New-York tribune., 1910-01-09
NOT HAPHONJOTS

The defenders of the income lax
amendment who are trying to meet the
objection to it that il fails to exempt
from taxation sources of income now
properly protected by Constitutional in
depreciation or by statute seem TO find
great difficulty in getting together. At
IL. outset some Of them argued i'm
pressively that the lack of limitation
was unimportant because Congress
would never be so rash as 10 exercise
the power given to il 10 tax income
from state. county or municipal bonds,
income from federal bonds or the sala-
Ties Of the President. federal judges and
state officers. The World said on
Thursday:
It is hardly probable that congressman
would pass n federal tax law impairing
the value Of the public securities of the
communities in which they live and for
the redemption Of which their own prop
erty is a pledge.
Governor Judson Harmon of Ohio,
who favors the ratification of the
amendment. said the same day that he
had no fear that Congress would ever
pass law which would cripple or de-
''stroy the states" He predicted that
congressman voting for a law taxing
income from state securities would
soon fill political graves" Yet other
defenders Of the amendment are now
coming forward with the argument that
it is not at all unreasonable TO permit
Congress 10 tax income from state
county or city securities. since taxa
1inn of thaf ora,iap j.. roa1i,- ,Ine;,,
able Senator Norris Brown. of Ne
hraslla, who is mistakenly supposed
10y many persons To have drawn the
amendment submitted 10 the states by
Congress. frankly defends the Ievying
Of a tax on income from state obliga-
tiOnS He asks:
What is there SO sacred about the in
come derived from state or citv bonds
that 1t should be exempted from federal
taxation? Why should bondhOders be
treated differently from other people?
IT is not the state or city that would nav
the tax. but the bondhoder And why
should he be favored more than the man
who has loaned his money to private
persons or put it into business
The New York American" indorses
Mr. Browns view and says that it is
federal government puts slight limi-
tation" on a state's "cOnvenences for
going into debt
This is exactly the argument made in
the Senate by George g. Vest when the
income tax section of the Wilson Cor
man act was under consideration On
June 26 1901. he said. opposing David
Is. Hills amendment TO except income
from state, county and city securities:
Now. what argument can be made that
the holder Of state or city bonds, which
have been put on the market and sold
and the money received by the state Or
municipality and expended by it, should
be exempt from taxation? Is that not
an investment? Is that not as much an
investment as any other which can be
made by the citizen? ] cannot conceive
where there is anything in the shape Of
am equity which should prevent such Sc
curities from sharing the common fate
under this measure given to al others.
Mr.. Vest and his Southern state
rights associates did their best 10 make
state securities share the common
fate" 1t took the Supreme Court TO
nullify their work. The pending Con
stitutional amendment was passed by
the two houses OF Congress without
much examination. Probably few Sen
ators or Representatives had consid-
cred the objections now raised 10 its
excessive grant Of power Yet those
who framed it apparently knew what
II meant Senator Brown introduced on
June II a joint resolution 10 amend the
Constitution which read:
The Congress shall have power to lay
snd collect direct taxes on incomes with