Page:Popular Science Monthly Volume 55.djvu/544

526 "business" when a general tariff bill is pending in Congress is one almost of panic, and the scramble to protect interests or to obtain some special advantage against rivals has become a scandalous feature of tariff revision. Except in the instances named, as oleomargarine and filled cheese, the internal revenue system presents less of a field for such an exhibition of greed and self-interest; but the spirit duties, and even the tobacco rates, may be used in such a way as to favor the large manufacturer against the small concerns, and are to that extent misused and applied for purposes antagonistic to those properly pertaining to taxation. In a time of tax revision the suggestions for new taxes and ideas for changing the old are freely offered, and do not stop short of absolute prohibition of an industry, of total destruction of interest. The vagaries of a legislative body under such suggestions have instilled into the public mind a wholesome fear of its possible acts and fully explain the timid and uneasy condition of "business" when a general tax measure is under discussion. Whether it be the manufacturer or producer seeking protective duties, or the Granger or Populist asking for taxes of confiscation against capital and accumulated property, the spirit is the same—a desire to turn taxation to improper purposes.

The tendency of Federal taxation to turn to taxes on capital and the instruments of "business"—direct, rather than indirect taxes—found its most extreme illustration in the income tax of 1894, the principles of which have already been discussed. It finds a more moderate and restricted exercise in certain graduated duties under the act of 1898, and especially in the duties on legacies and distributive shares of personal property. It was no sentimental or even theoretical argument based upon the right of inheritance or the inequality of taxation that led to the adoption of these duties in 1898; it was only a blind following of the provisions of the earlier act, and the consciousness that revenue must be had at every cost, and no possible source of income should be overlooked. Yet the legacy tax is essentially a tax of democracy and defensible for much the same reasons as a tax, whether graduated or not, upon income might be.

By the act approved June 13, 1898, entitled "An act to provide ways and means to meet war expenditures, and for other purposes," the national Government imposed a tax upon legacies and distributive shares of personal property. This tax has been one of the features of the tax law of 1862 (§§ 111-114), but in a much simpler form and in a form better calculated to produce a revenue. This earlier law imposed a duty on all legacies exceeding one thousand dollars in amount, but very properly made a distinction in the rate according to the degree of connection between the person from