A NATIONAL INCOME TAX. Under the Constitution of the United State there ex'st in this country a national governmeut acc governn^ients of the several states of the Union. Fo the support of these two kinds of government ther exist also two kinds of taxation in this country, na tion^l and state taxation. The following lines wil trei^d of the national taxation of the United State that comprises at present import duties and internal revenue taxes. The system of levying duties on foreign importet goods, for defraying the expenses of the national gov ^ ernment — the payment of the interest on the publi IP debt and of this debt itself included, — is as old i this country, as the government under the Consti tution. Yet, such import duties are plainly no correct for this free country. They unjustly increas IcT the consumer in the United States the price o iported goods, on which they are levied, and a the price of domestic commodities o because the American producer JJ, as ^ matter of course, always as 3od8, as he can receive fo therefore, must pa iuties are levie feiii^d^ia^pay f 2 The worst kind of import duties are those levied ODder a so-called protective tariff, as it now exists in the Uuited States The object of such a tariff is, at the expense of the rest of the American people, finan- cially to benefit the producers or manufacturers of certain domestic commodities. Those men, by such a tariff, shall be protected against foreign competi- tition in this country, in other words, against low prices of their goods. The Declaration of Independence of the United States has established the principle of equal rights to all, before the law, as the corner-stone o£ American freedom. Under this principle Congress has no right, by a protective tariff, to enrich, at the expense of their fellow^citizens, certain producers or manufac- turers of this country. Then, the Constitution of the United States says: “The Congress shall have power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defence and general welfare of the United States; but all duties, imposts, and excises shall be uniform throughout the United States.” This clause clearly shows, that the establishment of a protective tariff is beyond the Constitutional power of Congress, which • has the taxing power only for the financial support of the national government of this country, — en- abling it to defray all its legitimate expendituret,, — but not for the purpose of favoring the pecuniary in- terests of certain classes of citizens of this country. Under the Constitutional clause quoted, such special pecuniary interests cannot be considered as the gen- eral welfare of this country. American mechanic and manufacturing industry, by the good qualities and cheap prices of its produc- tions, should protect itself, both at home and abroad, against the competition of foreign industry. More- over, self-respect, energy, and economy should cause the American people, financially, industrially, and 3 commercially to emancipate themselves from Europe as soon and as completely as possible. For defraying the expenditures of the national government of the United States, there exist also in- ternal-revenue taxes in this country, being levied on the following articles of home produciion: DisUiled spirits, fermented liquors, manufactured tobacco, and oleomargarine. Wine, produced in this country, is exempt from such taxation. As these taxes affect, as public burdens, exclusively the producers and con- sumers of the articles stated of domestic origin, they plainly violate the American pririciple of equal rights to all, before the law. Both the import duties and the internal-revenue taxes, forming the two principal sources of the rove nues of the national government of the United States, are doubtless erroneous systems of taxation for this free country. As to the internal-revenue taxes it may be said yet, that neither of the two sorts of lux- uries taxed,— tobacco and alcoholic beverages, (dis- tilled spirits and fermented liquors,'— srems to be worth a high price, and that self-respect and common sense, nothing else, should cause the American peo- ple to abstain from an improper use of alcoholic bev- erages of every kind and to prove a sober nation. The national government of this country must, of course, be supplied by the American people with the necessary revenue, to perform its duties under the Constitution and the laws of the United States, which, duties include the payment of the interest on the public debt and the final payment of this debt itself. The Constitution, therefore, by the clause quoted before, gives Congress the taxing power, for this purpose. Both the customs system acd the in- ternal-revenue system being wrong and unjust, as shown before, another kind of national taxation seems to be necessary for this country. Which shall it be? The Constitution, by the provision quoted, entirely leaves it to Congress, to determine the ways and 4 means, by which the revenue necessary for the sup- port of the national government of this country shall 'be raisfd The customs and internal-revenue sys- tems, tnerefore, may be completely abolished. In answer to