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About The commoner. (Lincoln, Neb.) 1901-1923 | View Entire Issue (Feb. 14, 1913)
'fW-Tpmtfi'tt' "l",W?SS8J?WMP!IHIM' TV,'' - w fri1?rFr- fpfjpi)fpw? "ISISWP" T $ vT The Commoner. 5 fARY 14, 1915 rTTj'T lfttyP"JW'Wlrr'&?? '"' -tWV?!?rfmfVi',ir" n Ali Now York even Now Jersey and several t ana western states were relied on by monts of the tax to prevent making It itlonal. But ratification sot in. Ala- ld off August 17, 1909, less than a month no amendment had been formally sub Illinois was one of tho early ratlflora, York acted once and refused to ratify: irned about and acted favorably in 1911. things got to going they wont fast, until ime a bandwagon stampede. fight over the question in New York state tlcularly interesting because of tho licrhfc iws on some of the broader aspects of tho income tax proposition. The ratification amendment by tho New York legislature ifluenced In a large measure bv Senator f.who addrossed a loner argument in tho feof a letter to Senator Davennort.- iircrinc liftwable consideration of the amendment. As- K? V i ft w m, justice nugnes was governor of New at the time and he had taken the posl that the amendment would normit a tax t'tSllcvied upon tho income derlvod from ntatc Jboijl This was an important objection, and ittftor Root took issue with Governor Hughes. IWpbtaMetter he expressed regret that he could wjagreo with the views which Governor Hufhwi had expressed in his special message to tHt;iegislature on the subject. Aftor explaining why he could not accept the Yitwifthat the amendment would permit a tax Wkttjthe income from state bonds, Mr. Root T'sti?0 nt consider that the amendment in any 4?. whatever will enlarge the taxing power oqtw national government, or will have any wpifexcept to relieve the exercise of that tax laMfTOOwer from the requirement that the tax M&SSmbe apportioned among the several states. TkJfect of the amendment will be in my view thymine as If it said: 'The United States may ISIillax on incomes without apportioning the tdJtnal taxation?', to bo determined bv tho vTmtawm - - - principles and rules which are now appll Jgr the determination of that question." WRoot in his letter pointed out that for (tnan a hundred years after the adoption constitution various tax laws of con- wrero from time tn Hm hrmirrlif hnfnM th'.rts on objections that they Imposed direct taxitWa in violation of the rule of apportton mPpThe decision of the courts, he said, uni fomiry. sustained these laws from the Hylton cwwgn 1796, which sustained an unapportioned taxMi carriages, to tho Springer case in 1880, whkh; sustained an unapportioned tax on in coSgwii. Numerous laws were passed and en tQxtb&L, he said, imposing taxes on incomes without apportionment, and he declared that a fffeat part of the means for carrying on the cinlfwar was derived from such taxes. Sfter reviewing the decision of the supreme court in 1895, Mr. Root said in his letter that tlftlierious aspect of the new Interpretation of thVjconstltution was that it so ties the hands ofthe legislative branch of the government that without an amendment of that instrument con- 'K'.'', WJ8 can not subject to taxation, however great J&iJiSS' neeas or Pressing tho necessities of the jfjjg$rnment, either the invested personal prop '&&& of tue country, bonds, stocks and Investor- igats of all kinds, or the income arising from .' tlui renting of real estate, or from the yield of T ,;onal property, except by the rule of appor liS?ment aTnon tue states. fvKlt was so evidently Impossible to collect an Swme tax by apportionment araonc the states '-cordiner to nonulation." wroto tho Rdnnfnr "tfeat the general judgment of the country con firmed the opinion that the decision in the Pollock case had practically taken away from jttoiigress a power of vital importance to the mineral government, a power the exercise of yfthich had, at least in one time of peril, proved 3ntlal to the nation's life." tMr. Root expressed the opinion that the lendment would be no new grant of power. i urged New Yorkers not to be selfish. Ravin cr iat while a very large part of any income tax uld be paid by them the question should be awed from the Droader standpoint of national triotism. The records of the state department show that ily three states absolutely have rejected the come tax amendment. Tnese are uonnecticut, 5W Hamnshire and Rhode Island. FTiPRnlto the action iust taken bv tho states U income tax Is not a new institution in the untry and was not wnen tne tarm iaw or r ,!. r M An Interesting Nebraska Measure A bill (S. F. No. 400), was introduced In the Nebraska legislature by Senator Dodgo of Douglas county at the request of S. Arlon Lewis of Omaha, Nob. Mr. Lewis is remembered as having written tho original "Back to tho Land" article in 1895 in Los Angolo3, Cal. Ho is try ing, by practical methods, to carry out this work to aid-In tho cause of human uplift. Mr. Lewis says: "If this bill is passed it will open a now avenue to tho worthy man to become indepen dent and would tend to roliovo the congestion of our largo cities in the far oast." The bill is modeled somewhat after tho French credit Foncier plan. Commoner readers everywhere will bo interested in it. Tho bill follows: Senate File No. 400. A bill for an act pro viding that counties may Issue bonds to bo known as agricultural development bonds, tho funds so raised from the sale of these bonds to be used to encourage agricultural development in the state of Nebraska by the actual settler, defining tho purposes, limitations and pro visions of this act. Introduced by Senator Dodgo of Douglas. Bo it enacted by the people of the state of Nebraska: Section 1. (Purposes.) Each county in the stato is hereby authorized to issue bonds in tho sum of not to exceed $200,000.00 to run 1-5 years, bearing interest at the rate oC 4 per cent. These bonds to be issued to raise funds for the sole purposes as the provisions of this act describe. Section 2. Tho county commissioners shall have authority to issue said bonds and tho stato treasurer is authorized otherwise to in vest stato funds available in such bonds offered for sale. Section 3. The funds .raised by tho. sale of these bonds shall only be used for agrlcultur.il development work on unimproved lands in the state in tho manner and for the purposes as hereinafter set forth by the provisions of this act. Section 4. These bonds known as agricul tural