The residents of a small New Jersey village were recently called together for the purpose of considering the advisability of incorporating the village into a borough; and the Philadelphia newspapers reported that an application for incorporation had been signed by a large number of “taxpayers and citizens.” What is meant by this dividing of the people into two distinct classes? This question becomes of more than passing importance in view of the fact that the case cited is not an isolated one. For instance, during the political campaign of 1905, in New York City, a prominent newspaper spoke editorially of the candidacy of William R. Hearst for Mayor on a municipal ownership platform as an “appeal to the untaxed and an attack upon the taxpayers.”

The Secretary of the National Reciprocity League, in an address at Chicago, is reported to have said that “Municipal ownership and operation of street railways had become a craze; that people who do not pay taxes are the most enthusiastic supporters of the craze, as those who pay taxes are opposed to the idea.”

The late Charles T. Yerkes, in reference to the election of Judge Dunne as Mayor of Chicago on a municipal ownership platform, said: “The city will run heavily in debt. Will the poor man suffer? No; because the poor man does not pay taxes. Men with property pay taxes; these will suffer.” Mr. Yerkes did not say just what kind of property was meant; but as the returns of personal property in Chicago are said to be less today than they were twenty years ago (although the city is three times as large, with six times the wealth), it is evident that the owners of that kind of property—stock-owners of that kind of property—stocks, bonds, mortgages, paintings, jewelry, silver services, etc.—are not going to suffer to any great extent if they can help it. Then it must be the real estate owner, again, who is expected to do the suffering, because of the increase of taxes, should there be any such increase.

Day after day we read in the newspapers communications in reference to public questions which are signed “Taxpayer,” or “Property Owner,” as if that fact should give more weight or influence to their opinions or suggestions. Others go still further. A Pittsburg preacher in a recent sermon denounced universal suffrage, saying, “Only property owners should vote and all others should be disfranchised.” Numerous other instances could be cited which tend to show a growing tendency to consider the real estate owner as the only person who pays taxes.

Now the great majority of our people have probably not looked upon these signs of the times with any apprehension as yet; but “great oaks from little acorns grow,” and this increasing disregard for the rights of men, as men, this creating of class distinctions with a tax-bill as a line of demarcation, on the theory that one small class pays all the taxes and is, therefore, entitled to rights and privileges that are denied to others, is dangerous and contrary to all principles of Democracy.

Owing to the inherent defects of human nature, no doubt there will always be those among us who will expect and demand more than they are entitled to, but the average American is satisfied with a square deal. When deprived of what he considers his just rights, however, he is, like most other people, inclined to become indifferent to the rights of others. Sooner or later he helps to swell the large army of the discontented; and history teaches that discontent is not only the mother of progress, but the mother of trouble. “On the contentment of the poor rests the safety of the rich.”

It is not intended to discuss in this article the justice or injustice of any particular tax, but simply to consider the question of taxes—how they are paid and who pays them—in the hope that we may thereby the more intelligently render unto Cæsar the things that are Cæsar’s.

Let us consider first the tax on real estate, one of the most important illustrations of the so-called “direct” taxation which Mill has defined as “that which is demanded from the very person who, it is intended or desired, should pay it.” Now it is, of course, true that this tax is levied against the property and the tax-bill is rendered in the name of the nominal owner, who is, naturally, expected to pay it; but whence comes the money with which he discharges this debt against his property? If the premises are rented or leased, are not the taxes, insurance, cost of repairs, interest on investment, etc., all added to the rental which is asked of and paid by the tenant? There are leases drawn today which contain a clause providing “that any increase in the taxes shall be added to the rental.” And yet, during the late struggle in Philadelphia over the attempted lease of the gas works to a private corporation for seventy-five years, a gentleman appeared before the committee of councils on behalf, as he said, of the taxpayers and rent-payers.

During the passage of the mortgage bill through the 1905 session of the New York Legislature, a member of the committee appointed by the real-estate owners to oppose the measure said: “The result, should the bill pass, will be for the real-estate owners to raise the rents. It is the public who will have to bear the burden, not the real-estate owners.” So we appear to have very relevant testimony to the effect that the man who receives the tax-bill, the man “on whom the tax is levied and who is expected to pay it” really acts as an agent, collecting the tax from his tenant and passing it on to the authorities. Is the tenant then a taxpayer or a citizen? As more than eighty per cent. of the people of the United States occupy rented houses, the sooner this question is satisfactorily answered and each of us understands his own individual responsibility, the better for all concerned.

Would not the rent-payer hesitate to cast his ballot for corrupt municipal government—with its accompanying reckless and dishonest expenditures of the public money—would he not hesitate to strike or riot, if he knew that the expenses (the teamsters’ strike in Chicago, in 1905, is said to have cost the city $100,000 a month for special policemen) and losses would eventually have to be paid by increased taxes added to his rent?

The United States Steel Company is said to have done much to eliminate strikes at its different plants by selling a portion of the capital stock of the company to its employes. Every man who owns even one share now feels that he is a part of the organization, that its interests are his interests, its losses his losses; and he is not inclined to do anything that will injuriously affect himself. When property owners understand and admit it, and rent-payers realize that they are a part of the municipal corporation, of the state and of the republic, that the public interests are their interests, the public losses their losses, that we must all rise or fall together, a great deal will have been accomplished toward the creation of better feeling and a consequent improvement in existing conditions.

Adam Smith says of taxation that “the subjects of every state ought to contribute toward the support of the Government as nearly as possible in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the states.”

