The taxing power is for revenue purposes. Violation of the spirit and letter considered. 137. The Constitutionality of the Protective Tariff There is no express warrant in the Constitution for the use of the taxing power to benefit any industries of the country or any class of persons, but Congress has been guided by the general spirit and intent of the Constitution rather than the positive letter of the law. The strict constructionist view of the taxing power is thus described in a paper prepared by Calhoun: The General Government is one of specific powers, and it can rightfully exercise only the powers expressly granted, and those that may be necessary and proper to carry them into effect, all others being reserved expressly to the States or the people. It results, necessarily, that those who claim to exercise power under the Constitution, are bound to show that it is expressly granted, or that it is necessary and proper as a means to some of the granted powers. The advocates of the Tariff have offered no such proof. It is true that the third section of the first article of the Constitution authorizes Congress to lay and collect an impost duty, but it is granted as a tax power for the sole purpose of revenue, a power in its nature essentially different from that of imposing protective or prohibitory duties. Their objects are incompatible. The prohibitory system must end in destroying the revenue from imports. - It has been said that the system is a violation of the spirit, and not the letter of the Constitution. The distinction is not material. The Constitution may be as grossly violated by acting against its meaning as against its letter; but it may be proper to dwell a moment on the point in order to understand more fully the real character of the acts under which the interest of this, and other States similarly situated, has been sacrificed. The facts are few and simple. The Constitution grants to Congress the power of imposing a duty on imports for revenue, which power is abused by being converted into an instrument of rearing up the industry of one section of the country on the ruins of another. The violation, then, consists in using a power granted for one object to advance another, and that by the sacrifice of the original object. It is, in a word, a violation by perversion, 138. Social Implications of the Taxing Power Some of the ways in which the taxing power may be used to benefit certain classes of the community so that the general level of civilization may be raised are suggested by President Roosevelt in his message of December, 1907: tax. When our tax laws are revised the question of an income tax The income and an inheritance tax should receive the careful attention of our legislators. In my judgment both of these taxes should be part of our system of Federal taxation. I speak diffidently about the income tax because one scheme for an income tax was declared unconstitutional by the Supreme Court; while in addition it is a difficult tax to administer in its practical working, and great care would have to be exercised to see that it was not evaded by the very men whom it was most desirable to have taxed, for if so evaded it would, of course, be worse than no tax at all; as the least desirable of all taxes is the tax which bears heavily upon the honest as compared with the dishonest man. Nevertheless, a graduated income tax of the proper type would be a desirable feature of Federal taxation, and it is to be hoped that one may be devised which the Supreme Court will declare constitutional. tax. The inheritance tax, however, is both a far better method of The inheritance taxation, and far more important for the purpose of having the fortunes of the country bear in proportion to their increase in size a corresponding increase and burden of taxation. The Government has the absolute right to decide as to the terms upon which a man shall receive a bequest or devise from another, and this point in the devolution of property is especially appropriate for the imposition of a tax. Laws imposing such taxes have repeatedly been placed upon the National statute books and as repeatedly declared constitutional by the courts, and these laws contained Foreign experience. Purpose of the tax. the progressive principle, that is, after a certain amount is reached the bequest or gift, in life or death, is increasingly burdened and the rate of taxation is increased in proportion to the remoteness of blood of the man receiving the bequest. These principles are recognized already in the leading civilized nations of the world. In Great Britain all the estates worth $5,000 or less are practically exempt from death duties, while the increase is such that when an estate exceeds five millions of dollars in value and passes to a distant kinsman or stranger in blood the Government receives all told an amount equivalent to nearly a fifth of the whole estate. In France so much of an inheritance as exceeds $10,000,000 pays over a fifth to the State if it passes to a distant relative. The German law is especially interesting to us because it makes the inheritance tax an imperial measure, while allotting to the individual States of the empire a portion of the proceeds and permitting