davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
Nations in Which Incomes Now Taxed Represent Population OF o4OOOoooo
Which Number Will Be Increased by l20OOOOOo the United o'eS
and France Jon the Pesso-Lawson Pmd President the New
York Tax Commission Gives for The Tribune His Views
the Proposed Amendment O the Constitution

Every tenant paying more than a GER
tain minimum OF rent would be required
to deduct the tax paid in respect OF the
income from real estate. II necessary this
plan could he supplemented, as " - III
England by tax on the income derlVeu
from every trade. profession or business
I'm these cases there would have To p'
an exemption and the declaration OF the
taxpayer would be necessary Under such
a plan as this il seems that at least hVe-
siXths of the total tax could be coliec'eu
without the declarations of taxpayers.
1T is true that there is much sentiment
in favor of exemptions and graduation
of the tax so that the rate shall increase
as the income of each person increases
Exemptions and graduations are repue-
nant TO the theory Of the COLLECTION oil the
tax al source. and for many reasons theE
seem TO me Objectionable. AT the same
time il is possible to collect the tax at
source. allow exemptions. and impose a
Super-taX. which may be graduated II
desired. somewhat after the English Sys-
tenn. If a super-taX We're only imposed
upon large incomes say. over t2o,o". the
nufnDtl Oh p"ISoHS require" W. mum
sonal declarations would be comparatively
few and those few would be the ones most
competent TO make the declarations. be
cause they could employ counsel to assist
them. In such declarations the sources
of income in respect of which the tax had
already been paid at source would Oe
shown. and the tax would not be PAID a
second time but only a super-taX added
if the amount of the income demanded II.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
PURPOSE OF THE TAX.

There is the question Of what is the
true scope and purpose OF the ircome tax.
The enthusiastic champions OF such tax
are sometimes inclined 20 look upon il as
Il panacca for all social ills losing sight
of the fact that like every other form of
taxation. it's chief function is the raising
its limitations. Whether II can ever he
made to occupy anything more than sub
ordinate position in the field OF taxation
may well be- doubted. To put the whole
burden OF taxation upon incomes would
hc more unjust than to place it wholly
upon property. II Is not the proper func-
ton of an income tax to correct social in
qualities nor 10 take money from the
rich for the benefit Of those less fortu-
nate. In the second place there is
the great question of whether the tax
alton of incomes should be undertaken
by the federal government or by the
states. or both.
"A third question which il likely to re-
ccive much attention Is that of the COM
parative merits Of progressive and pro-
portional taxation. Upon the ore side are
progression is necessary. especially in a
federal tax. 10 Offset the inequalities of
indirect taxation and to bring about APP
proXimate equality OF sacrifice In OPP
position to these contentious the dangers
OF class legislation are pointed out, and it
is argued that the great advantages ars-
Ing from collection mt the source can
only be secured by proportional tax. II
has been stated that two-thirds of the
English income tax is collected at the
source. and thus 10 very large extent the
lnquisltorial proceedings which tend to
render Income taxation unpopular. are
avoided. But ii is not probable that any
such results could be obtained I'm the
United States. where the qualifications of
business are so much more extensive and
CompIicntaI
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
PROPORTION IN INCOMES.

"a tabulation Of the rates in twenty
countries where IA differentiation exists
between earned and unearned incomes. or.
In other words. between incomes from
labor and incomes from capital, reveals
the fact that the average proportion Of
the rates. is as three to fve--that Is To
say. when "A certain amount of income
from labor pays So the same amount Of
income from capital would pay 81. This.
II will be remembered, was the exact pro-
portion adopted In Holland by Dr. Pier
son after much scientific Investigation"
Dividing the forty countries considered
above into two groups. the English
group" and the continental group" II
appears that the former tax small in
comes more fyavily and at the same
time ease the burden on the big incomes
The English group, comprising chiefly the
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
ExEM PTiON.

