[216]. The French statesman, Colbert, chief minister of Louis XIV, once said that the art of taxing the people was like that of plucking a goose, namely, to get the largest amount of feathers with the least amount of squawking. There is more truth than fiction in that remark.
[217]. In a general way the distinction between real and personal property is simple enough, but the exact line between the two is not as a practical matter so easy to draw. For example: Is grain growing in the field real or personal property? Which is it after it is cut by the reaper? To which class do the trees in the forest belong (a) before they are cut down, (b) after they have been felled? Would it be correct to say that cattle grazing in the field are converting real estate into personal property?
[218]. Real estate is in plain sight and cannot be concealed from the taxing authorities; but stocks, bonds, notes, and so forth, are kept in a safe where no one sees them but the owner. There is no way of knowing how much taxable wealth a man has hidden away unless he is honest enough to tell. In some states the plan of taxing intangibles has been given up altogether on the ground that such taxes are too easy to evade. As a substitute these states impose a tax on the income from intangibles and require every person to make, once a year, a sworn statement of such income.
[219]. The exemptions, allowances, and rates change from time to time. The existing rules can be found in the latest edition of the World Almanac. They cannot be briefly stated without serious danger of inaccuracy.
[220]. See Cyclopedia of American Government, Vol. III, p. 492. The court held that a tax on land was a direct tax; that a tax on the income from land was in effect a tax on land, and hence also a direct tax.
[221]. During the years 1918-1921 these excises were also laid on railway tickets, telegrams, and sales at soda fountains. The excess profits tax, which also brought in a large revenue during the years 1918-1922 was levied upon all business profits above a designated standard.
[222]. Every state undoubtedly has power to lay such a tax. There is some doubt whether the national government also possesses it, because a tax on the products of labor is in reality a means of regulating the conditions of labor, and the constitution gives the national government no authority to regulate the conditions of labor; such authority belongs to the states. The question whether the national government can levy a tax on the products of child labor is now pending before the Supreme Court. See also p. [415].
[223]. People who have large fortunes may invest them in non-taxable investments, such as state and municipal bonds, thus evading the heavy surtaxes on incomes.
[224]. Henry George advocated that on all land a tax should be levied equal to the full amount of its ground rent (see p. [43]) and that all other taxes should be abolished. This, in effect, would do away with the private ownership of land, making the government the real owner. Mr. George endeavored to prove that nearly all our economic troubles are due to the private ownership of land and land monopoly. “What I therefore propose”, he said, “as the simple yet sovereign remedy which will raise wages, increase the earnings of capital, extirpate pauperism, abolish poverty, give remunerative employment to whoever wishes it, afford free scope to human powers, lessen crime, elevate morals and taste and intelligence, purify government and carry civilization to yet nobler heights, is—to appropriate rent by taxation.” Progress and Poverty, Book VIII, Ch. ii. This is a good example of the extravagant and Utopian hopes held out by reformers who are carried away by a single idea. If earth could be changed into heaven by merely taxing one thing instead of another, the transformation would have been made long ago.
[225]. President Harding, early in 1922, suggested the imposition of a sales tax as a practicable method of obtaining money with which to pay a bonus to veterans of the World War.