the question, which other kind of national taxation, in their stead, shall be Rd^pted by the American people, the following suggestions may be ventured. It seems, that the most correct, natural, and log- ical national tax for the^ American people is one re- lating to the net annual income of every American citizen and resident alien, namely an annual individ- ual inome-tax. Such a tax would be in full har- mony with the Constitution, as quoted before. Under such a system of taxation, every head of a family or other male or female person in this country, having an income of his or her own, should by law be bound, annually to pay a certain percentage of his or her net income, reaching a certain sum, for the support of the national government of this country. From this tax all persons should be exempt, not having a net an- nual income of a certain amount, Congress might see fit to fix f r this purpose, perhaps of five hundred dollars or of any other small or moderate sum. All public officers of the legislative, executive, and judic- ial branches of the national goverum^ent of the United States might, as to their salaries or emolu- ments, they receive as such officers, but, of course, only as to them, also be exempted from this tax, in order that these their salaries or emoluments might prove real. A man’s net annual income consists of what he acquires, in the course of a year, by his busi- ness and from other sources, inherited property, for instance, included, after deduction of all his business expenditures and of his state and local taxes. Per- sonal and family expenses would, of course, belong to and be included in a net annual income, for the purpose of taxation, and could not be deducted from it. The percentage for levying such an income-tax 5 should be strictly uniform for every taxpayer, in other words, for every dollar of income taxed. By this proposition the following is meant. If, for in^ stance, a net annual income of one thousand dollars would pay a tax of fifty dollars, a net annual income of two thousand dollars should pay a tax of one bun dred dollars, a net annual income of three thousand dollars a tax of one hundred and fifty dollars, a net annual income of ten thousand dollars a tax of five hundred dollars, and so on. This would be a simple income-tax, increasing in the natural order of num- bers and taxing every dollar of net taxable incomes, high or low, alike. Thus, every dollar of the four incomes named would pay a tax of five cents and neither more nor less. This would be the only just kind of an income-tax, under the American principle of equal rights to all, before the law. A man with a larger net annual income plainly claims and enjoys for it the protection of the national government, for which in troth ail national taxes are paid, to a larger extent, than a man with a smaller net annual income. For this reason, if the two incomes be taxa- ble, the former should surely pay more tax^ than the latter, but on a strictly and absolutely equal basis, every dollar of both incomes paying exactly the same amount of tax, or the same rate. A so-called graduated income-tax, increasing in any other way, than in the natural order of numbers, and according to which the dollar of net taxable in- comes of different amounts would be differently taxed, that is, the dollar of larger net taxable incomes grad- ually higher, than the dollar of smaller net taxable incomes, would be a violation of the American prin- ciple referred to and wrong and unjust. It would rob the few for the benefit of the many. It, only in- versely, would do the same thing, the protective tariff of this country is plainly doing now, that robs the many for the benefit of the few. It would, so to say, punish men for being wealthy, which would be the 6 most senseless thing in the world. There are, it is true, men with colossal fortunes in this country. Yet, for this fact not those men, owning their riches legit- imately, are responsible or to be blamed, but the er- roneous political economy of this country urgently requiring a change. By a graduated income-tax, wiibout a manifest wrong, the great riches in the hands of individual citizens of the United States could not be taken away from them. On the other hand, a simple, not graduated income-tax would have the effect, that the richest men of this country, the railroad magnates, the wealthy owners of mines of every kind, the proprietors of extensive real estate in the large cities, the great manufacturers and other opulent persons, would in a direct manner have to contribute annually certain, by no means trifling shares of their net incomes, for the support of the national government, which is not the case now, with the exception of those paying internal-revenue taxes. For the collection of the income-tax, proposed to become the sole national tax of this country, the fol- lowing course may be suggested. Every net annual income of tbe head of a family or of any other per- son, having such an income of his own, in order to be flxed and ascertained, under this system of taxation, should, by the person receiving the income, be sworn to in a lump, not in detail, and