The proper amount of exemption at the
foot Of the scale Is another problem upon
which there IL likely to be much divergence
OF opinion. Some OF the income taxes re-
Gently proposed have placed the cXemp-
ton as high as $4,000 and even $4,000,
while not few writer's and speakers have
argued against the allowance OF any eX-
cmption The best authorities are in sub
stantial agreement that the exemption
should equal. but not exceed, n reasonable
minimum OF subsistence But TO de-
termine what sum would answer 10 that
term IL no easy task.
I'm the matter of Attachments and diff
ferentiations 1t IL evident that income tax
alton permits Of almost infinite develop
ment. II attachments are to be allowed In
favor OF those who have children or de-
pendents to support the question arises
whether certain drawbacks. such as old
age, physical inlirmities. etc.. should not
be taken into consideration. II there Is
differentiation In favor Of earned income
G similar discrimination might be made I'm
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
PROPORTION OF TAXPAYERS.

The proportion OF income tax payers
to population is an important item. but
there appear to be only twenty countries
in which reliable statistics upon this
point are available. Fortunately these
comprise most Of the larger countries. e.
The proportion which the income tax
payers bear TO total population in these
countries Is 3is per cent. But If India is
omitted, az II perhaps should be. owing to
exceptional conditions which prevail
there, the rate for the remaining nineteen
countries rises to 10 per cent. Among the
larger states the highest proportion Is
found in SaXony. where % per cent OF the
population pay income taxes. In Prussia
the proportion Of income tax payers IL
1875 per cent. Although the population OF
Prussia Is only about five-sixths Of that
of England. the number OF income tax
payers In the former country IL five times
az great az in the latter This fact Is no
doubt accounted for By the difference In
the exemption-EnsIand exempting nearly
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
THE LAW a DEAD LETTER.

State income taxes have been assessed
In no fewer than twenty states in this
country and now prevail in Massachu-
sets. Louisiana. North and SoIth Caro-
lima. Virginia. Tennessee. oklahoma and
Wisconsin. I'm most of these states how
ever. the law il practically dead letter
and the returns are small
Wisconsin has an income tax Jaw i3s,d
on an amendment 10 the state c0ustitu-
ton. duly contested and upheld in the
courts The assessment under this law
began January !. 1912. and covered the
whole amount of income received during
the year 1911
AS originally drawn" says kossutn
Kent KEENAN,. in an article ON Oh" Wis
consln law i'm Case and Comment the
bill provided for exemptions of 500 for a
single person and $50 for husband ana
wife hut the socialistic element IN the
Legislature demanded much hl-her eX-
emptions, and az It's vote was needed 10
order 10 pass the bill the higher figures
were agreed upon as a compromist
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
THIS CITIZEN
N7UcZ .S7EP UP
HND NHV

way each with nearly $1,000. 900. These
ten countries together raised about $780,
100000. or about o. per cent of the whole
amount
THE amount raised by taxation of in
comes is sometimes compared with total
revenue, but the results obtained have
an uncertain value by reason OF the
fact that many countries have large
gross receipts accruing from railroads
and other public utilities. while in
others the only sources Of revenue are
direct and indirect taxes. IL has, there
fore. seemed that comparison with the
total amount raised by direct taxation
would be Of more significance. \ tabula-
ton OF the statistics obtainable on this
point in thirty-seven countries discloses
the fact that the income tax contributed
almost exactly 30 per cent Of the total
amount raised by taxation. The percent
ages are highest in the minor German
states. sometimes exceeding so per cent
"A comparison Of the exemptions in va
rious countries cannot be made with alb
solutc accuracy owing To diversity Of
methods. For example. in some states the
tain sum shall be exempt. while all above
that sum shall be taxed at their full
amount. In some countries, also, az in
Denmark and Norway. the amount of en-
emption is variable according to the num-
Der Of dependents the taxlayer has to
support, or the amount OF his income
From tabulation OF hfty-six
countries II appears that the average
amount deemed To be necessary as a mini
mum OF existence and. therefore, exempt
at the foot of the scale. is s40j 30 IT,
however. these flfty-six countries are Iii
Weed into two groups. the first to con-
sist OF England. fourteen of her colonies
and Hawaii. and the second composed of
the countries and states OF Continental
Europe. together with Japan. 1t will he
found that the first. or what might be
called the English speaking. group has
an average exemption OF $l,09s go or, in
round numbers. $,loJ, while the average
Of the second group. comprising forty
countries and political subdivisions. Is
only k159 n
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
RATES IN WISCONSIN.

