Bounty (tax)

“ It may not be uninstructive to consider the effects of a bounty on the production of raw produce and other commodities, with a view to observe the application of the principles which I have been endeavouring to establish, with regard to the profits of stock, the annual produce of the land and labour, and the relative prices of manufactures and raw produce. In the first place, let us suppose that a tax was imposed on all commodities, for the purpose of raising a fund to be employed by Government, in giving a bounty on the production of corn. ”

“ The mere imposition of an import duty of 3 rubles per pood, paid upon foreign sugar, is, like all protective duties, a bounty, but is a bounty upon production, and not upon exportation. When a tax is imposed upon all sugar produced, but is remitted upon all sugar exported, then, by whatever process, or in whatever manner, or under whatever name, it is disguised, it is a bounty upon exportation. ”

“ Having disclaimed the hateful term bounty, they instantly resume it in favour of farmers, whilst they renounce the propriety of thus endowing manufactures, although equally meritorious. If duties paid by the consumers of foreign fabricks to build factories would be no tax on the farmer, yet the efficient bounty thence accruing to him must be a tax on somebody; unless indeed the new discovery of the Committee, that such duties paid to support government are not taxes, which must be the case if they are not taxes when imposed to build factories; can obliterate all the received ideas of taxation. ”

“ If not so justified, the tax from which the bounty is to be "bestowed upon private individuals to aid private enterprises becomes none the less robbery because it is done under the forms of law, and is called taxation." ”

“ When our country gentlemen, therefore, demanded the establishment of the bounty, though they acted in imitation of our merchants and manufacturers, they did not act with that complete comprehension of their own interest, which commonly directs the conduct of those two other orders of people. They loaded the public revenue with a very considerable expense: they imposed a very heavy tax upon the whole body of the people; but they did not, in any sensible degree, increase the real value of their own commodity ”

“ By the increase of wages the labourer would be compensated for the tax which he would pay in the increased price of corn; by not expending any part of his wages on the manufactured commodities, he would receive no part of the bounty; the bounty would be all received by the employers, and the tax would be partly paid by the employed; a remuneration would be made to the labourers, in the shape of wages, for this increased burden laid upon them, and thus the rate of profits would be reduced. ”

“ A tax on the many, a bounty to the few This objection, the Committee admits "would be conclusive if true; that a permanent tax to encourage manufactures would be radically wrong; but that disclaiming the word bounties, as wholly inapplicable to any part of the bill, they are willing to test it by the principles of its active and intelligent opponents." ”

“ Rewards to a few artisan emigrants are practicable; but bounties to one in about eight of our white population, of a sufficient amount to wed it to a particular occupation, are impracticable. A tithe is a heavy tax, but it is nothing compared with a bounty to half a million of people. The clerical class in England does not amount to one hundred thousand persons, and about one hundred and twenty people, support one person of that class. The project of the Committee is, to make about eight people here pay a bounty sufficient to weld one person to the manufacturing employment. ”

“ The government will push to its extreme limits the admirable mechanism of these discriminating duties, but I fear that it will not answer the purpose.
"A Government Employe. You seem to be bothered about a very little matter. Is there any safety but in the bounty? If the consumer is willing, the tax-payer is no less so. Let us pile on the taxes, and let the ship-builder be satisfied. I propose a bounty of five francs, to be taken from the public revenues, to be paid to the ship-builder for each quintal of iron that he uses. ”

“ The exemption from taxation of private profitable enterprises, such as mills or factories, is less defensible. Frequently, however, they go without question, it being to no one's particular interest to do so. The usual subjects of State bounties were, in 1890, beet-root sugar, binding twine, iron and iron pipe, potato starch, and rope, with tax exemptions to Portland-cement works. Ramie fibre continued a favorite subject of bounty for some years, with seed distributions to farmers, which were in some States held unconstitutional. In 1896 Utah gave a bounty on canaigre leather and silk culture. ”

“ These are to be built by taxes on foreign fabricks, which must, inevitably, fall on consumers of the substituted domestick fabricks; but the farmers, far from paying any portion of them, are to be reimbursed by an efficient bounty. If so, the tax paid for building the factories, would be more glaringly unequal and oppressive, as other occupations and professions will pay all the tax, whilst the farmers will receive all the efficient bounty. ”

“ It is altogether for the benefit of the producer that bounties are granted upon the exportation of some of his productions. The home consumer is obliged to pay, first, the tax which is necessary for paying the bounty, and secondly, the still greater tax which necessarily arises from the enhancement of the price of the commodity in the home market. ”

“ The present burden which the sugar-bounty system entails upon the taxpayers of Europe is estimated at about $25,000,000 per annum, while the excise tax on sugar in Germany, France, and Austria is said to amount to $100,000,000 per annum. On the sugar consumed by the people of the continental nations of Europe which have adopted the bounty policy there is no bounty, but on the contrary an excise tax; the result of which legislation is to make exported sugars very cheap and home consumption abnormally dear. ”

“ Bounty certainly implies a payer as well as a receiver, and when it is bestowed by a government, it implies taxation on the people, considerably exceeding its amount, on account of the misfortunes to which public money is exposed, and the expenses of collection. ”

“ That, where income from bonds of the United States which by act of Congress is exempt from state taxation is reached purposely, in the case of corporation owned bonds, by exempting the income therefrom in the hands of the corporations, and taxing only so much of the stockholder's dividends as corresponds to the corporate income not assessed, the tax is invalid. ”

