Omaha daily bee., 1909-09-22
TALKS ON
INCOME TAXES
tContInued from Flrst Page.l

the evidence which he secures by his inves-
LEGATIONS Of books and papers and examlna-
ton Of witnesses is not to be made public
but is to be held in the secret archives
Of the government until the president shall
deem It Of public interest and according
to Justice, TO make the facts known.
up to this time we have no ADEQUATE
statistics concerning our corporations. Even
the stockholders, whatever their right may
be to know the course Of business OF cor
porations, are generally in a state Of com
plete ignorance and any instrumentality by
which the corporations shall be compelled
to disclose the accuracy, a general state.
ment Of their conditions certainly makes
for the public good. Indirectly il would
help very much in another revision when
ever that shall come because corporations
engaged in business said to be affected by
the tariff will have upon record In Wash
ington their exact financial condition from
year to year In the matter of their incomes,
their expenditures and their debts.
Plea for Amendment.
Having said this much with respect
to the corporation tax as It Is. / want 70
say a few words in favor OF the passage
Of the income tax amendment as proposed
by congress to the states. ssum the
constitutional authority to have been given
I am opposed to a general individual in
come tax law, except in times Of great
national stress. l am opposed to 1t be-
cause Of the difficulty already alluded to,
that IT puts such premium on perjury as
to have led other governments to abandon
that method of levylng an income tax and
of imposing the tax wherever possible on
the sources Of income in the hands of
those who are not ultimately 10 pay 1t.
The instance l have already given OF an
Increase Of 100 per cent in the proceeds Of
the tax when changed from a personal
tax is a most forcible argument in ia, or
Of the proposition. that the inqulsitorlal
feature Of an income tax levied directly
upon the person together with the inoviia-
BILE opportunities for escape from the tax
by use OF perjury, makes it desirable, If
possible, to avoid such a direct method of
levying an income tax.
Needed Ms Emergency Tax.
But 1 am most strongly in favor of
adoption by the states Of the amendment
authorizing congress to impose AL Income
tax without apportioning it among the
states according to population, and 1 am
strongly in favor of this because in times
on great stress or war or some other
calamity were TO visit this country and
we should need to strain our resources,
the income tax would be one Of the es-
sential Instruments by which we could
collect a large amount of money to enable
us to meet the exigencies. 1t has been so
In the past, for during the civil war it
was understood that the levy OF an in
come tax without apportionment was con-
stitutlonal and such a tax was levied and
collected. And l consider It in the con-
stituttOn, as at present construed, an
elemental weakness on the part of the
central government not to be able in times
of emergency to levy such a tax"
Tax on Accumulated Wealth.
"Of course, It will be said by those who
are opposed to the income tax that there
will be a disposition to impose a direct in
come tax merely as a means Of collecting
ordinary income taxes in normal times, and
that no distinction should be made In the
constitution by which the power to levy
such a tax can be limited to times OF
emergency because it is impossible to de-
scribe what the emergency should be. l
agree with that, and l agree that there is
a probability that at times a desire to tax
accumulated wealth will lead to the move
ment in favor of a direct incon tax, but I
am also confident that its inquisitorial
character and the fact that in time the
opportunity for perjury will show II to be
SO ineffective in reaching the persons
whom It is sought to reach by a proper
tionate tax, that II will be wise to adopt
the course taken in England and other
countries having great experience with
such a tax, and to follow the course OF our
corporation tax rather than by direct per-
sonal imposition, except in great emerg-
encies.
IF the income tax amendment passes,
as 1 hope 1t may, we can then enlarge the
corporation tax so as to include a proper
burden on the bondholders in corporations
as well as upon the shareholders, and this
will make this instrument Of taxation even
more equitable than it now is.
Those who favor a direct personal in
come tax for the purpose Of restraining
great wealth will probably find It inef-
fective for the reasons given.
Division of Big Fortunes.
II have already considered in a speech
which / made In Columbus in 1907 how our
great fortunes could be divided without
drastic confiscatory methods. 1t seems
to me, as it did then. that the proper au-
thority to reduce the size OF fortunes is
the state. rather than the central gov
SIlHenl' Let the state pass laws OF III
heritanoe, which shall require the division
Of great fortunes between the children Of
the decedents, and shall not permit a null
timillionaire to leave his fortune I'm trust
so as to keep 1t in a mass; make more
drastic the rule against perpetuities which
obtain with the common laws, and then
impose a heavy and graduated inheritance
tax. which shall enable the state to share
largely in the proceeds OF such large ac-
cumulations OF wealth which could hardly
have been brought about save through its
protection and its aid. In this way, gradu-
ally, but effectively, the concentration Of
wealth In one hand. or a few hands, would
be neutralized, and the danger to the re-
public which has been anticipated by a
continuation through generations Of such
accommodating fortunes will be obviated.
The use OF the income tax itself for this
purpose will, l think. never be very sue
oessful because OF the defect already In
dlcated-the difficulty OF finding the in
come awhile to impose the tax, and the
opportunity that perjury will offer to es-
cape It. An inheritance tax cannot be
thus escaped, because when a man dies his
property must come before some court for
consideration and adjudication with q view
- a. - $3.50