The Wisconsin rates for individuals
begin with | per cent ON the first NNV
OF taxable income or part Thereof lnd az
vance Ia per cent on all incomes over
$1,000. II will be seen that this ta0ie
has the merit of advancing by easy steps
up 10 t per cent The table NAV
prove misleading at first glance. Each OF
the first $1,000 is considered separately
While the rate prescribed for the hi'n
thousand Is per cent the tax con @''
would be only 50 or ~ per cent 'n ANe
manner the tax On $1,000 would ne 10.
81. per cent OF $1,000 but the mean u
81 per cent and the preceding pei'e"r
ages. or about 30 per cent The eie'.
of this plan is To give sort of 'dihussH
progression To the rates. Compared WIN
the average rates i'm forty foreign coun-
tries. the Wisconsin rates are lower up %
about $1,000 of income, and higher rom
that point forward.
The personal property taxes when are
abolished by the income tax law are those
upon moneys. credits. stocks, bonds. per-
sonal ornaments, farm, orchard ana sd''
den machinery. implements. etc in'
amount of tax heretofore collected from
such items was about Sl.Scp.09o Inc
exact statistics are not attainable as !''
but it is known that the amount oi III
come tax levied Is approximately SS'#"'
600, of which nearly tWo-thirGs Is a.
sessed To the corporations. This aniouh'
largely exceeds the total collected Tor "
whole United States In 1853 by the -
years administration of the tlvis w"
income tax. Ii is about double the amouh'
heretofore raised in Wisconsin by the
taxation of those items OF personal PROV
erty now exempted. II sh"uId
understood. however. that the aclua
Yield OF the tax will bee reduced possio''
- per cent. by the offsettinS OF persohS'
property receipts. Under the terms "i III.
law 10 per cent OF the revenue derN'
from the tax is retained by the SUI"
and is applied. so far as necessary
the expenses OF administration, such eN
penses being borne wholly by the s'ae'
20 per cent goes to the county ana I" p''
cent to the town, city or village IN ""''
the tax was assessed. levied and coiIe0u''.
1t thus appears that while the income va
Is administered and assessed as II II "'''
state tax. the proceeds are reiundeu 2"
the localities from which they enla'"''
with the exception of percentage
tanned by the state to cover the expense
Of administration.
The population Of Wisconsin Is -'S'o''''
The number of individuals, firms s"
who were required TO make income '"
returns was about 1900, or ~ per ecu.
However. more than three-fourtns
these did not come within the scope "
the law, and those actually paying INC :"
come tax were less than ! per cent Oh wv
total population. The number OF corpo's
lions taxed was 9.i2s The law Is e''
crate In its provisions. There are penA
ties for failure To make and file returns
as also for false returns. All officials ar
required to preserve secrecy resa'o"'
the contents of the returns.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

$500 while the amount exempted in Prus-
Sla is only s2ii. . OF the 10000 in
come tax payers in Prussia almost 90 per
cent are assessed for annual incomes of
loss than s,li. while only per cent have
incomes exceeding $3.50. In Austria 81
per cent Of the income tax payers are as
s.ssed for incomes OF less than ssh and
~ per cent for incomes OF less than $500
But IL must rot be supposed that the
amount of taxes paid bears any fixed re-
lation To the number Of persons assessed.
As a matter Of fact. the ; per cent OF IN .
population who have incomes over s. 500
pay - per cent of the whole tax. .
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

