tax for any State
than tax on the franchises conferred
by that State upon strict railroads and
similar corporations which operated
wholly within the State boundaries,
sometimes in one and sometimes in
several municipalities or other minor
divisions of the State. But there ar,
many kinds of taxes which can onlyI
be levied by the general Government
so as to produce the best results, be.
cause among other reasons, the at
tempt to impose them in one particu-
lar State too often results merely inl
driving the corporation or Individual
affected to some other locality or oth>
er State. The National Government
has long derived it's chief revenue FRONT
tariff on imports and from an in-l
ternal or excise tax. In addition to
| these there is every reason why, when
next our system of taxation is revised,
| the National Government should im-
| pose a graduated inheritance tax, and,
| if possible, a graduated income tax.
The man of great wealth owes a pecu-
liar obligation to the State, because
he derives special advantages from the
mere existence of government. Not
only should he recognize this obliga-
ton in the way he leads his daily life
and in the way he earns and spends
his money, but it should also be recog-
nized by the way in which he pays for
the protection the State gives him. On
the one hand, it is desirable that he
should assume his full and proper
share of the burden of taxation; on the
other hand, it is quite as necessary
that in this kind of taxation, where
the men who vote the tax pay but lit
tie of it, there should be clear recog.
milton of the danger of inaugurating
any such system save in a spirit of
entire justice and moderation.
EQUALIzE TAX BURDEN.
Whenever We as a people undertake
to remodel our taxation system along
the lines suggested we must make IT
clear beyond peradventure that our
aim is to distribute the burden of sup
porting the Government more equit-
ably than at present; that we intend
to treat rich man and poor man on a
basis of absolute equality, and that
we regard It as equally fatal to true
democracy to do or permit injustice Il
the one or to do or permit Injustice tc
the other
: 1 am well aware that such a subjec
as this needs long and careful stud
In order that the people may becom
familiar with what is proposed to b
done, may clearly see the necessity o
proceeding with wisdom and self-re.
straint and may make up their minds
Just how far they are willing to go in
the matter, while only trained legisla.
tors can work out the project in neces.
sary detail. But feel that in the near
future our national legislators should
enact a law providing for a graduated
inheritance tax, by which q steadily
Increasing rate of duty should be put
upon all moneys or other valuables
coming by gift, bequest or devise to
any individual or corporation. 1t may
be well to make the tax heavy in pro-
portion as the individual benefited is
remote of kin. In any event, in my
judgment the pro rata of the tax
should increase very heavily with the
increase of the amount left to any one
individual after a certain point has
been reached. 1t Is most desirable to
encourage thrift and ambition, and a
potent source Of thrift and ambition is
the desire on the part of the bread.
winner to leave his children well off.
This object can be attained by making
the tax very small on moderate
amounts of property left, because the
prime object should be to put a con-
stantly increasing burden on the in
heritance of those swollen fortunes
which 1t is certainly of no benefit to
this country to perpetuate.
PLAN IS ETHICAL
There can be no question of the
ethical prOpriety Of the Government
thus determining the conditions upon
which any gift or inheritance should
be received. Exactly how far the in
herltance tax would. as an incident
have the effect Of limiting the trans
mission by devise or gift Of the enor-