Evening star., 1933-01-22

only lis. The miscellaneous taxes
brought in $503, 7G0, 900 in the fiscal
year 1882, as compared with S569, AGO.
600 In the fiscal year 1881, decline Of
Sos, 100000.
The tax on cigarettes declined in
yield by lis per cent, ali other tobacco
taxes by only S per cent, the stamp
tax on capital stock transfers by 30.6
per cent. the stamp tax on bonds and
other stamp taxes, including playing
cards. by 209 per cent; the estate tax
by is per cent, and all other internal
revenue by Is per cent.
Total receipts from taxation amount
ed to 81 1888, 700, 900 in 1882, as COM
pared with S2808, 100000 in 1881, q
decrease of S919, ,400, 900 or 1927 per cent
Customs Receipts Decline.
Customs receipts dropped to $327,-
100000 in 1882 from S378, 100000 in
1881, a decrease of S50,000,000 or 1874
per cent. Miscellaneous receipts, due
largely to the failure to collect the for
eign debt payments during the one
year moratorium, dropped to 1892. .500,-
600 in 1882 from $509 100000, a de-
crease of S276,600,0 600 or 543 per cent.
Total ordinary receipts in the fiscal
year 1892 were S2,121 200 900, compared
with $3,317, 100000 in 1881, decrease
Of 81, 1876, 100000, or 361 per cent.
Just why the income tax has not
stood up as consistent revenue pro-
ducer in times of depression is evident
from an examination of figures relat-
ing to incomes.
The number of incomes between S.
600 and $4,000 was reduced by SO per
cent between 1928 and 1880 and by 1877
per cent between 1880 and 1881, the
1881 figure being for earnings of that
year on which taxes were paid in 1892.
The number of incomes between $l0,-
600 and 100000 was reduced by 30.1
per cent between 1928 and 1880 and
by 33.5 per cent between 1880 and 1881.
The number of incomes of 100000
and over was reduced by 81 per cent
between 1928 and 1880 and by 48.9 per
cent between 1880 and 1881.
When incomes of individuals were in
creasing prior to the stock market crash
the additional amounts were subject to
progressively higher rates and the total
tax paid therefore increased more rap
idly than the incomes. Similarly with
the decline in incomes the tax revenue
has dropped more rapidly than the in
comes.
The tax paid on incomes between
$4,000 and $4,000 decreased by 22.3
per cent between 1928 and 1880 and by
29.5 per cent between 1880 and 1881;
incomes between $4,000 and 100000
by 491 per cent between 1928 and 1880
and by 451 per cent between 1890 and
1881; and incomes of 100000 and over
by 66.1 per cent between 1928 and 1880
and by 546 per cent between 1880 and
1891.
The fact that two-thirds Of the de-
cline in individual income tax revenue
between 1928 and 1881 occurred in the
net income classes of 100000 and over
ties insist that little could be accom-
plished by increasing surtaxes. The
surtaxes, which had gradually been re-
Guced In the postwar years to maxi
mum of 20 per cent, were boosted to a
maximum of SIS per cent in the 1882
act.
The returns to be filed in March on
income of the calendar year 1882, which
is the first to be affected by last years
law, will show q further shrinkage in
incomes from 1881. Even under the
increases from ~, and per cent
In normal individual rates and the sharp
increases IN the graduated Surtax rates
and the increase from IL to 13A per
cent in the fiat rate on corporation
earnings under the 1882 act the total
estimated yield for all income taxes for
the fiscal year 1894 Of $1,o10, 900 900 is
considerably less than half the yield
under the much lower rates In the fiscal
year 1928.
In the light Of this demonstration of
the weakness of the income tax system
in times of depression, the supposed ad-
vantages Of such tax are somewhat
neutralized. The final test of tax lies
in its fiscal adequacy.
Held Based on Ability to Pay.
The chief argument for the income
tax has been that it conforms to the
principle Of ability to pay. As direct
tax 1t Is intended to be borne by the
persons on whom 1t Is levied, an objec.
ton to indirect taxes being that they