not be proved other- wise, except the person be charged with having com- mitted perjury in this respect. Every income to be sworn to would always be that of the last calendar year. If the person referred to be a minor or other- wise legally incapacitated, to do this himself, the oath would have to be taken and the income-tax to be paid for him by bis guardian. Tbe < fficial lists of tbe net annual incomes sworn to should be accessible for in- spection to every one, having a net taxable income and whose own name would be on the lists. Perjury committed with regard to an income sworn to, should, after conviction of the defendant, be punished as in 7 other cases. Governmeot officers, appoiiited for this purpose throughout the Uniou, by states, territories, and districts, perhaps best by congressional districts, should annually, during a certain period of the year, in the manner stated, by administering the neceaeary oaths, ascertain the amounts of all the net taxable incomes within their respective districts, enter these incomes, together with the names of the recipients, into officii! lists and send copies of these lists, con- tainiuK the several net taxable incomes and their sum total, to the Secretaiy of the Treasury. All this should be done up to a cer tain date. After the Congress of the United States would have annually made all the appropriations neces- sary for the expenditures of the national govern- ment of this country, during the succeeding fiscal year, from July 1st of the current to June 30, inclu- sive, of the next calendar year, it should be ihe legal duty of the Secretary of the Treasury to ascertain the sum total of the appropriations stated. By this sum he should divide, the total amount of all the net taxable incomes, throughout the Union, reported to him, as stated before, in order to ascertain their per- centage required as income-tax, fjr defraying the' expenditures |of the national governmer.t of this country, during the fortbcoming fiscal }ear. This percentage, together with a statement of the sum to- tal of all net taxable incomes, throughout the Union, reported to him, should be transmitted by him to Congress, whereupon the laUer, by an act, would have finally to fix the income tax,--a8 j^uniform per- centage of every net taxable income, rep<‘rted throughout the land, — tf*be levied during the forth- coming fiscal year. Fo^ the greater safety of the government, as to the funds necessary for its expen- ditures, the percentage stated might be annually fixed, by Congress, slifelitly higher, than it would be necessary according to a strict arithmetical calcula- tion. The percentage, for levying the income-tax. 8 having been fixed by law, this tax should be collected by another class of governtnent f flScers, appointed for this purpose throughout the Union, by states, terri- tories, and districts, perhaps also best by Congres- sional districts. The tax should be collected by them, wife n their respective districts, during a certain time of the year and promptly be paid by them into the United States Treasury. The adoption of the income-tax suggested for this country would, of course, necessitate the appoint- ment of a large number of new revenue officers of the national government. Yet, by the abolition of the custom-houses and internal revenue offices, an equally large, if not a larger number of the present revenue officers of the national government of the United States wojbld become superfluous, their servi- ces coming to an end. According to the last annual report of the Register of the United States Treasury, the total number of ^e^rsons employed in the customs servic^^ of this country, during the fiscal year ending June 30 189^, was 6,039; and, according to the last annual report of the United States Commissioner of Internal R^^venue, the total number of persons em- ployed for the collection of such revenue in this country, during the fiscal year stated, was 8,730, irre- spective of 409^ persens em played, for a short period, wHb regard to the payment of the'sngar bounty. The system of a single and uniform national tix, in the shape of an income-tax, for tte Union, would, with the exception of one poir^t, not present any real or essential difficulties. Thie point is the 'fact, that pv^ry Congress of the United States, constitutionally lasting two years, consists of two regular sessions, a long one, beginning on the first Monday in December of the firot year, and a short one, beginning on the first Monday in December of tbe second year. The former session has no fixed limit and regularly ex- tends beyond the 30th day of June, the end of the re- spective fiscal year, while the latter always comes to 9 an end on the 4th day of March, on which day every other year the term of Congress and every fourth year the term of the Presidency and Vice-Presidency of the United States expires. The short session would cause difficulties, every other year, as to the period required for ascertaining all net taxable in- comes throughout the Union and for fixing the per- centage as to the income-tax, because these matteis could not be accomplished, in the manner suggested before, from