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26 Document No. 1. [Session
tion of the burden of government upon those most able to bear
it, the safety of whose prosperity is vouchsafed by the stability
of the Government exacting it. The power to tax being the
power to destroy, it is fundamental that neither the sovereignty
of the State nor of the United States can be impaired by the
imposition of taxes upon its agencies without its consent. The
fear expressed in some quarters that the Congress under this
amendment would burden State obligations should be com-pletely
allayed when it is remembered that the Senators and
Representatives in Congress reside in the States, have their pri-mary
interests in the States, and the most controlling purpose
which inspires them is to serve their respective States and the
people. We should assume that the State bonds and their inter-est
are as safe from burdens in the hands of Congress as are
national bonds and their interest. Again as we recall that sev-enteen
years ago when Congress passed an income tax law, in
the midst of panic conditions, it exempted incomes under
$4,000, it is reasonable to presume that any Congress hereafter
will exempt incomes of even a larger amount. As a 2 per cent
income tax would reduce the net income from a thousand dol-lars
of North Carolina bonds 80 cents a year, this being an in-terest
rate reduction from 4 per cent to 3.92 per cent, even if
the income from nontaxable bonds, national and State, should
by Congress be taxed, which is against the probabilities, it
could not reasonably be considered a hardship on those on
whom it would be imposed, or would seriously impair the mar-ket
value of these securities.
For one hundred years it was conceded that Congress had
the right to tax incomes, and it frequently exercised that right.
This amendment will give Congress the right which in my judg-ment
the framers of the Constitution intended, but which the
Supreme Court by a bare majority of one, and after an asso-ciate
justice had changed his opinion, decided that instrument
did not contain. Possibly the greatest public benefit which will
result from a Federal income tax will be to enlist the interest of
the wealthy classes and the great business men in a close scrutiny
of Federal expenses and will conduce to national economy, for
when they pay directly out of their pockets money into the Fed-eral
Treasury they will be anxious to know the necessity and the
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| Title | Page 34 |
| Full Text | 26 Document No. 1. [Session tion of the burden of government upon those most able to bear it, the safety of whose prosperity is vouchsafed by the stability of the Government exacting it. The power to tax being the power to destroy, it is fundamental that neither the sovereignty of the State nor of the United States can be impaired by the imposition of taxes upon its agencies without its consent. The fear expressed in some quarters that the Congress under this amendment would burden State obligations should be com-pletely allayed when it is remembered that the Senators and Representatives in Congress reside in the States, have their pri-mary interests in the States, and the most controlling purpose which inspires them is to serve their respective States and the people. We should assume that the State bonds and their inter-est are as safe from burdens in the hands of Congress as are national bonds and their interest. Again as we recall that sev-enteen years ago when Congress passed an income tax law, in the midst of panic conditions, it exempted incomes under $4,000, it is reasonable to presume that any Congress hereafter will exempt incomes of even a larger amount. As a 2 per cent income tax would reduce the net income from a thousand dol-lars of North Carolina bonds 80 cents a year, this being an in-terest rate reduction from 4 per cent to 3.92 per cent, even if the income from nontaxable bonds, national and State, should by Congress be taxed, which is against the probabilities, it could not reasonably be considered a hardship on those on whom it would be imposed, or would seriously impair the mar-ket value of these securities. For one hundred years it was conceded that Congress had the right to tax incomes, and it frequently exercised that right. This amendment will give Congress the right which in my judg-ment the framers of the Constitution intended, but which the Supreme Court by a bare majority of one, and after an asso-ciate justice had changed his opinion, decided that instrument did not contain. Possibly the greatest public benefit which will result from a Federal income tax will be to enlist the interest of the wealthy classes and the great business men in a close scrutiny of Federal expenses and will conduce to national economy, for when they pay directly out of their pockets money into the Fed-eral Treasury they will be anxious to know the necessity and the |
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