adjustment without the
possibility of establishing exact reasons for any distinctions made.
Finally, since such distinctions are liable to be varied from time to
time, an income tax requires some nice adjustment as to the nature of the
income. An income from the sale of property is entirely different in
character from the income made by interest on the same property. One is a
part of permanent investment, the other is the result of productive
investment. One destroys the principal if consumed, the other adds to the
principal. Yet no one could arrive at the actual, natural income, without
a most intricate system of book-keeping open to public inspection. For
without public inspection the temptation to fraudulent returns, under the
feeling that the tax is unjust, is so strong as to be demoralizing.
_Inheritance taxes._--A device much employed for making large accumulations
of wealth bear a larger portion of the community's burdens is a heavy tax
upon inheritance. Since such inheritance requires the guardianship of law
for security of transfer, government is suffered to take a liberal fee for
such transfer. Moreover, the inheritor is assumed to have no such property
interest in what has been accumulated by another as to claim that he can
be wronged if government takes a portion. It is defended also by
socialists on the ground that large estates are dangerous to the general
welfare.
Some facts bear upon the opposite side, and are worthy of consideration. A
large estate is the accumulation of enterprise and industry on the part of
a man of more than ordinary abilities. The presumption is in favor of
following his judgment in making that useful after his death. Most
frequently it is employed in some huge industrial machine, which the
public cannot manage, but can destroy by even taking a portion from it.
One of the main stimulants to all accumulation is the provision for the
future wants of a family. If the state takes the accumulation, it also
takes the responsibility for the successors in the family line. Wherever
it is applied, it is felt to be a heavy burden upon the community at
large. If the state interferes with the freedom of a testator, the chances
are that few estates will be accumulated, and wasteful methods of
expenditure, diminishing the power of the entire community, will surely
follow. Moreover, evasions of the inheritance tax are comparatively easy,
and are likely to be adopted extensively by the holders of
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