the l«t dav of January to the 4th day of March, as it would b^com^ necessary. This incon- venience, however, could be removed, if, by an amendment to the Constitution of the United States, both the term of Congress and that of the Presidency and Vice-Presidency of the United States would come to an end and respectively commence, at noon, on the first day of July, the first day of the fiscal year of this country, instead of at noon, on the fourth day of March. This would doubtless be a logical and in many respects a practical amendment of the fundamental law named. After the adoption of such a Constitutional amendment, the revenue officers mention^^d before, ascertaining the net taxable in- comes throughout the Union, should annually do this, within their respective districts, from the 1st day of January to the 31st day of May and report, as stated before, the net taxable incomes ascertained by them to the Secretary of the Treasury on, or if pos- sible, before the day last-named. Furthermore, they should provide the revenue officers of their respective districts, collecting the income tax, with the neces- sary lists, copies of their own official lists, containing both the names of the persons having net taxable in- comes and the amount of every such income sworn to. This should be done by them by June 30tb. If Congress, as it should always do, would timely make its annual appropriations for the ensuing fiscal year, the percentage of all net taxable incomes, throughout the Union, for levying the income-tax, could be as- f ¥ 10 rtained by the Secretary of the Treasury and there- ^OD be fixed, by the necessary act of Congress, by ie 30th day of June, the close of the fiscal year. Of is fixed legal percentage the revenue officers, col- lecting the income-tax throughout the Union, should informed at cnee by the Secretary of the Treasury, ereupon they should collect the tax, within their spective districts, for the new fiscal year, during e time from July Ist to December Slst. 'J Surplus amounts of the income tax collected during the preceding fiscal year and receipts of the United States Treasury, during the same period, de- rived from special sources of revenue, for instance, from sales of public lands, would have to be annually deducted by the Secretary of the Treasury from the sum total of the income-tax required for the expen- ditures of the national government of this country, during the subsequent fiscal year In order that the United States Treasury might not be embarrassed in its operations, for want of funds, caused by the non-payment of the income-tax, Congress would have to enact the strictest provisions jn this respect Any person omitting, at the time fixed by law, either to state his income under oath or affirmation, or to pay his income-tax, should by a fine be compelled to do so subsequently. Any person, however, r<=^fu8ing altogethe.r to state his income un- der oath or affirmation, or to pay his income-tax, should by imprisonment be c( mpelled to do so. The foregoing mode suggested of collecting a national in- come-tax in this country would, of course, be greatly improved, in the couiseof time, by the American people, if such an income-tax would be adopted by them as their sole national tax. The abolition of the customs system, by the adoption of a national income-tax, in the manner sta- ted, might perhaps not be welcome to the proprietors of overgrown manufacturing establishments in this country, controlling now thousands of workmen or perhaps, to a certain extent, on a/ co operative basi in different parts of the Union, wliich fact would be blessing to a great many men irf this country. C operation means a perfect union of capital and labc and strictly excludes all enmity between themo the over-grown establishments referred to chiefly ov their capital or financial strength to the protectii tariff of this counfry, that, as shown before, is wion their pr prietors cannot just’ complain of the abolition of the customs 8yste)iU5^t . give way to absolute free-trade in the United State In this/re^ country, the commercial intercourse wii \ foreign countries should, as a matter of course, f also strictly free. There are those, who say that a national inco3a> tax, to be collected as stated, would doubtless caut a ^reat deal of perjury in this country. Yet it is u American tax, which if permanently established ^ the sole national tax of this country, would^6oon d^r the American people truthful as to its paymer •The truthfulness of this free nation, as to payin taxes, can be injuriously affected.only by erroneov taxation, but never by a just, sound, and uniform t8. for the support of a governmenf oi the people, by li people and for the people, as the government of tb United States is this. The American people woai doubtless willingly uphold their national governme/ by paying the most correct and natural tax imaginf ble, the income-tax suggested In doing this, the, would surely obserye what George Washington, i his farewell address, says: “I hold the maxim n less applicable to public than to private affairs, thf honesty is always the best policy.” Indianapolis, Ind., Sept. 1, * 95 .