Page 51

1886

Some Views on Taxation

BY HENRY C. HALLOWELL.

A keen observer has said that the
world is governed as well as it wishes to
be. Lafayette put the same idea in
another form when he said: "For a
nation to be free, it is sufficient that
she wills it." To accomplish any reform
therefore, the first step requisite
is to enlighten the great body of the
population, and to show that the changes
sought are founded on reason and justice.
The people at large do not interest
themselves very deeply in abstract
or theoretical rights, but if convinced
that certain measures are injurious or
beneficial to their prosperity and happiness,
they will soon arouse themselves
to repeal the one or enforce the other.
Far be it from me to awaken animosity
against any class or corporation, particularly
such powerful aids to civilization
as railroads, telegraphs and the like.
My only aim is to endeavor to see in
what manner they may bear an equitable
portion of the burden of taxation.
In their early days when success was
uncertain and the risk of pecuinary [pecuniary] loss
was great, it was wise in Legislatures to
give them aid. When in our own State
this aid took the form of exemption
from taxation, a railroad was simply a
line of rails between two points with an
office and epot at either end. Their
wonderful growth was never dreamed
of, and there was no intention of extending
the exemption to all the vast
paraphernalia now claimed as free "under
charter." Senator Peter in some
recent remarks stated for example, that
the palatial building on Baltimore street
erected by the B. & O. R. R. at a cost of
a million of dollars is free from taxation
although the ground and buildings
on it, when private property were assessed
and taxed.

A corporation which is adding to its
sinking fund, ramifying in every direction
and can still from its earnings, pay
7 per cent dividends in semi-annual instalments
to its stockholders, ought
surely to bear a large portion of the
burden of taxation, even if it results in
paying somewhat smaller dividends to
stockholders, most of them already
affluent. The farmer is scarcely at
present laying aside money for buying
more land (his sinking fund) extending
his field of operations, and at the same
time investing 7 per cent in bonds and
stocks, (his dividend from earnings,)
yet no property of his "plant" escapes
the assessor! Nor is it better with the
mechanic, storekeeper or professional
man.

A recent writer in the Popular Science
Monthly, Mr. Henry James TenEyck,
has stated some facts so forcibly and
brought the subject so clearly into view,
that I cannot do better than quote from
his article, on "Recent Experiments in
State Taxation."

"To growl is the privilege of the taxpayer.
To secure the entire amount of
the necessary revenue with the smallest
growl is the aim of the legislator. Probably
there is no more unpopular official
than the tax-gather. Among persons of
property the idea seems to prevail that
taxation is a kind of robbery which is
to be evaded if possible. It is
true that the public treasury has
often benefited simply that thieves
might plunder it, or that worthless
citizens might be supported at public
expense, as a reward for their political
work. This is the case particularly
in the administration of municipal affairs.
The national and State governments
have been conducted, in spite of
the observance of the odious spoils system,
with an efficiency and economy unequaled
by but few great business
houses. Even better service would undoubtedly
be obtained if the public had
a fuller appreciation of the truth of the
old paradox that the dearest labor is the
cheapest. More liberal salaries for positions
of trust and executive control
would tend to elevate decidedly the
standard and ability of the men in the
public service. But, unfortunately,
propositions of this character do not
meet with general approval. The vulnerable
spot of the American is his
pocket book. When an official lays his
hand on that, the victim resents the
attack with indignation, and submits,
after loud protestations and threats, to
the demand for his money, only out of
respect for the superior power of the
law. The dominant party, in attempting
to carry on the government satisfactorily,
and at the same time, not arouse
the voter who pays the taxes, has a difficult
problem to solve. In the United
States, where the voter is the ruler, political
managers find it essential to continued
success to make drafts on the
ruler's pocket book as light as possible.
All parties would be happy if the public
treasury could be filled by the touch of
a magician's wand, so that taxes might
be abolished. But, as they are a necessary
evil, a scheme of taxation without
lamentation is what is wanted. In the
law laid down by Professor William G.
Sumner, that taxation tends to diffuse
itself, but on the line of least resistance,
is found a limit for the basis of this
scheme. Turgot, the great French financier,
expressed the politician's idea
very tersely when he said that the
science of taxation is to pluck the
goose without making it cry. In hunting
for the line of least resistance, and
the most scientific methods of plucking,
several interesting experiments had
been made of late in different States,
where new sources of revenue had been
sought from special taxes on corporation,
railroads, telegraph, telephone,
and insurance companies, collateral inheritances,
and other classes of property
which can be plucked without producing
a cry liable to strike a chord of sympathy
in the popular heart. In most in-