New-York tribune., 1909-05-27
SPECIAL TAXES.

There is renewed tax N Washington OF al-
taching to the Senate tariff bill some provision
for additional special taxation 1t is becoming
more and more apparent that the Senate bill
will not raise sufficient revenue. When Senator
AIdrich made his speech opening the tariff de-
bate he was unduly impressed by the temporary
snurt in iInpOrtatiOnS and customs collections
which marked the latter half of March and the
first half Of April. Encouraged by what looked
like a quick revival of import trade, the chair
man of the Finance Committee was led 10 as
sumo that the volume of imports in 1909 10
would equal the exceptional volume Of imports
in 1906-'07, and that revenues from customs
would be correspondingly increased. Mays re-
turns so far do not Justify that conclusion. The
deficit for the month on May - was S6,679,00o.
more than twice as large the deficit for the
whole of April. The Tribune has held from the
beginning that Mr.. Aldrich's calculations Of
revenue from the Senate bill were too sanguine.
There are no indications that it will raise the
necessary revenue. and even its trainers are
now considering the necessity Of resorting TO
special taxation.
Some curious ideas about the merits of the
forms of special taxation suggested are cur
rent in Washington. There is strong minor
ity-perhaps majority-in the Senate in favor
of levying an income tax. Among members of
the upper house that tax leads in popularity.
But why it should is something of a mystery.
II may be that its advocates are not all sincere.
Its loudest champion, Mr.. Bailey of Texas, is
credited by many with q desire to talk for It
on the floor of the Senate. but to manGuvre so
as to divide the income tax forces, as he has
already divided and demOrallzed the Demo
cratic minority. However that may be, the In
come tax is obviously the most Objectionable
and undependable Of the special taxes far
considered It is an especially hard tax to
collect requiring the creation of an expensive
force of agents and the use of methods not in
cnnsonance with American ideas and habits.
The income tax is well suited 10 the Of
centralized. bureaucratic government. whose
chief business il is 10 exercise paternal supervi
sion of the private affairs of its subjects We are
not accustomed 10 that sort Of administration.
and a radical change in public sentiment would
have 10 occur before it would be possible TO col
ect an income tax which would fall equitablv
on those who ought 10 pay it The honest would
suffer because the dishonest would be able TO
evade their obligations. To make all pay their
due proportions would cost an excessive per
centage of the sum raised
There is also no certainty that the income
tax scheme adopted would pass muster in the
Supreme Court. AS a tax ii might be just As
unenforceabIe as the similar tax carried
in the Wilson-Gorman law. II is unwise TO
make the experiment of taxing incomes while
other more promising means OF raising revenue
are unexhausted. 4 sure source of revenue
should be preferred TO a speculative one
The bill passed by the House of Representa-
tives levied tax on inheritances. That tax as
a revenue producer has certain merits. one of
which is that IT can be collected without undue
expense It is open, however to two serious
objections. It can easily he evaded by gifts
or assignments during life. and about three
fourths of the states now levy inheritance taxes
an extra federal impost would weigh too heav
y on the transfer of estates in many parts of
the Union. In New York. for instance, the
maximum rate would be raised from per cent
10 10 per cent. Most of the states would greatly
prefer 70 retain their present monopoly of this
form Of taxation.
II is said that some Senators who are opposed
TO the theory of an income tax nevertheless
favor a tax on the dividends Of corporations.
Yet. if that Is not form of income tax. what
is il? 1t is far less equitable than a general
income tax. because it singles out one source of
income and admits Of no exemptions. There are
hundreds OF thousands of stockholders in cor
porations who receive small annual dividends,
amounting to from $50 to $500 The dividend
tax in the long run would be taken out of their