It taxes the
man who earns the money as well as him who inherits it. It taxes earned
income as well as income derived from investments; and in taxing the
income derived from investments, it cannot make any edifying
discrimination as to its source. Finally, it would interfere with a much
more serviceable plan of taxing the net profits of corporations subject
to the jurisdiction of the Federal government--a plan which is an
indispensable part of any constructive treatment of the corporation
problem in the near future.
The suggestion that the inheritance tax should constitute a pillar of
central rather than local taxation implicitly raises a whole series of
difficult Constitutional and fiscal questions concerning the relation
between central and local taxation. The discussion of these questions
would carry me very much further than my present limits permit; and
there is room in this connection for only one additional remark. The
real estate tax and saloon licenses should, I believe, constitute the
foundation of the state revenues; but inasmuch as certain states have
derived a considerable part of their income from corporation and
inheritance taxes, allowance would have to be made for this fact in
revising the methods of Federal taxation.
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