Democratic Sentinel, Volume 17, Number 43, Rensselaer, Jasper County, 10 November 1893 — FOR AN INCOME TAX. [ARTICLE]

FOR AN INCOME TAX.

SENTIMENT IN its FAVOR IS SPREADING. Con[rewm>» Warner, Who Represents the Wealthiest District In This Country, la In Favor of Taxing Men's Wealth Rather than Their Wants. Tax on Incomes. In the face of a prospective deficit of $70,000,000, on one hand, and the emphatic demand of the people to reduce tariff duties, on the other hand, Democratic Congressmen who feel the responsibility of the situation are casting about for a way out of the predicament. Many of them from the South and West have long been in favor of an income tax. In fact, they introduced about twentv different income tax bilis during the first session of the last Congress. During the last few months Representatives from all parts of the country have declared for an income tax. The Hon. John DeWitt Warner, of the Thirteenth Congressional District of New York, probably represents more very large incomes than any other Congressman. His district is the home of millionaires and multi-millionaires. The Vanderbilts, Goulds, Astors, Rockefellers, Havemeyers, Whitneys, and perhaps 400 or 500 more of the wealthiest of New York City’s 1,200 or 1,300 millionaires live in this district. Under an income tax this district would probably contribute more to the revenue than any other district and more than any one State, except perhaps ten or twelve of the largest. And yet Mr. Warner is not afraid to advocate an income tax. He not only thinks it more just than a tariff tax, but he believes it would meet the approval of the tens of thousands of mechanics, clerks and laborers in his district. We quote the following from an interview with Mr. Warner in the Journal of Commerce and Commercial Bulletin of Oct 21: “I certainly prefer an income tax, if it is necessary to raise sufficient revenue, rather than the retention of such high tariff duties as to involve an inordinate proportion of protection. I would not hesitate a minute how to vote if the question were presented between a protective tariff which would furnish the necessary revenue and a bill which made the duties onethird lower, and enacted an income tax to supply the deficiency. Personally, I think it would not be long bofore a substantially revenue tariff would bring as much money into the Treasury as would higher rates, because not only would imports increase as the result of lower tariff rates but we should have such an era of prosperity that exports would greatly increase and would naturally be paid for to a large extent by a further increase of imports. ’’ “But do you think it necessary to put the entire machinery for collecting an Income tax into operation to raise $20,000,000 or $30,000,000?" was asked. “The machinery need be no more elaborate than for the collection of any other tax, and I fear the amount of the deficit to be provided for the first year may reach $50,000,000 or more. Ido not think, however, that an income tax would be really necessary, because the increase in customs receipts under a revenue tariff might soon give us a surplus, and we could issue in the meantime Treasury certificates redeemable at the pleasure of the Government within not more than ten years. There may be a disposition in the House, however, to insist upon legislation which will meet the whole revenue problem at once. Members may say that my expectation of increased customs receipts is only a prediction, and that adequate revenue ought to be certainly provided for now. We shall then have a contest between different Dlans for meeting the emergency. "There will be the same opposition to an income tax that there is to any new form of taxation: and of the contest between the income tax, the plan for issue of bonds, and other plans, I should not be surprised if the final outcome were authority to meet any temporary deficit by the Issue of short-term bonds in anticipation of income, leaving the question of whether an inoome tax is needed to be settled by experiment, and this seems to me to be the best plan at present." “But do you not think that the needed revenue can be raised by increasing the internal revenue tax on beer or whisky?” “I presume that it could be raised by doubling the beer tax,” replied Mr. Warner; “but I do not favor such a proposition as supplementing a tariff already so high as to levy from those in poor or moderate circumstances the greater part of the neoessary income of the Government. If it is true that an income tax would levy its heaviest burdens on the rich, while it let the poor escape taxation, this would hardly De more than a fair offset for the enormously disproportionate burden which is imposed upon consumption instead of wealth by tariff taxation. The increase of the tax on beer would simply carry further the same wrong theory of legislation. If, however, it was a question of taking it off of clothes and pntting it on beer, I would be for taking it off of clothes, but I am not in favor of putting it on both in order to saddle the whole tax on consumption.” “But do you believe that the increase in the tax on beer would affect the retail price?” asked your correspondent. “The consumer would have to pay it in the end. You cannot lay a tax upon a theory that it will not affect the cost of the articles on which it is laid. The oonsumer would have to pay the increase, whether it was in smaller glasses or poorer beer or a reduction of the inducement to competition among producers. “I repeat: If wealth already paid most of the Federal taxes, and in some emergency the question arose as how to increase the revenuces by taxes on consumption, I might think a plumping levy on beer to be a good thing. But the trouble is that the most of our Federal taxes are now levied on consumption; such will be the case even when the tariff is reduced to a revenue basis; and, therefore, if we need additional taxes I believe in levying them on men’s wealth rather than on men’s wants." Free Trade Factories. Without any enmity whatever toward the Northeast, the interior States and the South, which have the power, should reform the tariff thoroughly in the interest of their own manufacturing development. No great skill is required to see that under absolute free trade manufacturing would be more profitable in the South and West than in the East. Importations would be! chiefly for the East, as the cost of trans- | portation would increase rapidly after ; goods left the ship for the railroad. I Southern iron and cotton and Western i wool, wood and hides would be made up j near the supply of material and the home market. The Northeast would i be forced to export manufactured goods more extensively. Thus the Northeast would work to get gold with cheap goods and the South and West would have a larger home market for wheat, corn and meat. The sections now al-' most entirely agricultural would be re-

