r occupied by the
owner). But, on the other hand, income taxation attacks directly the
monetary incomes from labor, coming as wages, salaries, fees, and
profits in business. This feature goes naturally with the fact that
the income tax is essentially a personal tax, grouping the items of
assessment about a person, whereas the "property" taxes are mainly
(tho not consistently) impersonal, making the piece of wealth the
primary object of assessment. This summation of each person's income
makes income taxation peculiarly suitable for progressive taxation
with the social-welfare motive of equalizing the distribution of
wealth. It is doubtless this technical assessment feature, rather than
any essential advantage as a mode of taxation, that has led to its
recent growth in popular favor.

Sec. 4. #Income taxation by the states#. Income taxes have been used
widely in European countries, but not so much in the United States.
Numerous attempts have been made by the states to tax incomes, but
with small results. Personal incomes, when sought by local assessors,
proved to be most elusive. There are (in 1913) but seven states with
anything resembling a personal income tax.[7] These are Virginia,
North Carolina, South Carolina, Mississippi, Oklahoma, Massachusetts,
and Wisconsin. Of these states Wisconsin has the most recent law, and
one the widest in its application and the most important fiscally. The
law applies a progressive rate to all incomes (with exemption of
$700 from wages and salaries) and contains elaborate provisions for
corporate taxation. The proceeds are distributed 10 per cent to the
state, 20 per cent to the county, and 70 per cent to the municipality
in which the tax is collected. In the six other states the tax is on
incomes only exceeding a certain amount (North Carolina, $1000, the
other states from $2000 to $3500 exemption); some apply to incomes
from any source but others do not apply to incomes from property
otherwise taxed. The total receipts from these state income taxes in
1913 were but $314,000.

Sec. 5. #History of federal income taxation.# The income tax seems
destined to play a more important part in the fiscal system of the
federal government. Until 1913, however, its part had been small. It
began to be used under the law of 1867 (when the law passed in 1861
was replaced before it went into effect). This was repeatedly amended
and finally repealed in 1870, to continue in force until the year
1872.