them to impose taxes in addition to those imposed by the Imperial Government. Small inheritances are exempt, but the tax is so sharply progressive that when the inheri tance is still not very large, provided it is not an agricultural or a forest land, it is taxed at the rate of 25 per cent. if it goes to distant relatives. There is no reason why in the United States the National Government should not impose inheritance taxes in addition to those imposed by the States, and when we last had an inheritance. tax about one-half of the States levied such taxes concurrently with the National Government, making a combined maximum rate, in some cases as high as 25 per cent. The French law has one feature which is to be heartily commended. The progressive principle is so applied that each higher rate is imposed only on the excess above the amount subject to the next lower rate; so that each increase of rate will apply only to a certain amount above a certain maximum. The tax should if possible be made to bear more heavily upon those residing without the country than within it. A heavy progressive tax upon a very large fortune is in no way such a tax upon thrift or industry as a like tax would be on a small fortune. No advantage comes either to the country as a whole or to the individuals inheriting the money by permitting the transmission in their entirety of the enormous fortunes which would be affected by such a tax; and as an incident to its function of revenue raising, such a tax would help to preserve a measurable equality of opportunity for the people of the generations growing to manhood. . . . Our aim is to recognize what Lincoln pointed out: The fact that there are some respects in which men are obviously not equal, but also to insist that there should be an equality of self-respect and of mutual respect, an equality of rights before the law, and at least an approximate equality in the conditions under which each man obtains the chance to show the stuff that is in him when compared to his fellows. 139. Preparation of a Revenue Bill A slight notion of the difficult task which devolves upon the committee of ways and means and its chairman in the preparation of a general tariff act is given in the following interesting extract from the memoirs of Mr. Dingley: The preparation of the Dingley tariff bill began on the evening Republican of December 10, . when the Republican members of the ways take the members and means committee met in the committee room and voted "to initiative. begin a tariff bill and have it ready for an extra session of congress." mittee The room of the committee on ways and means in the National The Comhouse in December, 1896, when the preparation of the Dingley Room. tariff bill was begun, was the largest and most commodious in the capitol. The library had about four thousand volumes covering very completely the subjects of tariff and finance. An open fireplace and inviting easy chairs, made this committee room a general reception room for those desiring private conferences with prominent members of congress. Chairman Dingley was sought after more than any other member of congress, unless it was the speaker; and he always received all with uniform courtesy. In venter of the room stood a large table around which were ar21 17 Chairs. Along the edge of the table directly in front of r, vas a small silver plate on which was engraved the time the member of the committee occupying the seat. Chairn. Dingey sat at the head of the table farthest from the door ♥.. ? Sereno E. Payne of New York on his right and John Dalzell easyvania on his left. . . . The series of tariff hearings by the committee on ways and began December 28 and closed January 11. The commere room was crowded at every hearing, and representatives of ale leading lines of industry were present. Chairman Dingley presided over these hearings, listening to and commenting on the ss of testimony. Wednesday, January 13, the Republican members of the commi, ve began the framing of the tariff bill, in rooms they had enset at the Cochran hotel, immediately opposite the Hamilton. centrally located and convenient to the chairman. It ded me weeks and two days to complete the first draft of the Noger tarif bill, and get the printed copies ready for congress. The Rex Mican members of the committee worked almost uninteve during this period in the preparation of the bill. It was a tremendous task. Schedule by schedule, paragraph by De gap), the entire bill was constructed with great care and Mr. Dingley was the guiding spirit, all yielding to his During these conferences various chairman was always ready with 12 at knowledge and tact. areses elæn clashed, but the seite compromise or plan of procedure that seemed to satisfy all. W: rare Srewdness he succeeded in adjusting all differences and Sarmonizing the several parts of this important measure. His associates had implicit confidence in him and regarded him ds salcents regard a wise and noble instructor. Many amusing events transpired during the preliminary preparation of the Dingley tariff bill, some of them at the expense of e chairman, who was always so absorbed in the seriousness of work as to forget the humorous side of life. Mr. Dingley, it |