Without The Knowledge
Which Should Indicate These Points, A Chancellor Of The Exchequer,
With His Myrmidons, Would Be Groping In The Dark.
As far as we can
yet see, there is not much of such knowledge either in the Treasury
chambers or the House of Representatives at Washington.
But the greatest difficulty which the States will feel in obtaining
access to their own means of taxation is that which is created by
the Constitution itself, and to which I alluded when speaking of the
taxing powers which the Constitution had given to Congress and those
which it had denied to Congress. As to custom duties and excise
duties, Congress can do what it pleases, as can the House of
Commons. But Congress cannot levy direct taxation according to its
own judgment. In those matters of customs and excise Congress and
the Secretary of the Treasury will probably make many blunders; but,
having the power, they will blunder through, and the money will be
collected. But direct taxation in an available shape is beyond the
power of Congress under the existing rule of the Constitution. No
income tax, for instance, can be laid on the general incomes of the
United States that shall be universal throughout the States. An
income tax can be levied, but it must be levied in proportion to the
representation. It is as though our Chancellor of the Exchequer, in
collecting an income tax, were obliged to demand the same amount of
contribution from the town of Chester as from the town of Liverpool,
because both Chester and Liverpool return two members to Parliament.
In fitting his tax to the capacity of Chester, he would be forced to
allow Liverpool to escape unscathed. No skill in money matters on
the part of the Treasury Secretary, and no aptness for finance on
the part of the Committee of Ways and Means, can avail here. The
Constitution must apparently be altered before any serviceable
resort can be had to direct taxation. And yet, at such an emergency
as that now existing, direct taxation would probably give more ready
assistance than can be afforded either by the customs or the excise.
It has been stated to me that this difficulty in the way of direct
taxation can be overcome without any change in the Constitution.
Congress could only levy from Rhode Island the same amount of income
tax that it might levy from Iowa; but it will be competent to the
legislature of Rhode Island itself to levy what income tax it may
please on itself, and to devote the proceeds to National or Federal
purposes. Rhode Island may do so, and so may Massachusetts, New
York, Connecticut, and the other rich Atlantic States. They may tax
themselves according to their riches, while Iowa, Illinois,
Wisconsin, and such like States are taxing themselves according to
their poverty. I cannot myself think that it would be well to trust
to the generosity of the separate States for the finances needed by
the national government.
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