the next income tax law in the United
States ought to be the result Of careful
study of those income tax laws which
have been most successful and a careful
observation of the points in which they
have shown themselves 10 be weak.
1t will not do To follow slavlshly any
foreign model for regard must be had not
only TO commercial and financial condl-
tiCns. but also To the previous habits ana
modes of thought of our people.
while the Prussian income tax is said
to work exceedingly well in Prussia, II Is
not at all in accord with anything 10
which citizens Of the United States are
accustomed. For example. under the
Prussian law every person in receipt Of
an income in excess of $50 is required 10
make declaration on special forms, within
a limited time Th5fwhole scheme of the
tax is based on elaborate individual aiii-
davits The number of persons paying an
income tax in Prussia is over 10 per cent
of the total population. whereas in the
United States from 1851 TO 1870 the average
number who paid an income tax was
about two-thirdS of per cent of the pop
ulation ---
Since the. CIVIL War such changes have
taken place in the methods of doing busi-
ness that conditions are now far more
favorable than they Were then for the
operation of an income tax based on the
best feature of the British income tax,
which is the levy of the tax at source.
The British income tax is not worked out
logically on the taXation-at-source theory.
but is complicated by exemptions and
super taxes which are at variance with
the OBSERVATION-DISCLOSURES method. In spite
OF its complications. the tax is rea-
sonably successful. and more than two
thirds OF the collections are made without
dependence upon declarations by the per
sons assessed.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
Mr.. PURDY'S STATEMENT.

when the question Of ratifyins the
sixteenth Amendment of the Constitution
of the United States permitting the fed
cral government TO impose tax on in
comes from whatever source derived
was under consideration, several objec-
lions were made to the amendment Gov
ernor Hughes objected that the broad
scope of the amendment permitted the
federal government 10 tax the income
from state and municipal bonds. Another
objection made was based upon the lack
OF success attending the imposition OF
income taxes by several of our states. the
unsatisfactory result of the federal in
come tax levied during the Civil War and
the miserable failure of the general prop
crty tax levied on personal property.
OBJECTIONS made to an income tax per
80. based on the lack Of success hereto
fore achieved in this country, lose their
force in the light Of the experience Of
other countries, especially Great Britain
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

1T should be explained that the per-
centages given above are somewhat lower
than they would be II the rates on all in
comes had been taken into consideration.
In many countries higher rates are levied
upon income from capital or investUents
than upon income from labor, but not
every country makes this distinction. and
T. has. therefore. seemed best. In order To
reach common and uniform basis. To
confne the calculations to the rates fixed
for incomes arising from personal ex-
ertion
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

report it's total disbursements of interest
ana dividends and would be required TO
deduct the amount of the tax from such
disbursements so that the corporation
would pay ON behalf of every bondholder
ana every stakeholder the amount of the
tax to be paid by them in respect Of their
interest and dividends. IT, as is much to
he desired, ii is competent for the United
states TO so provide. every municipal cor
poration and state In the Union would
also be required to deduct the tax from
payments of interest and payments of
salaries above a certain amount. say
sl,9o Every employer would be required
10 deduct the tax on salaries
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
COLLECTION AT SOURCE.

The general theory of the collection Of
an income tax at source is the require
ment that every natural person and cor
Ioration paying income 20 another shall
pay the tax for the account Of the person
to whom the income is paid. For exam
pie, in 1902 tax was imposed upon Brit
ish incomes aggregating about three and
a half billion dollars. without the neces-
sity for any declaration 10y the taxpayer.
The most important items of this great
sum We're dividends and interest paid by
corporations and municipal authorities
and rents derived from real estate
"A simple and practical form Of income
tax in the United States would contain
practically no exemptions and require no
declarations on the part of the taxpayer.
Every corporation would be required 10
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

taxa,ion of income by cities ana COM
muues. Allusion is often made 10 tue
Australian the Swiss and the German III
come taxes. hut. as has already been
nointed ONT. neither the Australian COM
monwealth. the Swiss confederation Ho'
the German empire levies any income 'aN'
"In the Australian states ana Ne" Ne"-
land the methods in vogue are character
lied by high exemptions, abruptly eraueu
rates. combinations with single LAX anu
sharp differentiation in favor OF incomes
from nersoual exertiOn as against IN
comes from property and earnings al cor
nora,ione In Japan on the other hand.
there is q very small exemption ana
lower rate for corporations than for lhoi-
yiduals. In England and several OF her
colonies. as lsc in laval, there Is ten
dency TO high exemptions and proper
tional or slightly graduated scales "i
rates. The principle of collection OF IL
come AT the source has been developed
more thoroughly in England than In any
other county.
"I-pon the European Continent IL VIII
be found that uniformly low exemptions,
m'uutcly graded sca,es of rates ana clad
crate systems Of differentiation are the
most characteristic features. In the ma
iority of the Continental states the tax
upon each grade of income is not Ger
tain percentage of the income in that
grade. hut fixed amount which is prac-
tically equivalent In each grade to tn"
amount which would result from grad
ually increasing rorcentI1l rate.
I'm few cases a uniform rate is pro-
vided which Is rendered progressive by an
ingenious system of diminishing abate-
ments in the lower part Of the scale aud
a series of increasing additions TO the
higher grades. This method has been
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
INCOME TAX AMENDMENT.

