162,081

62,716

837,284

Families that returned no income

Number of persons in the income families
Number of persons of less than $1,000.

"We count the wealthy class at three and one-half persons per family, and the poor at over five. This is liberal toward the rich, as shown by the fact that one-fourth of the people of Massachusetts being of foreign birth—give to the State more than half her children ; and also by facts that have been reported as to the numbers in the 'upper' families of New York City, not including servants.

"The increased consumption of the sixty-two thousand seven hundred and sixteen persons in the income families measures the greater amount of revenue contributed by them. To get at this we have analyzed the thirty-eight double columns of income-returns for 1868, published by the New York Tribune in June, 1869, with the following results:

"It is estimated that these classes respectively consume an average of two, four, six, eight, and twenty times as much of taxed products as is consumed by the average of the great mass of the people whose incomes are less than $1,000, averaging probably $450, against $1,450 for the 8,387 persons in the table, adding the $1,000 exempted.

66

If we now multiply the numbers of the several classes of incometax payers by the ratios of two, four, six, eight, and twenty, to rank them numerically with the mass of the people as consumers, we shall have the following:

"These represent families ranking with the average of the people as consumers. We now have the following:

Families returning no income
Income families as increased

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Suppose, what is not far from the fact, that the people of New York pay $10,000,000 annually to the general government on their consumption. Of this, the 162,081 families pay $7,157,695, and the 64,362 pay $2,842,305, against $958,000 if they consumed no more than the mass of the people. This gives an increased payment by the 17,919 income-men, on their increased consumption, of $1,884,305. This is nearly nineteen per cent of the aggregate of $10,000,000 paid by that city.

"The $85,000,000 of income returned in 1868 represented just about half the total income of that city over $500 exemption. Thus it is seen that the 17,919 persons, who, with their exempted $1,000 added, obtained over half the income of all the people having more than $500 each, paid less than one-fifth of the entire revenue obtained from the city by virtue of their vast surplus income, while the mass of the people, with no surplus income, paid over seventy-one per cent of the whole. In the eye of justice, the income class, including all with over $500 of gross income, should have paid the whole, each one in proportion to his income."

But the income-tax has still another feature which strongly recommends it for general adoption. It enables the government to check the inordinate growth of large incomes by levying an additional tax of a certain percentage above a fixed amount of income. Without attempting to establish precise figures for what must of necessity be a subject of practical legislation, I may illustrate my idea by the following:

Assuming an income of from $5,000 to $10,000, and to be taxed five per cent, an income of from $10,000 to $20,000 would be taxed ten per cent; from $20,000 to $30,000, fifteen per cent; from $30,000 to $50,000, twenty per cent; from $50,000 to $75,000, twenty-five per cent; from $75,000 to $100,000, thirty per cent; and for all incomes over $100,000, say, thirty-five per cent. All the surplus money thus raised by taxation, not used for regular governmental expenses, to be used for payment of public debts, the establishment of schools, asylums, and internal improvements.

It has long been conceded, that the extraordinary increase of large capitalists in our republic constitutes the greatest danger to which it is exposed. We have little or nothing to fear from monarchical tendencies, little or nothing from an aristocracy of birth; nor need we apprehend any danger from priestly rule, under our system of complete religious freedom. But the danger that threatens us is the one which all republics must guard against, which killed all semblance of popular freedom in the Lombardian republics of the Middle Ages, and which long before had put an end to the Roman Republic, - the accumulation of inordinate wealth, and consequently of power, in the hands of a very few individuals.

The establishment of the first triumvirate in Rome is perhaps the most noted instance of this danger. Three men - Pompey, Crassus, and Cæsar-succeeded, by an alliance of wealth with military glory and political ambition, in putting an end to republican institutions in a very few years. Narrow-minded Crassus furnished the wealth, ambitious Cæsar furnished occasions to Crassus for constantly increasing his wealth, and self-glorifying Pompey used Crassus's money to increase his power with the people and the army. But it was the man of money, Crassus, the narrow-minded, and men of money are generally narrow-minded, who really furnished the lever wherewith the republic was lifted out of its axis and thrown into the bottomless pit of subsequent Cæsarism and barbaric invasion.

