Evening star., 1938-02-20


to be published on successive Sun
days. They are designed to glue an
outline OF the history. background
and status OF the national tar
system.
BY w. B. RAGSDALE,
Associated Press Stan Writer.
Fifty-seven of the Nations first ~
years were free from Federal taxes.
During that period it lived wholly
from customs duties on goods from
foreign countries.
Not until 1t had been torn apart by
the Civil War and put to the expense
of keeping an army in the field did
the Federal Government set out
seriously upon the job OF raising money
by internal taxation. Even then, 1t
held back until the bankers were
clamoring that the citizens were
anxious to pay taxes to secure the
loans the bankers had made.
When Alexander Hamilton took over
the task of paying the debts Of the
bankrupt young republic. he worked
out modest system of internal rev.
enues to supplement the money raised
by customs duties. They were a set
Of miscellaneous taxes. Their backlog
was levy upon liquor and tobacco.
In 1900, the Republicans came surg
ing into the Capital under Thomas
Jefferson. They threw out the Hamil-
tonian system and installed q policy
OF living wholly of the revenue from
tariff duties. Save for one brief excur-
sion into the field of internal taxes
during the War Of 1912, this policy
ruled the Government until 1862.
Liquor and Tobacco Taxed.
Liquor. tobacco and taxes on the
odds and ends of trade made up the
levies Of 1872. They were the first
to come in again in 1862. The taxes
on liquor and tobacco alone brought
in over billion dollars last year.
The whole list of miscellaneous taxes
supplies we'll over third of the ma
tional revenue.
Save for theaters and amusements,
few places Of business make these taxes
blatantly apparent. Most of them are
we'll buried beneath a round figured
purchase price that includes the tax
They are passed along to the consumer,
out his attention is not called to that
fact. Some are collected at the source
from the manufacturer. Some are in
dicated by stamps attached to the ar
ticle.
Invariably. since their origin. these
taxes have been actuated wholly by q
need for Federal revenue. They mas
querade under many excise,
sales, miscellaneous-but the purpose
back of them is the same. They have
risen and fallen. been more numerous
or less, according to the needs Of the
Government at the time. Other taxes
may have been blended with social
or regulatory purposes, but these have
been a pure distillation from needs.
Tax experts say that whatever the
name they are called by, these are
still sales taxes. s.
Collection Troubles.
Numerous collection troubles have
come up. Some concerns set up sub
sidiaries to trim or side-step taxes. A
few have got around exemptions by
billing the customer for two articles
worth hundred dollars instead of
one which at that price would be tax
able. It has been hard, sometimes,
to decide when sweater was wearing
apparel and when it was part Of an
athletic uniform. As the former 1t Is
not taxable; as the latter it Is.
All these things were simpler when
Hamilton worked out his plan, but he
had other troubles just as acute. One
Of the loudest complaints against Eng
land had been taxes. Yet, the Con-
federation of States had failed BE-
cause the general Government owed
lot Of money and had no way OF pay
ing it. The States had denied the
Federal Government any taxing power.
This had been remedied by the
new Constitution. But all were wary
OF this new power. James Madisons
first thought was for . duty on i'm
ports. Hamilton wanted to supple
ment this with . tax on wines and
liquors. He advocated such . tax in
one Of hts first reports.
Hamilton did not get the excuses
the first time he asked for them. He
was soon asking again, coupling them,
also, with taxes on snuff, tobacco,
carriages, sales at auction and licenses
for the practice Of Law. This time he
had figures to show why the customs
duties were not enough. He got more
taxes.
TIE feeling against the taxes was
especially strong In Pennsylvania and
the mountains Of Kentucky, Virginia
and North Carolina. In Western Penn
sylvania indignation meetings were
held, resolutions adopted, . tax col
lector tarred and feathered. and armed
resistance arose. Troops were sent IN
and the WhislU sabellton waS ~