The Washington herald., 1915-12-20
Operation Of The Income Tax.

liz was necessary to amend the Constitution of the
United States. 1t required many years of agita-
lton and several years of legislative action BY
Congress and the State legislatures to secure that
amendment The employment of the greatest
political machinery in the government has always
been considered necessary only to accomplish
great and fundamental results. The income tax
was presented as a great and fundamental change
in revenue system; touching the nation; but
does the result bear out that presentation!
The report of the Commissioner Of Internal
Revenue does not indicate that the income tax is
national, touching majority or even respectable
minority of the American people. Nor does 1t
Ireach the wealth of the people. There were 3S7,-
SIS returns made to the commissioner on the in
dividual income tax last year. That was about one
third of per cent of the population of the United
States, and less than per cent of the families.
The result is not important as national taxation,
brought about by change in the system OF Federal
taxation to which there had to be radical
change in the Constitution. Few of the advocates
of this change in the Constitution would have ven
tured to demand it just to reach onc-third OF
per cent of the American. people or less than :
per cent of the families in the United States.
The commissioners report shows another ap-
parent inequality in the operation of the income
tax. One-half of all the returns came from four
States. Massachusetts,. New York. Pennsylvania
and Illinois These four States have little more
than one-fourth of the population of the United
States, but they furnished onc-half of the income
tax returns and two-thirds of the amount collect
cd by that tax. The other forty-four States and
four Territories furnished the other half OF the re-
turns and oneGourth of the money collected as an
income tax. Such proposition, to tax ono section
of the country to pay the expenses of the Federal
government, made as excuse for amending the
Constitution would have been considered sectional
as sectional the proposition to tax slaves IN
the carly days of the republic. But that is the
result of this change and the legislation which fol-
lowed as indicated blythe report of the Commits
sioner of Internal Revenue.
This tax appears to have been largely paid in
the cities just where all the other Federal taxes
are paid. These four States, Massachusetts,, New
York, Pennsylvania and Illinois, all industrial and
URBAN paid two-thirds of all the internal revenues
The whole amount of internal revenues shown
by the Commissioners report was Sal 100000 and
thirds of that paid in the four States men.
toned 1t would not require much calculation to
snow that inc SICdtcl pat vi thS SuStoihS toNSS
was also paid in the same States if we are to ac
cept the argument that the consumer pays that
itax.
One argument in favor of the income tax was
that it was necessary to reach the wealth OF the
country. But this report shows that iowa paid
one-tenth as much income tax did Massachu-
setts, and the census bulletin wealth credits
Iowa with SI,5oo,ooo wealth than
Massachusetts,. Did the wealth OF Massachusetts,
paid pas in 1owas H. four States named possessed
about onc-thrd of the wealth and paid more than
two-thirds of the income tax. Iowa and Kansas
together have about one-half the population of
New York and nearly one-half much wealth,
but these two States paid less than one-ffteenth
as much income tax as New,York paid.
The wealth of this country is not all in the
cities however. the Farmers Friend so represents
lit Two-thirds of total wealth is in real prop
erty. in land and the improvements the land
This is becoming more and more apparent each
wear and today we have more than $4,000, ,ooo-
600 of our wealth in land and the improvements
on it: but when Congress is looking for more reve-
nue. it generally turns away from the land and looks
for some industrial community and the people who
live by that industry to tax. Whether the exemp-
tions in the income tax shall be lowered to catch
more income producers and increase the revenues,
may be debatable question; but when Congress
again gets to t;nkering this income tax law, it
might be we'll to study the report of the Commits
sioner Of Internal Revenue and the census reports
to see just where the real wealth of the country
lis and who pays the income tax.