New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-02-04
THE SIXTEENTH AMENDMENT:

4 dark horse won III the race IoI tHc
distinction Of furnishing the deciding
vote in favor Of the Sixteenth Amend
ment Wyoming got in ahead OF New
Mexico and New Jersey. Two years ago
she Tribune's correspondent III Cheyenne
Explained why the Wyoming Legislat-
sure had failed 10 act on the amend
suent by saving that the submission or
hhe new article by Congress had been
entirely overlooked. Wyoming walked
i,n on the last call. however, and has
seized whatever credit may attach to
rounding out the three-fourths total
necessary 10 the ratifying Of the only
change made in the federal COnStitu-
i,ion in the last forty-two years.
Now that the income tax amendment
mas become part of the supreme law
OF the land it is TO be hoped that Con
iyress in exercising the power granted
nv IL will observe certain rational limi-
tations on its use. The Tribune OPP
uosed ratification partly because Of
faults in the form of the amendment
which. in our opinion. should have been
guarded against. Senator Root. Gov
ernor Dix and other advocates Of the
new article have argued that although
the mower it grants IS unlimited Con-
gress might be safely trusted TO live up
10 the traditions and judicial rulings
of the past under which the federal
government has been eStOpped from
irving 10 tax the salaries of state of
ncerS or income derived from state
county and municipal bonds on the
Ground that such taxation is an OBJ
noxiouS interference with the instru-
mentalitieS of the state governments.
/. Congress can. OF course, exempt the
II salaries Ct state officers and income
VI rom state securities as it was com
PEELED to do before the Sixteenth
Amendment was ratified.
II has been said. as if that were con
elusive. that Representatives and Sem
ators in Congress would probably not
DO anything in contravention OF the in
terests of their own states. YET the
Congress which passed the WilsOn-Gor.
man tariff law attempted to tax income
derived from state, county and munich
nal bonds. II is also interesting TO
note that r Washington dispatch 10
The New York Times outlining the
probable provisions Of the income tax
which the next Congress will try 10
pass at the extra session. stated the
amount Of tax which Governor Sulzer
would have to turn In OH his present
salary Democratic House and Sen
ate may be still regardful enough Of
state rights to allow the states TO Oper-
ate their instrumentalities unhampered
by a federal tax. They may remember
that the states are not allowed 10 tax
federal agencies and activities and may
therefore be inclined 10 reciprocate.
But the experience Of 1894 IS moi alto
gether reassuring.
Another abuse of the new power
granted 10 Il which Congress ought 10
avoid would arise from trying 10 TAX
individual income derived from invest
ments in corporations which already
pay an income tax disguised as an ex-
ciSe tax. The Tribune has SAID repeat
edly that the corporation excise tax is
essentially an income tax. and now
that the necessity for legal subterfuge
IL at an end Congress would do well TO
declare the excise tax now collected
from corporations, which is computed
on basis of income, 10 be an out-and-
out income tax. 1t would be wrong 10
ask the corporation 10 pay tax on
it's profits and then to collect another
tax on the diminished dividend re-
ccived by stakeholder.
Let US hope that Congress in en-
pIoying the authority now granted TO il
will religiously remember the promises
OF discretion made in its behalf by
those who drafted aud advocated the
amendment