526 POPULAR SCIENCE MONTHLY. 



" business " when a general tariff bill is pending in Congress is one 

 almost of panic, and the scramble to protect interests or to obtain 

 some special advantage against rivals has become a scandalous fea- 

 ture of tariff revision. Except in the instances named, as oleomar- 

 garine and filled cheese, the internal revenue system presents less 

 of a field for such an exhibition of greed and self-interest; but the 

 spirit duties, and even the tobacco rates, may be used in such a way 

 as to favor the large manufacturer against the small concerns, and 

 are to that extent misused and applied for purposes antagonistic to 

 those properly pertaining to taxation. In a time of tax revision the 

 suggestions for new taxes and ideas for changing the old are freely 

 offered, and do not stop short of absolute prohibition of an industry, 

 of total destruction of interest. The vagaries of a legislative body 

 under such suggestions have instilled into the public mind a whole- 

 some fear of its possible acts and fully explain the timid and un- 

 easy condition of " business " when a general tax measure is under 

 discussion. Whether it be the manufacturer or producer seeking 

 protective duties, or the Granger or Populist asking for taxes of con- 

 fiscation against capital and accumulated property, the spirit is the 

 same — a desire to turn taxation to improper purposes. 



The tendency of Federal taxation to turn to taxes on capital and 

 the instruments of " business " — direct, rather than indirect taxes — 

 found its most extreme illustration in the income tax of 1894, the 

 principles of which have already been discussed. It finds a more 

 moderate and restricted exercise in certain graduated duties under 

 the act of 1898, and especially in the duties on legacies and distribu- 

 tive shares of personal property. It was no sentimental or even 

 theoretical argument based upon the right of inheritance or the in- 

 equality of taxation that led to the adoption of these duties in 1898; 

 it was only a blind following of the provisions of the earlier act, 

 and the consciousness that revenue must be had at every cost, and 

 no possible source of income should be overlooked. Yet the legacy 

 tax is essentially a tax of democracy and defensible for much the 

 same reasons as a tax, whether graduated or not, upon income 

 might be. 



By the act approved June 13, 1898, entitled "An act to pro- 

 vide ways and means to meet war expenditures, and for other pur- 

 poses," the national Government imposed a tax upon legacies and 

 distributive shares of personal property. This tax has been one of 

 the features of the tax law of 1862 (§§ 111-114), but in a much sim- 

 pler form and in a form better calculated to produce a revenue. 

 This earlier law imposed a duty on all legacies exceeding one thou- 

 sand dollars in amount, but very properly made a distinction in the 

 rate according to the degree of connection between the person from 



