Online Library of Liberty: Economics, vol. 2: Modern Economic Problems

predict that progress will not be made quickly, steadily, nor always directed toward a clear ideal. If progress is to be rapid, the public must, however, have consistent principles by which its steps may be guided. In the foregoing kinds of taxation are the various elements that may be united into a system of taxation. It is useful to consider how this might be done.

At the basis of the whole tax structure is taxation, by value, of concrete wealth at the place where it is situated (in situ). This should be regardless of the distribution of ownership or of the residence of the owner. The present misnamed “general property tax” already presents the main outlines of this form of taxation, and the general changes necessary in law and method of assessment have been indicated above.9 Corporation taxation may be adjusted to this either by separate treatment and assignment to state purposes only, or more simply for most states, by assimilating it with the general taxation of wealth and allotting due shares of the proceeds to the various taxing divisions.10 The national government can, because of its exclusive power of levying tariff duties and also because of its exclusive control over interstate commerce, reach the tax-paying ability of the nation effectively by a combination of tariff and internal duties levied upon business acts. These mostly become merged into business costs, and are diffused over the whole population through general prices.11

This system of impersonal wealth taxation may then be supplemented by personal taxation, applied through inheritance and income taxes. These forms of taxation extend over and reach many of the same persons and incomes as do ultimately the impersonal taxes. But the summation of personal incomes gives the necessary condition for applying the principle of progression as far as this is, by public opinion, deemed desirable either for fiscal or for social reasons.

References.

Bullock, C. J., Selected readings in public finance. Bost. Ginn 1920. Chs. XII, XVI.

Daniels, W. M., The elements of public finance. N. Y. Holt. 1904. Pt. II, ch. VIII.

Hill, J. A., The income tax of 1913. Q. J. E., 28: 46-68. 1913-1914. Seligman, E. R. A., The income tax. N. Y. Macmillan. 1914.

West, Max, The inheritance tax. 2d ed., N. Y. Longmans. 1908.

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