There is actually going to be an in
come tax in this country. We have had
none since the Civil War. In 1891, the
Supreme Court of the United States de-
cIared an income tax law unconstitutional
About three years ago an amendment to
the constitution in favor of the income
fax was submitted TO the state legisla-
lures. A few days ago large majority
of the states had ratified the amendment
which is Article XVI of the Constitution
and says. The Congress shall have pc"
er to lay and collect taxes on incomes
from whatever source derived, without
apportionment among the states ana
without regard TO any census or enum-
Grafton"
The forthcoming extra session OF Con
gress is expected TO pass an income tax
bill designed 10 raise annually at least
sico 90. 600 This will permit the slashlns
of the tariff and the abolition of the cor
poration tax law. 1t has been proposed
that incomes below 5000 "a year be eX-
empt and that incomes above that figure
be taxed per cent if earned. and a high
er graduated tax imposed on Incomes
from swollen fortunes and large real es-
tate holdings" BY collecting the tax at
the source Of income many difficulties
and embarrassments will he avoided.
REPRESENTATIVE Hull is scheduled to draft
an income tax bill for the Ways and
Means Committee.
Lawson Purdy. president of the New
York Tax Commission made the follow
ine statement OF his views on the income
fix for The Tribune.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

The failure of the general property tax
on personal property has very little bear
generally amounts 10 an income tax OF
over 30 per cent and frequently of over 80
per cent. and depends exclusively upon
the AFFIDAVIT Of the person assessed.
There Is no probability that any income
tax ever could be successful which at
tempted TO take half Of any ones income.
THE civil War income tax H. generally
regarded as a very crude piece Of work.
In drafting IL little benefit seems 10 have
been derived from the experience of other
Countries. Since then much experience
has been gained In many countries. and
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16

carried to greater lengths in Sweden than
in any other country. prominent feat
IRE OF the Continental methods is the sup
Elementary tax, which is usually levied at
"A low rate on the total wealth OF the tax
payer. The combination Of this tax with
the income tax H. often described as an
income and property tax although the
expression Is somewhat Inaccurate and
| misleading. Spain and italy have what
might be termed partial income taxes. as
, the profits from real estate are not treated
as Income. but are supposed To be reached
by the general land tax"
composite table of the income tax
rates In forty foreign countries is as fol-
lows:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
NC0NW TAXTS THEORY HISTORY AND MODES OF COLLECTION

English Empire begin at L'6 per cen,
ON $500 income and end at 3.2S per cent
on 100000 while the Continental group
start at las per cent on $500 ana emu Al
4.1s per cent on 100000. Japan mas eA-
ceptonally high rates, beginning az taA
Of sl7 20 on $500 income and ending AZ
s2O.35O on 100000
'"rhe amount of income tax coilected
IN all countries I'm the year 1908 was, IN
round figures. s413.0Oo,00o In TINS re-
spect England stands at the head "i,H
1856, 100000. Prussia was second WIN
about SIS 200. 900; Italy third. with nearly
$50. 600. 900: Spain. s1S.00o.0oo: Japan
sl3. 500. 900; SaXony, sl2.215,Ooo' Austria
s19, goo. O0o. and Holland, India and NOT
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-16
ONE ADVANTAGE.

II the United States Is in tie near
future to impose an income tax al all.
and personally | hope IL will, the i'm
portant point for those who draft the act
to consider carefully is that the United
States should take advantage now of the
very best experience the world has to
offer"
The following are extracts from work
entitled Income Taxation. Methods and
Results in Various Countries" by Kos
suth Kent KEENAN,. who is in charge OF