Montesquieu defined taxation as “that portion of a person’s property which one contributes to the state in return for protection in the enjoyment of the balance.”

Both these eminent authorities look upon the payment of taxes as a duty which the citizen owes to the state in return for something which he receives from the state; but neither says in just what manner that duty must be performed, and there are undoubtedly numerous ways in which the obligation of the citizen may be discharged.

A very important phase of the tax question to be considered here (owing to its being the source of almost the entire income of the United States Government) is what is known as “indirect” taxation, or the tax on commodities, processes, etc. This is more easily collected than a direct tax, because the consumer hardly realizes that he is being taxed when paying for articles which he may use his own discretion about purchasing; but it bears most heavily upon the poor, as only articles in general use will yield the necessary revenue.

For instance, the tariff on imports, for the fiscal year ending 1905, produced more than $260,000,000. This enormous amount was, of course, paid at the custom house by the importer of the goods, but it was then added to the cost of the goods and finally paid by the consumer. This tax is great or small, depending entirely upon the necessities or desires of the people.

The higher the social and economic development of a people, the greater will be the burden of this tariff tax; as what were once considered luxuries eventually become necessaries of life, and a larger proportion of income is consequently expended for food, wearing apparel, household goods, etc. Under such circumstances, a man who is in receipt of a fair-sized income (even though possessing little or no taxable property), if he buys freely for the wants of himself and his family, may contribute more toward the support of the Government than his wealthy landlord, who buys sparingly, swears off his personal taxes, and collects his real estate taxes from his tenants.

The internal revenue tax on spirits, fermented liquors and tobacco produced in 1905 about $230,000,000, which, while also paid primarily by the manufacturer or distiller, is then added to the cost of production and included in the selling price, which is paid, of course, by the consumer. Not only the man who smokes or drinks, but everyone who uses spirits in the manufactures or arts, in patent medicines or drugstore prescriptions (many of which contain large quantities of liquor), is contributing a share of this tax. Oleomargarine produced during the same period over $600,000, and playing cards about $425,000.

Another very important source of income, levied in times of emergency, as during the war with Spain, is the stamp tax, which produces millions of dollars. The man with a small bank account pays as much for a stamp when issuing a check for one dollar, as does the man who issues a check for $100,000 or more; and each pays the same when purchasing an article of manufacture which is sold under a stamp.

Again, we should not overlook such items as license fees, financial, mercantile and franchise taxes, which, while levied by the city, state or national governments upon some particular person, firm or corporation, are really added to the cost of production or operation and ultimately paid by the general public. For instance, during the political campaign of 1904 in New Jersey, when equal taxation of railroad property was the burning issue, the Republican candidate for governor, in a speech at Trenton, stated: “No matter how high the tax on railroad property is made, the people who pay the freight rates and passenger fares will, in the end, pay it.” As a railroad director, he undoubtedly knew whereof he spoke. Like the salesman’s expense account—which included an overcoat, although it didn’t show—the freight and passenger rates also include the franchise taxes, which tend to increase the cost of everything we eat, everything we wear, every article of use or adornment in the home, every portion of the material required in building the house, which ultimately has its effect on the rent the tenant must pay. In the light of these facts it would seem that, instead of there being question as to “who pays the taxes,” the problem is to discover the man who does not pay taxes in some form.

Again, there are thousands of Americans who do not own one dollar’s worth of real estate, and many of them very few household goods, but who have a birthright in this free land by reason of descent from the heroes who pledged their lives, their fortunes, and their sacred honor for the liberties we now enjoy; who fought and bled and died for the principle of equal rights, no taxation without representation, and who established upon this continent a “government of the people, by the people, for the people.”

And the men of ’61! Have they not as much right to a voice and vote in the affairs of the nation as those who remained at home and laid the foundations of a fortune during that critical period? Had the soldier remained at home, perhaps he too might now be a heavy taxpayer, or tax-dodger. But he answered the nation’s call in the hour of need, he sacrificed his opportunities and offered his life upon the altar of his country. And, if he escaped with his life, he returned home, after years of privation, suffering and hardship, probably ruined in health or crippled for life, compelled to make a new start. Has he not discharged his obligation to his country?

Who are the men who would rob an American of his birthright, who insist that none but property owners should vote or hold office while all others—the payers of rents, of the tariff, of the internal revenue, of franchise and stamp taxes, etc.—should be disfranchised? Can they show a better title than the men, or their descendants, who do the work in time of peace and the fighting in time of war, but who may not have been able to secure any real property—honestly or otherwise?

The Constitution of the United States provides that no man shall be deprived of his right to vote on account of race, color or previous condition of servitude. What right have we to attempt to deprive any man of that privilege because he does not own property and pay “direct” taxes?

Mettius Curtius said that “Rome’s best wealth was her patriotism.” Yet that patriotism was deadened and destroyed by privilege and class distinction, and Rome fell. Patriotism is unquestionably the best wealth of any nation; but it cannot be aroused or fostered in a republic by dividing the people into classes, the rulers and the ruled, on the basis of ownership of property.

The success, progress and safety of this republic rests upon the contentment of the whole people, and that contentment depends upon justice and fair dealing. And every citizen, “unless he goes naked, eats grass, and lives in a hole in the ground,” is a taxpayer to a greater or less extent, according to the benefits he derives. He has the same interests in the national welfare; the same responsibilities; is entitled to equal rights and privileges before the law; and when we have fully realized the fact we will have established a higher standard of citizenship, we will each have more respect for ourselves and for one another, and a deeper, truer love and higher regard for our country and its institutions.