Princeton University - Nassau Herald Yearbook (Princeton, NJ)

Page 21 text:

Class of 1876 Memorial Prize Debate WINNING SPEECH ' BY JESSE HERRMAN N IQIO QUESTION: Resolved, That it would be expedient for the Federal Government to impose an income tax. i CNegative side upheldj. The gentlemen on the affirmative demand the introduction of a new method of taxation on the ground of expediency. Any new system of taxation to be expedient must be tested CID by Canon of practice, and Czj by the Canon of justice. These twotests must be rigorously enforced except in case of extreme emergency. In opposing the position of my opponents I shall demonstrate two propositions that an income tax should not be imposed Q15 because it is impracticable and C21 because it is unjust. That the income tax is impracticable is proven QU by the experience of the several States. The history of the income tax among the several states is a story of failure and dis- appointment. Since 1840, sixteen States have faithfully tried this method of taxation. They have had a percentage tax and a progressive taxg they have had collection by the Local government, and collection by State officialsg they have tried self assessment, and they have tried stoppage at the source. What is the result? Thirteen out of the sixteen States have entirely abolished the income tax. Forty tax commissions have thoroughly investigated our system of taxation. Only one out of forty has reported favorably on the income tax. Massachusetts, which has had an income tax the longest, has recently taken steps to abolish it. The substance of the adverse reports is this: CID although 19

Page 20 text:

The Nassau H erald White has offered to answer any complaints through the in- tricate machinery of the Prince. However, if this artful genius can not give satisfaction come around to me and I will endeavor to pacify you by whispering a story on Tom Welch to you, behind closed doors. 18

Page 22 text:

The N assau H erald the income tax seems fair theoretically, in practice, it never distributes the burden of taxation equallyg Q25 the income tax is not productive, Cost of collection and opportunity for evasion are so great that the actual revenue becomes insig- nificant. Virginia with a State tax of 32,000,000 was able to raise only 350,000 from an income tax. South Carolina with a State tax of 31,000,000 could raise only 355,000 All author- ities agree that the income tax among its States has been and is impracticable. That the income tax is impracticable is proved in the second place by the experience of the Federal Government. The Federal Government levied an income tax from 1862 to 1872. During the war while the Government could appeal directly to the patriotism of the people, the tax did yield considerable revenueg but as soon as the war ended, the imposition of the income tax, with its evasion and with its perjury, became one of the most disgraceful chapters in our financial history. In 1872, with a population of 39 millions, only 73,000 people re- turned incomes for taxation. Thus a tax which was a mod- erate success as a war measure became absolutely imprac- ticable as a peace measure. Congress realized this and thus wisely abolished the income tax in 1872. That the income tax is impracticable is proved in the third place by the experience of England. England's greatest Statesmen and economists have expressed the disapproval of this method of taxation. john Stuart Mill condemns the tax because a fair and just administration is absolutely impossible. Disraeli says that the odious features of this tax can not by any means be removed or modified . Gladstone said: I believe that the income tax does more than anything else to demoralize the people. The reasons for these criticisms are manifold. An income tax is an extremely complicated and expensive Way of raising revenue. The average cost in England is 827 of the amount collectedg 25? of all incomes are never reached by the tax collector 5 5029 of the tax must be collected by self-assessment. But self-assessment invariably means evasion. The reason that England tolerates the income 20