Evening star., 1924-07-27
AMERICAS MEAL TICKET
is IT'S INCOME TAX UNIT
Since States Ratified Amendment Wealth
of Nation Has Contributed Many
Billions to Government.

from Congress power OF vital i'm
portance to the General Government
and essential to the nations life.
On the other hand. 1t was feared
that the proposed amendment giving
Congress unlimited taxing power
would injure the States, but 1t was
pointed out by constitutional lawyers
that the courts had held repeatedly
that the taxing power of Congress
does not apply to the instrumental
tiles Of the States, and the sixteenth
amendment, notwithstanding the
words. from whatever source de-
rived" was forbidden to apply to
States, municipalities and other civil
subdivisions.
Exemptions Admitted.
In this regard the words from
whatever source derived" are nom
operative. This is why the Federal
Government cannot collect taxes
from incomes derived from State,
municipal or other local inStru
mentalities of local government In
comes of State or municipal officials
State or municipal securities cannot
be taxed by the Federal Government
Such securities are called "tax-ex-
empt" securities, which have caused
80 much discussion in and out of Con-
gress.
The income tax law has changed
the relative Importance of the Fed
eral Governments revenues. From
1900 to 1850 customs receipts aver
aged between 80 and 95 per cent of
the total receipts. From 1860 to 1890
customs receipts were about so per
cent of the total receipts From 1890
to 1912 customs receipts exceeded in
ternal revenue receipts eight times
and internal revenue receipts ex
ceeded customs receipts six times, in
ternal revenue climbing up steadily
and customs receipts declining in
comparison.
In 1913 the tide turned rapidly, and
from that year to 1923. internal reve-
nue. receipts outdistanced customs re-
ceipts. This was due entirely to the
income tax. From 1900 to 1914 the
average annual internal revenue re-
ceipts were about 275.000.00O. There
was a sensational increase for six
years until in 1920 the internal reve-
produced the stupendous. sum of
IS, 407, 100000, Receipts from customs
dwindled into comparative insignif1-
canoe. Five billion dollars in one
year was a startling contribution Of
private wealth to the needs of the
Federal Government. Nothing like
it had ever occurred in the history OF
this or any nation. These vast con-
tributions demonstrate the extent of
the United States and their patriotic
response. This revenue marked the
high tide of federal taxation. 1t re-
ceded somewhat in 1921 and 1922, and
in 1923 receipts from internal revenue
were down to $2.621 600, ,000-stin
vast sum compared with the pre-war
period.
Figures BY Years.
But the story OF patriotic contribu-
tioas and patient endurance of direct
taxes is still more clearly shown in
the record Of personal income taxes
paid into Uncle Sans Treasury. In
1916 personal income taxes collected
amounted to $173,3s6,0o0; in 1918 to
$1,127.721.Oo0; in 1919 to $1.26s,630,oe0;
in 1920 to 81, O75, ,O53. 900. and in 1922 to
1851. .o57. 200. an increase of some
$40, ,O00, 900 over 1921.
The significance of these figures is
that in seven years the income tax
paying proportion of Americas
has paid into the United
States Treasury approximately $6,-
0O0,OO0,000. This Is nearly 10 per
cent of the total accumulated increase
in national wealth during that period.
This was taken out of the private in
comes and earnings of approximately
six and one-haf million people-less
than per cent of the entire popula-
ton. The Bureau of Census estimates
the six and one-half million people
were citizens having incomes from
$4,000 to $4,000, showing how widely
distributed are the taxable incomes
The constantly decreasing number
of appeals of income tax cases made
it imperative for Congress to estab-
lish a board Of tax appeals. consist
ing of IL members, recently appoint
ed and organized. The personal in
come tax has been in operation nearly
II years, and has yielded the United
States Treasury more than seven bill
lion dollars. This sum contributed
largely to the winning of the late
war. to the payment of the enormous
bills contracted in the war and un-
paid after the war. 1t was taken
from the pockets of less than per
cent of the entire population. and is a
glowing tribute to the wealth and
prosperity of the country as WHOLE
Pays Governments Way.
The income tax bureau has been
upon the shoulders of a small proper
tion of the people. 1t has been made
lighter during the past year and will
be still further lightened in the years
to come, according to the Treasury
officials.
President Coolidge says the total
annual expenses of government must
be kept down to 5000, 900, ,oO0, 900 this
next fiscal year. If so, at least one
quarter Of 1t must come from personal
income taxes. In fact the Federal
Government could not raise that
amount of money without q personal
income tax
Dean Andrew F. West OF Prince