lieved of part of their dependence on European markets for prices and on the Northeast for capital. The deeper tariff reform goes the better in every way for the South and West. Why Agriculture Is Depressed. At the close of the war it was hoped that those measures and policies which were the outgrowth of the struggle would be set aside, and that legislation would be enacted to relieve the people of the burdens of taxation which they had uncomplainingly borne. In this they were not gratified. On the contrary, in the year 1867—two years after the close of tne war —the doctrine of “protection for protection’s sake* was inaugurated, and the Congress of that year, instead of lessening the tax burdens, increased them. The pernicious dcctrine of “protection for protection’s sake” was not satisfied with the almost prohibitory character of many of the then tariff duties. They had tasted blood, and, like the daughters of the horse-leech, they cried for more This infamous system of taxation reached its culmination in the passage of the ‘McKinley bill.” Never have the people of any nation on the earth given up in taxation, in the same length of time, as large an amount of money as have the people of the United States. These taxes are not shown in the receipts of customs by the Government. That shown there was enjoyed by the Government. True, much of the revenue has been expended in wasteful extravagance; but still it went into the Government coffers and was spent by the Government. But the custom revenues are but a tithe of the tax paid by the consumers of the country. For every dollar received by the Government six have been paid to the protected industries. On this forced contribution of the people the manufacturers have grown enormously wealthy, and the consumers have grown correspondingly poo r . The cause of the present depression has its origin in the immense taxes imposed on tne people by the tariff laws. In the vicious legislation which throws around manufacturing vocations the protecting care of the government and leaves the most important industry (that of agriculture) to struggle along without government aid. The protection policy not only robs the farmer by demanding tribute from him but it has destroyed the foreign market. The nations which were formerly the purchasers of the products of our farms have adopted the MoKinley doctrine of exclusiveness and have built up cereal-growing districts. They are independent of the American farmer. They have given kind for kind,which is most wonderfully human. Agriculture is the source of all wealth, and with it depressed all other vocations must suffer, and therefore the reasons of the present unwholesome conditions are found in the fact that agriculture has been impoverished that manufacturers might grow rich.—Pomeroy (Ohio) Democrat.

The Less Protection the Better. Western and Southern staple producers never needed a tariff for revenue more than now. A tariff for revenue is equivalent to a reduoed cost of transportation both ways. Every farmer.knows what reduced transportation charges do for the movement of crops and the purchase of goods. Farm debts never pressed more heavily and farm profits were never more unsatisfactory. Wheat prioes drag. Cotton is no better, and the big packing houses have claimed that they must cut down expenses. These are the three great sources of. our export trade. For seventy years the tariff question has been the same—how much the staple producers should be charged for the support of Government and the maintenance of certain lines of manufacture. Not only how much actual money they should pay, but how much restriction of trade they could stand. Radical additions to taxation and restriction have been made without notice to the staple producers. The imposition of new burdens in 1883 ana 1890 was made when all the pledges out were for reduction. In spite of that habitual treatment the agricultural States do not ask for an immediate blotting out of all protection. Their expectation is that a Democratic Ways and Means Committee will present a bill whose guiding pur. pose will be the encouragement ol trade and production. The raising of revenue necessitates some protection’ as long as we have a tariff of any kind. We can stand that much protection, and not a great deal more. It has always been the case heretofore, when a tariff bill is in course of preparation, that the country hears a great deal about the effect on the protected industries. This time we have a right to hear less about that and more about cheap transportation and the encouraging effect on export industries. When the Ways and Means Committee in its experiments gets to a bill for the merchants, farmers, school teachers, preachers, lawyers, carpenters, masons and blacksmiths it can Btop right there. That bill will be good enough.—St. Louis Republic.

No Escape from a Lower Tariff. Until the silver question is disposed of little will be heard of the tariff. But the high protectionists should not take the general silence upon the latter issue to mean a weakening of the popular determination to reduce and revise the rates. Henry McCormick, of Harrisburg, Pa., one of the wealthiest iron and steel manufacturers in the country. a Scotchman, like Carnegie, who early saw what high duties meant for his purse and who was largely instrumental in securing the enactment of the steel rail duties, says in a recent interview: “In the prosperous period of the last twenty years the steel and iron industries of this country have been placed on a firm business basis through the fostering care of the tariff, and they are able to stand alone now. The steel industry no longer needs such a strong prop. I advocated a high tariff for steel rails years ago, when a tariff was needed, but I believe the Amerioan manufacturers have grown sufficiently wealthy, an 1 their plants have been so well equipped with the latest improved machinery that they can afford to compete witn the foreign manufacturers on the same level before long. * This frank admission .that now that he and Carnegie and the rest have filled their pockets out of it, the tariff may well go as a thing which has outgrown its usefulness even to them, very well represents the popular thought on this question. The people believe these industries are better able to stand alone now than before, and need less instead of higher duties. They have so expressed themselves at- the polls, and are determined to try the experiment of lower duties. This talk that the panic has demonstrated anything against tariff reform or changed public opinion is not only without foundation but mischievous to the protected interests. The wiser course for them is to adopt a more yielding attitude toward the popular verdict and thus place themselves in a position to influence the impending action of Congress in the way of conservatism, and also in the way of expedition.—Springfield Re publican. * Tragedy was first represented on a wagon by Thespis, at Athens, B. C. 536.