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6. The poll or capitation tax is a sum ranging from one to four dollars levied as a personal tax. It is a tax on the person, as a person, and not as a possessor of property.

7. Customs duties, levied upon articles imported from a foreign country. In some countries customs duties are levied upon exported articles, but this cannot be done in the United States (67).

8. Excises or internal revenue taxes, levied upon goods manufactured within the country. The articles which yield most of the internal revenue are: distilled spirits, beer, ale, tobacco and oleomargarin and playing cards. The corporation tax is also regarded as an excise.

9. License taxes, collected from merchants, peddlers, hack-drivers, showmen, saloon-keepers, and others, for the privilege of transacting business. The license tax resembles the franchise tax.

10. Fees and special assessments, collected as a partial payment for services rendered by the government. The charge for issuing a marriage certificate is an example of a fee, while a charge made for connecting a private drain with a public sewer is an example of a special assessment. Fees and special assessments are not always taxes properly so called.

It is sometimes contended that one's duty in respect to the payment of taxes should be measured, not by ability, but by sacrifice. According to this view a tax is burdensome, not in proportion to what is paid, but to what is left. To equalize the sacrifice of taxpayers a graduated or progressive tax has been pr

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posed. Under the workings of this tax the rate increases with the amount of property. For example, if A, B, C and D are worth respectively $10,000, $20,000, $30,000 and $40,000, a scheme of progressive taxation might impose upon A a rate of one per cent., upon B a rate of two per cent., upon C a rate of three per cent., and upon D a rate of four per cent. D's property is only four times as great as A's, yet it pays sixteen times as much in taxes.

The principle of progressive taxation is recognized in the federal income tax imposed upon the incomes of individuals and corporations. In addition to the underlying or normal tax Congress levies a surtax the rate of which increases as the income grows larger. A few States have progressive income taxes while many have progressive inheritance taxes.

One of the most radical of tax reforms is the plan by which all revenues, federal, State and local, are to be raised from a single tax imposed on land. According to this plan, men should contribute to the support of government, not in proportion to what they produce or accumulate, but in proportion to the value of the natural opportunities they hold; and it is contended that the landholder is the great monopolist of natural opportunities. The single tax would be laid upon land as such, and not upon the improvements upon land. The tax upon a vacant lot, provided it were as favorably located, would be as heavy as the tax upon a lot improved by a magnificent structure. The fundamental principle of the single tax is this: The individual should get the advantage of all improvements upon land, while the government (society) should get the advantage of favorable location, and of the increased values that accrue to land in a community which is progressive and which is increasing in population.

In 1916 Congress imposed an inheritance tax, known as the Estate Tax, upon the estates of all decedents leaving property valued at $50,000. This tax is graduated, the ratio being from one per cent. on estates of $50,000 to ten per cent. on estates of $5,000,000.

It is plain that expenditures for government in the United States must be very heavy, for there are three highly organized governments to be supported: the federal government with its army and navy and courts of law and high officials and thousands upon thousands of employees; the State governments with their numerous departments; the local governments with their school system and charitable institutions and highway improvements and police and sanitary service. In normal times the federal government spends about $1,250,000,000 a year, State and Territorial government about $250,000,000, local government about $1,500,000,000, making a total public expenditure of $3,000,000,000 a year. These numbers in themselves mean nothing—they are too large for the mind to grasp -but comparison enables us to comprehend their sig. nificance. $3,000,000,000 is about one-twelfth of the combined annual earnings of every man, woman and child in the United States. The people, therefore, contribute to government in a year about as much as they earn in a month.

CHAPTER XVI

PUBLIC FINANCE

SINCE under our dual system of government taxation is a concurrent function exercised with sovereign power by the State as well as by the federal government, and since each government determines its own expenditures, public finance in the United States is resolved into two sharply defined systems-national finance and State finance. The system of national finance will first receive attention.

At the opening of every regular session Congress receives the report and recommendations of the Secretary of the Treasury, containing detailed estimates prepared by the heads of departments of the sums necessary for the maintenance of the national government. Not a dollar of the estimates can be raised constitutionally without the consent of Congress. As a matter of practice, the consideration of the estimated expenditures begins in the House of Representatives, where the recommendations found in the Book of Estimates are referred by the Speaker to the proper committees.

The committees virtually control federal expenditures. There is no limitation upon their power of appropriation, except that any appropriation for the support of the army shall not be made for more than two years (56). They take the estimates submitted by the Secretary of the Treasury and do with them as they please. Sometimes they accept them, sometimes they modify them, but often they ignore them altogether. It is their function to prepare bills providing for the expenses of the government; and in this exercise of their duty they are entirely independent of executive authority. Quite often they invite treasury officials to assist them and advise them, but they are under no constitutional obligation to do so. The committees express their judgments in reference to the proper expenditures in the form of appropriation bills. These, like all other bills, must run the gauntlet of legislation. They must pass both houses and receive the signature of the President. When they have received the signature of the President and have become laws, the first step in national finance has been taken: it has been determined how much money shall be spent for the support of the federal government.

The second step in national finance is taken when Congress passes the laws for raising the money which it has decided to spend. While private individuals ordinarily estimate their income first and then decide upon their expenditures, governments are accustomed to estimate their expenditures first and to attend to the matter of income afterward. Bills for raising national revenue must originate in the House of Representatives (36), because the House directly represents the people. Post-office bills and bills relating to the mints and to the sale of public lands may orig

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