XXXVIII. OTHER TAXES

"The taxes are indeed very heavy, and if those laid on by the government were the only ones we had to pay we might more easily discharge them; but we have many others. We are taxed twice as much by our idleness, three times as much by our pride, and four times as much by our folly."-Benjamin Franklin.

The Income Tax.-Besides the general property tax, there are several other kinds of taxes. The National Government and a few States levy an income tax. This tax is laid upon a man's salary, or upon his business profits, without reference to the amount of property he owns. A certain rate is determined upon by the government, and every man must pay according to his income. If the rate is 3%, and a man's salary or the profit of his business is $3000, then he must pay $90 as his income tax. In a progressive or graduated income tax the rate grows larger with the income. Thus the rate might be 3% for all incomes under $5000; 4% for all incomes between $5000 and $10,000; 5% for all incomes between $10,000 and $50,000; 8% for incomes between $50,000 and $100,000; 10% for all incomes over $100,000. Do you think a progressive income tax is just? If a man with an income of $2000 a year has to pay a tax of $60, which is fairer for a man with $20,000 a year income-to pay $600 or $1000?

The Inheritance Tax is laid on property which a person receives as an inheritance from parents or other relatives

or which is left to a person by a will. Where there is an inheritance tax children or relatives must pay the tax before they can take possession of the property left them by their parents or other kinsmen. The rate of the inheritance tax is often progressive or graduated, that is, the larger the inheritance the greater the rate of tax. The rate is often less for near relatives than for other people. Inheritance taxes are collected in three-fourths of the States.

Licenses; Fees.-A license is a privilege granted by a government permitting one to engage in a certain occupation or to perform a certain act. For granting a license the government usually charges a sum of money. The liquor license permits the holder to sell liquor; the merchant's license permits the sale of goods; the marriage license permits the marriage of the couple to whom it is granted. A fee is a small sum paid to an officer of the government for the performance of some public service. Thus if you wish to get a deed to land properly recorded, you will have to pay the recording officer a small fee.

Poll Tax. This word poll means head; a poll tax, therefore, is a tax upon the man and not upon property. It is usually a small sum. A male citizen above the age of twenty-one must pay this tax, although he has no property at all. Not all the States have a poll tax, but usually where there is such a tax, it must be paid before the citizen is allowed to vote. The poll tax is not popular in the United States, and in some of the States it is forbidden entirely.

The Franchise Tax.-A franchise is a special privilege given by government to a person or to a body of persons. For example, the right to use the streets of a city for a railway is a franchise; the right to lay pipes for supplying a city with gas is a franchise. Such franchises as these are sometimes extremely valuable. For example, here is a street railway company whose cars and rails and wires. and power houses are worth a million dollars but whose franchise the right to use the streets-is worth two millions of dollars. In some States such a company would pay two taxes, a property tax on the power houses, cars, etc., and a franchise tax for the privilege of using the streets.

Duties and Excises.-The taxes thus far described, the property tax, the income tax, the inheritance tax, and the franchise tax, are usually collected for the support of town, city, county, and State governments. But the great government of the United States which has its seat at Washington must also be supported. And it takes an immense sum of money to support our National Government. The salaries of several hundred thousand officials and the pensions of about a million old soldiers and soldiers' widows must be paid; costly public buildings in Washington and custom houses and post offices in large cities must be built; expensive warships and fortifications must be maintained; an army and a navy must be supported. To do all this requires over $800,000,000 a year. In order to raise this amount Congress orders the collection of duties, excises, and a tax on incomes.

A duty is a tax or tariff laid upon goods that are imported into this country from foreign countries. This tax is paid to government officers by the merchant who imports the goods. But the merchant does not bear the burden of the tax. If he is compelled to pay a duty of 75 cents per yard upon silk which he imports from France, this 75 cents is added to the first cost. If, without a duty, he could sell his customers French silk for $1.50 per yard at a profit of 10%, with a duty of 75 cents, he sells them the silk for $2.32 per yard. It is, therefore, the customers who pay this duty, or tax.

Excises are taxes paid by manufacturers upon goods made in this country. Thus the taxes upon liquors, tobacco, and cigars are excises. An excise tax, like a duty, is paid by one person, but the burden is usually shifted to another. If a tobacco manufacturer is compelled to pay a tax of 50 cents upon every box of cigars he makes, he counts this as a part of the cost, and charges his customers accordingly. A "special excise tax" is levied on the earnings of corporations.

Duties and excises are called indirect taxes, because the real burden of these taxes does not fall directly upon the people who pay them, but indirectly upon some one else. Excises and duties are laid upon such articles as beer, tobacco, sugar, tea, coffee, woolen goods, cotton goods, leather, iron, tin, etc. From this we see that every

body who wears clothes and

consumes food, that is, the

whole population, contributes something to the support of the National Government.

The national income tax is a progressive tax. It is 1% per annum on the amount of net income over $3000 for individuals and over $4000 for husband and wife living together. An additional tax of 1% is levied on incomes over $20,000; an additional tax of 2% on incomes over $50,000; and so on, the rate increasing as the income grows higher.

Eminent Domain.-Closely related to the government's right of taxation, is its right of "eminent domain." By this is meant its right to take private property for public uses. If the government wishes to use your house for a post office, or if it desires to run a street through your garden, or a road through your field, you have not the power to prevent it. Yet the government must pay you a fair price for your property, and it must not compel you to part with it unless it can be shown that it is for the public good that you should do so.

QUESTIONS AND EXERCISES

1. Do all citizens have to pay taxes? Think well before you answer this question.

2. What kind of taxes are paid without those who pay them seeming to know it? What kind of taxes do they pay most cheerfully?

3. Has taxation ever been a cause of war?

4. How are churches supported?

5. How are duties collected?

6. Is a poll tax a just tax? Is there a poll tax in your State?

7. What is meant by "smuggling"?

8. Is an income tax that exempts all incomes under $1000 just? 9. For what do people pay taxes most cheerfully?

10. How may a city acquire land for a park?