PRINCIPLES OF TAXATION. 375 



quired to make a return under oath of tlie amount of such property 

 in their possession.* Yet a petition recently presented to the 

 Legislature of the State by representative members of boards of 

 trade and chambers of commerce recites that the law in question 

 *' is ineffective and therefore ridiculous, as is proved by the fact that 

 although the market value of shares of foreign corporations held by 

 citizens of Boston alone is believed to be over $600,000,000, the 

 amount taxed by the assessors of Boston was then only estimated at 

 $45,000,000; and nearly all of this that is known is taxed to the 

 unfortunate i^eople whose estates are in trust," f 



In the United States the income tax, as enacted in 1803, 

 exempted $600 annual income for each person, together with what- 

 ever was paid annually for rent and repairs of residence. Five per 

 cent per annum was then levied on all incomes above $600 and not 

 in excess of $5,000; seven per cent on all incomes in excess of 

 $10,000. In the income tax of the United States as it existed at 

 one period there was, therefore, recognized the principle not only 

 of exempting incomes below a certain amount from all taxation, 

 which amount, in order to keep up the appearances of equity, was 

 allowed to be equally deducted from all larger incomes; and in 

 addition a further feature, not generally recognized in other existing 

 systems of income taxations, of " graduating " the assessment by 

 increasing the rate or the percentage on the larger incomes; a system 

 most exceptional and peculiar, but which on first presentation seemed 

 to find favor as an ingenious and equitable method of equalizing the 

 burdens of the State between the rich and the poor. 



* The tax laws of New Hampshire and Vermont are drafted especially with a view to 

 compelling the disclosure of income. 



\ If any one thinks that this extraordinary tax experience is limited to one section of 

 the country, he would do well to acquaint himself with the recent results of the State of 

 Ohio in attempting to tax money on deposit. Ohio has even a more efficient and minute 

 scheme of taxing all classes of property than Massachusetts. Not only is every citizen 

 bound under oath to make a complete return of his property, but the law, in addition, em- 

 powers each county in the State to contract with certain so-called " tax inquisitors" for the 

 payment of twenty per cent of all taxes collected through their agency on previously assessed 

 property. How successful this scheme has been in collecting taxes on money on deposit is 

 shown by the fact, revealed in a recent report of the State Board of Tax Commissioners, 

 that while the amount of money on deposit in the State, national, and private banks of Ohio 

 in 1892, and subject to State taxation, was at least $190,000,000, the amount actually re- 

 turned for taxation in the whole State during that same year was but a little over $32,000,- 

 000. There is a remark that has almost assumed the character of a proverb, that a text 

 suitable to and illustrative of every situation may be found in the Bible. The text that is 

 most applicable, and which ought to be full of instruction to every congressional advocate 

 of the enactment of an income tax by the Federal Government in time of peace, will be 

 found in the sixth chapter of the First Epistle of Paul to the Corinthians, where the apostle, 

 as if he had the existing situation in view, remarks, " All things are lawful unto me, but 

 all things are not expedient." 



