Both these eminent authorities look upon the payment of taxes as a duty which the citizen owes to the state in return for something which he receives from the state; but neither says in just what manner that duty must be performed, and there are undoubtedly numerous ways in which the obligation of the citizen may be discharged.
A very important phase of the tax question to be considered here (owing to its being the source of almost the entire income of the United States Government) is what is known as “indirect” taxation, or the tax on commodities, processes, etc. This is more easily collected than a direct tax, because the consumer hardly realizes that he is being taxed when paying for articles which he may use his own discretion about purchasing; but it bears most heavily upon the poor, as only articles in general use will yield the necessary revenue.
For instance, the tariff on imports, for the fiscal year ending 1905, produced more than $260,000,000. This enormous amount was, of course, paid at the custom house by the importer of the goods, but it was then added to the cost of the goods and finally paid by the consumer. This tax is great or small, depending entirely upon the necessities or desires of the people.
The higher the social and economic development of a people, the greater will be the burden of this tariff tax; as what were once considered luxuries eventually become necessaries of life, and a larger proportion of income is consequently expended for food, wearing apparel, household goods, etc. Under such circumstances, a man who is in receipt of a fair-sized income (even though possessing little or no taxable property), if he buys freely for the wants of himself and his family, may contribute more toward the support of the Government than his wealthy landlord, who buys sparingly, swears off his personal taxes, and collects his real estate taxes from his tenants.
The internal revenue tax on spirits, fermented liquors and tobacco produced in 1905 about $230,000,000, which, while also paid primarily by the manufacturer or distiller, is then added to the cost of production and included in the selling price, which is paid, of course, by the consumer. Not only the man who smokes or drinks, but everyone who uses spirits in the manufactures or arts, in patent medicines or drugstore prescriptions (many of which contain large quantities of liquor), is contributing a share of this tax. Oleomargarine produced during the same period over $600,000, and playing cards about $425,000.
Another very important source of income, levied in times of emergency, as during the war with Spain, is the stamp tax, which produces millions of dollars. The man with a small bank account pays as much for a stamp when issuing a check for one dollar, as does the man who issues a check for $100,000 or more; and each pays the same when purchasing an article of manufacture which is sold under a stamp.
Again, we should not overlook such items as license fees, financial, mercantile and franchise taxes, which, while levied by the city, state or national governments upon some particular person, firm or corporation, are really added to the cost of production or operation and ultimately paid by the general public. For instance, during the political campaign of 1904 in New Jersey, when equal taxation of railroad property was the burning issue, the Republican candidate for governor, in a speech at Trenton, stated: “No matter how high the tax on railroad property is made, the people who pay the freight rates and passenger fares will, in the end, pay it.” As a railroad director, he undoubtedly knew whereof he spoke. Like the salesman’s expense account—which included an overcoat, although it didn’t show—the freight and passenger rates also include the franchise taxes, which tend to increase the cost of everything we eat, everything we wear, every article of use or adornment in the home, every portion of the material required in building the house, which ultimately has its effect on the rent the tenant must pay. In the light of these facts it would seem that, instead of there being question as to “who pays the taxes,” the problem is to discover the man who does not pay taxes in some form.
Again, there are thousands of Americans who do not own one dollar’s worth of real estate, and many of them very few household goods, but who have a birthright in this free land by reason of descent from the heroes who pledged their lives, their fortunes, and their sacred honor for the liberties we now enjoy; who fought and bled and died for the principle of equal rights, no taxation without representation, and who established upon this continent a “government of the people, by the people, for the people.”
And the men of ’61! Have they not as much right to a voice and vote in the affairs of the nation as those who remained at home and laid the foundations of a fortune during that critical period? Had the soldier remained at home, perhaps he too might now be a heavy taxpayer, or tax-dodger. But he answered the nation’s call in the hour of need, he sacrificed his opportunities and offered his life upon the altar of his country. And, if he escaped with his life, he returned home, after years of privation, suffering and hardship, probably ruined in health or crippled for life, compelled to make a new start. Has he not discharged his obligation to his country?
Who are the men who would rob an American of his birthright, who insist that none but property owners should vote or hold office while all others—the payers of rents, of the tariff, of the internal revenue, of franchise and stamp taxes, etc.—should be disfranchised? Can they show a better title than the men, or their descendants, who do the work in time of peace and the fighting in time of war, but who may not have been able to secure any real property—honestly or otherwise?