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" It has used this radical Post Date: Sun, 10 Aug 2008 18:20:35 +0000
But the government of the United States is unique in its relations to the government of the several states, and unique in financial resources. The government at Washing- ton can illustrate on various objects, and without financial in- convenience, the saying of Chief Justice Marshall, "The power to tax involves the power to destroy." It has used this radical power of taxation in more than one instance, and to reforming ends.

Autor of the post: Undefined


But what the United States Post Date: Sun, 10 Aug 2008 18:02:44 +0000
Any state in the American union, except as hindered tem- porarily by its own constitution and courts, both of which it can change at pleasure, can tax to death any industry whose home is in such state ; but it cannot tax the means nor the goods of commerce between the states, except under such limitations as render it impossible for the state to keep objectionable goods that are made in other states out of its markets. The federal govern- ment is absolutely without direct power to prohibit the making and sale of any article in any of the states, unless the same is contraband of war and for use in violation of some treaty, or against the government itself. But what the United States can- not do directly it can do indirectly ; it has the right to select ob- jects for internal revenue taxes, and to lay such tax thereon as congress in its discretion may impose.

Autor of the post: Undefined


It of course yields no Post Date: Sun, 10 Aug 2008 17:50:58 +0000
Thus congress reformed one feature of banks organized and operating under state laws by providing (Act of March 3, 1865), "That every national bank- ing association, state bank or bankin^ association, srmll pay a tax of ten per centum on the amount of notes of any state bank or state banking association, paid out by them after the first day of July, 1866." Any bank, therefore, can receive state bank notes without incurring any tax or penalty ; they can be used as money, also without tax or penalty, between private individuals or non- banking concerns ; any bank or other owner of them can present them for redemption to the bank of issue and demand payment, still without tax or penalty ; but no bank may pay them out ns money without incurring- said tax. It of course yields no reve- nue, but it has caused state bank bills to disappear from circula- tion, and has wholly prevented their further issue, furnishing thus a striking instance of the power of taxation to effect reform, where in the mind of the taxin^ power reform and destruction mean the same thing.

Autor of the post: Undefined


In taxation for reform Post Date: Sun, 10 Aug 2008 17:32:51 +0000
But it is important to note here that the work of destructive taxation is most complete and thorough when it is directed against an artificial commoclitv of a particular kind (state bank notes), and leaves substantially untouched another artificial commodity (greenbacks and national bank notes), which will do the work of the taxed-out commodity as well as it did or better. If the artificial commodity so taxed is a staple article of manufacture, for which there is no acceptable substitute, then an excessively high tax will neither be successful from the stand- point of revenue nor of reform ; the manufacture and consump- tion will go on, as it did when whisky was taxed two dollars per gallon in the period 1865-1868, and the payment of the tax will be largely evaded, as was the tax on whisky during that period. In taxation for reform, as for any other purpose, the foolish tax, the injudicious tax, the tax which overreaches its object, is sure and direct breeder of fraud and perjury.

Autor of the post: Undefined


The hardy axmen and teamsters Post Date: Sun, 10 Aug 2008 17:18:57 +0000
The oleomargarine law, just passed by congress and going into effect July I, 1902, is destined perhaps to afford striking il- lustration of the doctrine advanced in the preceding paragraph. This law imposes a tax of ten cents per pound on oleomargarine colored in imitation of butter, a tax which, like that on state bank notes, is meant to be practically prohibitory. The hardy axmen and teamsters in Minnesota logging camps ate last winter, in lieu of butter, and ate without complaint, oleomargarine which cost the employer about fourteen cents per pound, while butter itself, of satisfactory quality, could not have been supplied at less than twenty-five cents per pound.

Autor of the post: Undefined


Inferior butter goes largely Post Date: Sun, 10 Aug 2008 17:03:05 +0000
A quarter of a century and longer ago the joke of "strong" butter was as staple in the comic- paragraph laboratory as is yet the mother-in-law joke and others of like currency. Wide extension of processes for makinsr good butter, and the successful competition of oleomargarine (practi- cally unobjectionable as regards looks and flavor) with the cheap- er and ranker grades of "butter, have practically killed the butter joke by removing its every-day basis from most tables. Inferior butter goes largely to the renovator to be made over, or goes into uses where its individual character is otherwise disguised, or where at least it has no echo sufficient to reach the paragrapher's ears.

Autor of the post: Undefined


dvancine inferior butter or "packing- stock" Post Date: Sun, 10 Aug 2008 16:48:55 +0000
Now the new law just mentioned plainly and in set terms discriminates between oleomargarine and butter by taxing the former ten cents per pound, as aforesaid, and taxing renovated butter one-quarter of a cent per pound. It is known that in con- templation of the law's taking effect, "laree firms throughout the countrv have been purchasing low grades of butter" (daily press), with the result of a.dvancine inferior butter or "packing- stock" to a price relatively higher than it was as compared with good butter.

Autor of the post: Undefined


If such surmise is correct Post Date: Sun, 10 Aug 2008 16:33:32 +0000
Stress is laid on the fact that oleomargarine plants are ready, with little or no change, to renovate or otherwise handle inferior butter on a colossal scale. It is surmised that the buyers of low-grade butter will work it over in their oleomargarine plants, mix it with oleomargarine, and sell the compound so produced as "imitation butter," and under that name. If such surmise is correct, then no doubt the manufacturers expect that the color of the butter used in the mixture will sufficiently color the resulting compound to make its appearance pleasing to con- sumers; and no doubt also they will claim that the oleomargarine contained in the compound is not "colored in imitation of butter" within the meaning and intent of the law, and so not subject to the tax of ten cents per pound.

Autor of the post: Undefined


Palm oil, too, is mentioned Post Date: Sun, 10 Aug 2008 16:20:31 +0000
If, as is claimed, the new "imita- tion butter" shall be so plainly stamped or labeled that the pur- chaser will know exactly what it is, then the compound will not be impeachable as a fraud on the buyer. Should these contentions successfully run the gauntlet of the federal courts, oleomargarine as heretofore known will disappear from the markets, and low- grade butters be confined to the market made for them by special dealers for factory use ; while the general public, in lieu of them both, will buy "simply a mixture of renovated butter and oleo"- perhaps not quite so desirable a food-product as the staple oleo- margarine theretofore in current use. Palm oil, too, is mentioned as a possible ingredient in the new oleomargarine.

Autor of the post: Undefined


The tax on state bank Post Date: Sun, 10 Aug 2008 16:07:55 +0000
It has a high color, and if courts will kindly hold that its new use is proper food use, and not merely for the coloring of oleomargarine in imitation of butter, the new oleomargarine will not be subject to the new revenue law. Should the new law lead to such result, it will of course fail in its two- fold intent of reform by prohibition, and in such failure prove itself a revenue-yielder of considerable importance, if the new "imitation butter" shall be held technically subject to the tax of a quarter of a cent the pound. The tax on state bank notes was entirely successful, as measured bv its intent, because in clos- ing one channel it consciously left another straight and broad one wide open ; the two-dollar tax on whisky failed because in over- hampering legal channel, it perforce shunted commercial forces into opening and following the channel of fraud ; the new oleo- margarine tax is likely to fail, if measured in its intent, by seek- ing to close an established, and, as some think, hiorhlv beneficial commercial demand, without favoring or opening another channel for those forces to flow in which made the one so sought to be closed.

Autor of the post: Undefined





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