THE NATIONAL ISSUE
Arguments on both sides of the question
THE INCOME TAX
1. It has nowhere been contended that at the present time the income
tax is needed for revenue. Our federal coffers are tilled to overflowing; an in
the States the need is not so much for more revenue as for more equality in
taxation. Is it then desirable to levy a tax for purely social purposes? Even if
•re answer this in the affirmative, the further question arises. Would hot this
6ocial end be better attained by a graduated inheritance tax?
2. Should the incometax be a national or a State tax? There are undoubt
edly embarrassments on both sides. If the nation does not need the tax for
revenue purposes, .it may be asked. Why should the tax be .i national tax?
On 1 tie other hand, it is unquestionable that the difficulties of administering
an income tax grow in proportion as the area becomes smaller. The economic
life of the nation has outgrown State barriers, and the dangers of evasion are
multiplied by confining the tax within State lines. IVrhaps a way out of the
difficulty may he found by creating a national income tax, but by providing
that the nation should turn over to each State the proceeds of the tax collected
within that State. This raises the problem not alone of the desirability of
this method, l>ut also of its constitutionality.
.
I ■ ns of the Su]
i ■ nt, or is it ] to devise
•us to Ihe federal i ■• I
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4. How far is the income tax needed t<> round out the American system of
taxation? It is acknowledged <>n all sides that the general property tax is a
failure in our American states and cities.! How far would an income, tax work
The Affirmative
By Benjamin R. Tillman
THE people are bound without delay to consider,
and are now considering, the quest* 'ii of equal
ity in sharing the public burdens and the neces^
sity for relieving the taxpayers from unnecessary or
unjust burdens. The idea that taxation should be
borne largely by capital rather than by labor is
immensely popular, resting as it does upon the solid
foundation that the Government should be sup-
ported by the wealth which receives its protection
and fostering care rather than by labor. The po.ir
man. in the event of war. will have to bear arms to
support tlie Government and defend the nation
without haying any >take in the country, other
than those of the mere citizen whose patriotism and
sense of duty would make him fight.
Justice of the Tax
THE inherent justice of an income tax cannot be
disputed, and its constitutionality was never
questioned until 1 895J when, in reaching its decision,
tiie court, as then constituted; divided four to five.
The four justices who sustained the tax stood by
the decisions of the court for a hundred years,
while the live "who decided it was unconstitutional,
had to override what » ; as thought to be well settled
principles of law. The question is not a practical
one, unless Congress shall reach the conclusion that
... of the court haying been changed
by death and retirement, the constitutionality of
such a law might be sustained at this time There
are many who think that the court itself heeded
amendment rather than the Constitution, because
on the rehearing it was understood that one of the
Justices, who when the case was first argued had
stood for the constitutionality of the law, changed
his opinion. The line then between its constitu
tionality and its unoonstitutionality is not well or
deeply drawn, and would appear by no means to
be indelible.
The arraignment of the majority of the court
in the dissenting opinions of Justices llarlan and
Brown has been rarely, if ever, equaled in severity
by any similar utterances ever made from the su
preme bench, and there can be little doubt that
if a national crisis arose, demanding immense ex
penditures of money; the sentiment of the nation
in favor of an income tax would compel a return to
the original and long sustained attitude of the court
On the subject.
What was once thought by the ruling powers to
An Imprtitial Statement of the Problem
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brought
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The d ■ ■ •
t, musi
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Capital Should Pay
A FUNDAMENTAL American principle is the
equality of opportunity and equality of bur
den Invested capital, aside from paying as taxes
it-, proportionate share of itself for ordinary pur
poses, should be made to contribute to the sup
port of the Government a part of the increment
coming to its owner. A man with one hundred
thousand dollars' income can better afford to
contribute half of that income to the support
of the Government than can a farmer contribute
fifty dollars out of one thousand dollars, derived
wholly from his labor. The first will still have
ample means to live in luxury and reinvest some
of it; the other will have to economize to sup
port and educate his family
Another tiling; immense fortunes are the most
dangerous things in .< Republic, and it will t.tke
both a graduated income tax and a graduated
inheritance tax to prevent the inordinate growth
of wealth in the hands of a few, and to compel
a reasonable redistribution oj' the wealth of the
country.
• in ur i: redited pers >nal pr nd how can 1
: gener il framework oi ■ ix
5. When once this broad question has been in ivered furth
.:i. ii imp< ■• ■ t go to
they i ■ me Am. >ng | '•..■
Shall ; levied in the form oi a direct tax uj>"ii v man ncome,
or shai 1 upon the so which the income i • '.•
tax from the person who receives the income or from the
who pa> me? This : leme during
i] War, h . ':< -r,^ since been abandoned m England The second y
known as ti the-source idea, whereby I tied by
• hedul made 1 he Eng :
ible • ■ Amerii m coi
') The •
. derived fi >m lal>or
and in . pro]
7- '!':■• • .... k j|
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Befi re an ii • • • ■ ■ re in the
I Si ■••■ ;, :• ■•■ ill be i I ■
these point Without a ■•:■••
A. H ;: • !
c mod ■ •:
: .ill
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Mr. Gladstone, 01
>n of Liar During the Civil
War, •■ ! . !'iit
I it was the
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I ion would ,' opposed unless it
. eel high,
t rioted i
tie
Inheritance Tax the Thinj;
Ti iI. Supreme L'ourt i tax to
;real gain would
iduld
eavy taxes
ai le
Such pn •;■ tr
ie exacted a are leemed pri ipei
real h fall h
: ur share to the people ol the nation,
tal in creating it of
i'd
• ta> ■' ■'• '• : ! : •
■ trained body oi permanent otHcials to collect
i pei >ple, nal u rally
I ng i heir private
The honi I ilwa> i pay, the dishonest
■ iuld usually escape Much better that corj»ora-
I be required to pay a dividend tax t"
■. up m inc< >mes.
It is by doing so that Britain realizes such en< irmous
. • ■ ■■ .. Were .slu- to at tempt to
■ dire< I from ea< h individual, it would be
■ iui I lv tive Si> :,!i.Hilil ul- find it
re made I ■ r here is no reas >n firi >r sn
i .-. ii . dividend p t ion can be
tax for t lie
Govei nnieni .
The millionaire is the best bee in the hive <■ :i
He : • also Ihe mi >>? e< onomical
;tnd costs the least to support, for as a rule he con
sumes upon himself ;t smaller percentage "1 his
gatherings than any other member. He t.ikes
honey It would be folly
The Negative
By Andrew Czrncgic