“ It may never yield as much, it may yield more. If a sum equal to the value thus ascertained had been invested in an annuity contract, payments thereunder would have been free from income tax until the owner had recouped his capital investment. We think a like rule should be applied here. The statute definitely excepts bequests from receipts which go to make up taxable income. ”

“ That a state law which permits individual citizens to deduct their just debts from the valuation of their personal property of every kind, other than national bank shares, or which permits the tax-payer to deduct from the sum of his credits, money at interest or other demands to the extent of his bona fide indebtedness, leaving the remainder to be taxed, while it denies the same right of deduction from the cash value of bank shares, operates to tax the latter at a greater rate than other moneyed capital. ”

“ This additional price was taken from the pocket of the subscriber and transferred to the National Treasury, where it has been used for the public advantage. It is so much property to the credit of the bond-holder, which it is gravely proposed to confiscate. Rebel property you will not confiscate; but you are considering how to confiscate that of the loyal citizen. Taxation of the bonds is confiscation.
The whole case can be stated [Pg 357] with perfect simplicity. To tax the bonds is to break the contract because you have the power. ”

“ The bounties bestowed by the exclusive privilege of banking may embrace fewer persons, and transfer annually four times as much property. The manufacturers are said to amount, with their families, to half a million of persons. If the bounty supposed to be bestowed upon this number by controlling consumptions, should be equal to the pittance necessary to relieve an old soldier, it would be enormous; if it is only five millions, annually, it would yield only ten dollars to each person, a sum insufficient to influence their industry to any sensible extent. ”

“ Neither the power to furnish a currency, or to regulate currency, is pretended to be claimed. The notes of the new bank are put upon the footing, not of money, but of commodities—things—articles in kind—which the tax receiver may accept from the tax payer; and which are to be used and consumed by the tax receiver, and not to be returned to the people, much less to be diffused over the country in place of money. This is the original idea and conception of these notes. It is the idea under which they obtained the legal capacity of receivability in payment of public dues ”

“ Each provision of the act is declared to be a contract between the state and each holder of bonds; it is made a misdemeanor for any judge, tax-collector, or other officer to abstruct the execution of any part of it, or to fail to perform his official duty; tax-collectors are inhibited from paying over moneys so collected to any other person than the state treasurer; and it is provided that no court or judge of the state shall have power to enjoin the payment of the principal or interest of the bonds or the collection of the special tax therefor. ”

“ Taxation is, of course, a form of confiscation, but it is a form which has become [Pg 337] familiar, which is perfectly legal, and which enables the confiscatory process to be stretched out over a long enough period to make it comparatively easy, to reduce the hardship to a minimum. By means of a progressive income tax, a bond tax, and an inheritance tax, it would be possible to eliminate the unearned incomes of a class of bondholders from society within a reasonable period, without inflicting injury or hardship upon any human being. ”

“ The artificial debtor, itself a creature of the legislative power, and all its functions derived from legislative grant, is so dependent upon the government, it lives and moves and has its being so entirely by the favor of the government, that not only what it owns, but what it owes also, is thought fit to be taxed, whilst only the possessions of the natural person, and not his debts, are taxed.
'But, it may be said, and indeed was urged in argument, that the plaintiff's loan as personal property follows his person, and is property for all purposes only in the place where he has his domicile. ”

“ Congress intended that profits and losses arising from the everyday operation of a business be considered as ordinary income or loss rather than capital gain or loss. The preferential treatment provided by § 117 applies to transactions in property which are not the normal source of business income. It was intended 'to relieve the taxpayer from * * * excessive tax burdens on gains resulting from a conversion of capital investments, and to remove the deterrent effect of those burdens on such conversions.' Burnet v. ”

“ If paid at once it affects their capital; if paid annually it affects their income. But here neither the capital nor the income is affected. The capital is not affected because the payment is an annual one. The income is not affected because this annual payment does not belong to the company, but is received by it, accounted for by it, and paid into the State treasury. Affecting, then, neither the capital nor the income of the stockholders, it comes within no known definition of a bonus. It is a tax, and nothing but a tax; a capitation tax, in the recognized meaning of the term. ”

“ The bonds of corporations of other States form no inconsiderable portion of the wealth of citizens of many of the States; but this wealth may be destroyed by taxation in the States where the business of the corporations is carried on Nor is such a result improbable. ”

“ To undertake to include these securities, evidences of debt, or obligations in a general property tax is to invite evasion, put a heavy inducement on concealment, and, whenever effective, to give rise to shocking inequalities of burden. The widow and orphan, whose property is in the hands of a trustee, pay the full tax; in any other direction the holder of stocks or bonds, money or notes, escapes according to the elasticity of his conscience. ”

“ On the 25th of that month, the legislature passed an act providing that from the interest payable out of the treasury on bonds of the State, whether funded or unfunded, there should be retained a tax equal in amount to fifty cents on the one hundred dollars of their market value, on the first day in April of each year, and made it the duty of every officer of the Commonwealth, charged with the collection of taxes, to deduct from the matured coupons which might be tendered to him in payment of taxes, or other dues to the State, such tax as was then or might thereafter be imposed on the bonds. ”

“ By the statute of 1864 that portion of the income of an individual derived from dividends on stocks, interest on corporate bonds, and the like, was directed not to be included in his return of gains and profits, and no tax was assessed to him directly for that portion of his income. Another section of the same statute provided that dividends of earnings, interest on corporate bonds, and the like should be taxed to the corporation directly and in its name. ”