development bonds shall create funds to be loaned to the actual settler for this develop ment work In tho following manner and terms. Section 5. Loans to settler applicants shall be made for the term of 15 years at G per cent interest payable annually, and in case of crop failure an extension of one year to bo allowed on the principal payment provided the annual interest Is paid. The principal and Interest can be paid off on or before maturity. Section 6. This loan to carry with it the ex press stipulation in addition to its terms of payment of principal and interest, the express agreement in accordance with application blank, as set forth by tho provisions in this act. Any violation of the express terms of this net to ob tain a loan undor false protensos shall bo deemed a felony. Section 7. An application blank shall bo issued in printed form providing as hereinafter described, an applicant shall fill out under oath each and every requirement therein. Section 8. (Application form of blank.) Tho following form of blank shall bo Issued, stating namo and residence of the applicant, age, single, or married, nationality, also tho signaturo of threo resident freo holders who shall vouch for tho good character of the appli cant, and If a non-resident of said county, evi dence of good character as shall bo satisfactory to the county commissioners. Tho amount of loan desired for the purpose only as providod for in this act, namely to cloar titlo to land pur chased or to be purchased, describing legally said land, agreeing to furnish abstract showing a good title In said land to said applicant. Stat ing the price paid or to he paid for said land; amount of said loan to bo not to excood 70 per cent of tho value of tho land and its added value by reason of this improvement loan. Stating how much money said applicant has paid or can pay In addition to this loan, agreeing to give first mortgage to said county to secure tho moneys advanced, said mortgago stipulating as to Its terms that It Is to run not to exceed 15 years and that tho Interest rate Is C per cent payable annually, and one fifteenth of tho prin cipal sum shall become due and payablo each and every year until Tully paid. Which prin cipal sum, however, shall not be exacted until the end of the second year, and in case of crop falluro throughout suid county the county com missioners shall have discretion to extend prin cipal for ono year provided Interest is fully paid. Section 9., All amounts over and above tho sum required to clear title In said applicant shall be used for the following sole purposes: First. Erecting small house, barn, and dig ging a well, and the balance to be used for tho purpose of a team of horses, harness, wagon, farm implements and soed. Should there be any sum not so expended it shall be deemed a credit to said applicant for the purchase of other Jive stock or necessaries of living. Section 10. The county commissioners shall bo allowed discretion according to local county conditions in the purchase of said items based upon actual farm requirements provided they do not exceed tho total of 70 per cent of tho face value of loan. Section 11. All bills for expenditure shall bo O. K.d by applicant and iaid only by county commissioners out of this fund by a voucher, and all excess over and above expenses to said county shall become a part of this agricultural development funds, and shall be used only for such purposes. 1894 was enacted. Way back in 1794 there was tho famous carriage law tax. That statute levied a tax of varying amounts on carriages, then looked on as the vehicles of the rich. James Madison was then a member of the house. Ho had been a prominent member of tho convention that framed the constitution. Ho opposed the tax, denounced it as unconsti tutional, fought it in congress and carried the war into tho newspapers. George Washington approved the tax, and so did Alexander Hamil ton, who was secretary of the treasury when tho law was passed. The government collected the tax against tho protest of a citizen of Virginia and on an agreed statement of fact the controversy went to the supremo court. Tho court decided that a tax on carriages was not a direct tax and therefore the law which imposed it and did not apportion it among the states was constitutional. From then on for a hundred years tho courts sustained laws of congress which were objected to as imposing direct taxes and not apportioning them. In 1880 tho supreme court sustained an unapportioned tax on income in tho famous Springer case. This was brought by William M. Springer of Illinois, then a representative in the house. Mr. Springer refused to pay the income tax assessed against him. The government levied on his homestead in Springfield, sold It, purchased it at the execu tion sale and brought action of ejectment against him. The case went to tho supreme court on tho action of ejectment. Springer filed with the supreme court a most elaborate brief, prepared by himself, but tho court held the In come tax law valid on the theory that direct taxes in the meaning of tho constitution Included only capitation or head taxes and taxes on real estate. The tax on Springer's Income was held to be In the nature of an excise and legal. In 1895 the income tax law, which had been included In the Wilson tariff act, was brought before the supremo court in the case of Pollock, against the Farmers' Loan and Trust company, and In that case tho law was held unconstitu tional and void. Two hearings were had. On the first hearing a majority of tho court held that a tax on Income derived from real estate must be apportioned as a' direct tax, but the judges divided equally, 4 to 4, on tho ques tion whether a tax on income derived from per sonal property must bo apportioned. On the second hearing, by 5 to 4, tho court held that a tax on Income derived from personal property must be considered a direct tax and must bo apportioned. All the judges agreed, however, that taxes on Incomes derived from business or occupations need not be apportioned. Some ono of tho justices changed his mind be tween the first and second decision. Who that justice was Is more or less In dispute. It is ono of the secrets of the supremo courtroom which may never be divulged. One of the dis senting opinions in the first case was by Justlco White, who is now chief justice. The late Jus tice Harlan concurred In the dissent of Justice White and added a statement of his own.