Now, this same accumulation of wealth in the hands of a few comes with rapid strides under our very eyes. Thirty years ago a man worth a single million was a great rarity in our country; to-day every large city counts its millionaires by the dozen. They have absolute power over the railroads, telegraphs, and their tariffs; they have obtained the best lands of the United States by bribing Congress; they make corners in grain, and raise the price of wheat and corn as fancy prompts them; nay, they play with the lives and health of the poorer classes by organizing "syndicates" for the purchase of the world's supply of opium and quinine, when they can see large profits ahead.

This one fact alone should be a sufficient warning: One of these money-men, William H. Vanderbilt, recently sold a large amount of his railroad stock, and with the proceeds bought about fifty million dollars of United States registered four-per-cent bonds. And on these fifty millions he pays no taxes. Is this equitable? Is it just?

The poor man pays as heavy a tax on the pound of coffee or sugar which he buys as Mr. Vanderbilt, but the latter pays not a cent of taxes on an income of two millions per annum derived from those bonds, which two millions annually all the other tax-payers have to pay him through their national government..

In truth, I hold the danger to our rights and liberties so threatening, from the accumulation of wealth in the hands of a few, that I would even extend a check upon it beyond the operation of taxation, by limiting the power of individuals to convey, by gift or devise, their property and riches beyond a certain value or amount. The right of a State to exercise such a restrictive power has never been seriously questioned, and the expediency of exercising it is constantly gaining more advocates as the evil increases. One of the most illustrious of the recent converts to a recognition of this necessity is Professor Bluntchly, the great German, or, rather, Swiss jurist. His recommendation of the changes to be made in the present system is substantially as follows:

If the testator leaves direct heirs, the whole legacy to go to them; but if no direct heirs exist, a proportion of the legacy, increasing in value with the whole amount, should go to the State or the community, as follows: If the legacy goes to parents, or grandparents, or sisters, or brothers, or their descendants, then, Mr. Bluntchly suggests, the State should take five per cent of every $3,000, ten per cent of every $20,000, and ten per cent additional whenever the amount exceeds $30,000.

The more remote the relationship of the heirs, the larger should be the proportion given to the State. If there are no relatives, the State should get everything.

The fund thus acquired by the State should be set apart for educational and benevolent institutions; and in this way wealth would be made to circulate through the body-politic, even as the blood circulates through the human body.

Whether this plan of Professor Bluntchly is the best that can be devised, I leave undecided. Each country would probably find it incumbent to change the figures to suit its special economical condition. I only wish to emphasize the necessity of substituting some such system for our present mode of keeping such a vast power as that of unlimited grants and devises unchecked by the law.

CHAPTER II.

THE TRUE RULES OF TAXATION.

Adam Smith lays down the maxims of taxation in this manner: 1. "The subjects of every State ought to contribute towards the support of the government as nearly as possible in proportion to their respective abilities, that is, in proportion to the revenue which

they respectively enjoy under the protection of the State."

2. "The tax which each individual is bound to pay ought to be certain, and not arbitrary; the time of payment, the manner of payment, and the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person."

3. 66 Every tax ought to be levied at the time and in the manner in which it is the most likely to be convenient for the contributor to pay it."

4. "Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the State."

These maxims are so manifestly just that they ought not to stand in need of any arguments in their support. The only equal taxation is that which is levied in proportion to the revenue which citizens respectively enjoy under the protection of the State, that is to say, upon their income. And not only is it the only equal and just mode, but it also excludes arbitrariness in the assessment, and makes it always distinctly known to every person how much his taxes will

amount to.

It is, furthermore, the only mode of taxation which can be so regulated that it can be levied at the time most convenient to the taxpayer, and which admits of the cheapest system of collection. Under our present system of collecting taxes and duties, the cost of collecting, in many instances, equals the amount collected.