The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1910-01-17
GOV. HUGHES TOO TECHNICAL.

Governor Hughes in submitting TO tn,
legislature of New York the proposed
amendment to the Federal Constitution
explicitly permitting the imposition OF
an income tax, took occasion TO enter an
objection against that tax and to sug
gest that the proposed amendment ought
to he changed in a way TO eliminate
from the income returns all entry on ac'
count of income by way Of interest on
State bonds. He considers that the ex
ercise Of Federal power to levy tax
on account of income from interest on
State bonds would be an attack upon
the State S credit, and would be iniur.
ious to the sale Of its bonds. In this
we do not think that Governor Hughes
has maintained his high standard of
cool and accurate judgment. For, the
taxation through income returns in the
way of a small percentage on the in
terest obtained from State bonds would
be at the worst such an indirect and
feeble assault upon the State credit as
TO be negative quantity. There is no
obligation on the part of any citizen Of
a State to buy the bonds OF his State
If he does buy them, it is because he
considers the investment Il good one.
To imagine that such buyer would re-
lieye himself of State bonds because
he was taxed on his interest income
from them, is TO imagine that he could
free himself from such income tax if he
did not possess such bonds. but had his
money invested somewhere else, which
is fallacy. Where else would he in
vest it, and escape the operation of the
income tax, If he honestly rendered his
returns? AS Governor Hughes states
his objection, il would seem that he con.
siders proposition for an income tax
without eliminating income from the
interest on such bonds, as a limitation
upon the borrowing power Of the State.
1t could not possibly, however, work in
such a way, There is no authorization
10 tax the State bonds as such, but only
the income from them, precisely as an
income on other accounts would be
taxed. AS applied to New York, the
average New York investor would be
far more likely TO have his money in
New York City bonds than in New York
State bonds; but would Governor
Hughes ask TO have income from New
York City bonds eliminated from tho in
come tax returns7 If not, why not
If not eliminated why would not the
proposal to tax the income on account
of interest on them be just as severe,
in fact, more severe, upon New York
City than the like condition would be
upon the State3 The objection, as a
matter of fact, is far-fetched, trivial,
and unimportant. 1t is indefensible,
either logically or legally. 1t is, in
effect, a demand to have State bonds |
put into favored class, by the Federal
The income to be levied by the pro
posed amendment TO the constitution of |
the United States would have an exemp.
tion that would be sufficient to cover all |
ordinary income by way of interest on
State bonds, anyway; and if the interest |
On the State bonds were distributed gen
orally among the people, as in France,
The people generally holding the bonds
in small sums. the income tax would
not reach them.
There is another proposition in this
that at first glance would
seem great deal more serious than Gov.
erDor Hughes's academic objection TO
The imposition of an income tax upon
Ia A, L
Inclusion of salaries of State officials
n the income return, making those sal
aries subject to the income tax as the
amendment proposes and undoubtedly L
would do. Any objection to this, of
course, would be as unsound as the OBJ
lection to the income tax as applied
against interest on State bonds. I'm
Governor Hughes thrashed
'ut this latter objection in his mind and
ound 1t would be unsound Otherwise
le would have stated it. 1t is, however.
fact, more serious objection than
he one he did state, because it attacks
.lmost in direct manner the salaries
which the State pays to its officials for
arrylng on its functions. The asser
ion of State rights in this connection
GEMS to be rather lame, any way it is :
nut. :
Inasmuch as there is no proposition
o single out the income from State
onds or the salaries of State officials |
8 the sole subjects for the imposition
the income tax, and as there is no |
roposition to tax the bonds themselves
be objection to the amendment as il |
lands seems theoretical and technical
1erely. without bearing any substantial
easons for its interposition If man
as income above the limit which would
G set where the income tax would be.
IN to apply, it makes no difference
here he gets that income, he should be
axed on 1T. 1t is income lust the same
nd ought to be reached by taxation. no n
iatter from what source he gets it.
In San Francisco officers of the Gov. II
rnment secret service have lust can.
lred three counterfeiters, together with