F. W. Blackman
[An article originally published in the Kansas
City Star, 7 April 1912]
My notions of tax reforms are briefly as follows: First, that there
is no automatic method of taxation which would be satisfactory to
everybody, nor no tax system that would be a panacea for the ills of
humanity. However, it is possible to make the system more just and
equitable by changing our methods and improving the social conscience.
The present system is inadequate to meet the demands of our expanded
industries. It violates the fundamental principle, that the basis of
taxation should be the capacity of the individual to pay. It is unjust
and inequitable because it permits double taxation and the shifting of
taxes upon people who are least able to bear them. The general
property tax under which we are working has been practically abandoned
by every other civilized nation except the United States, and our
present changes are working to that end.
Income Tax the Most Just
The capacity of the individual to pay is measured by his income, in
fact, all taxes must be paid out of incomes if property is to be kept
intact. An income tax, therefore, is the most just of all taxes. It is
said to be the most difficult tax to collect, but if made a
fundamental part of the system instead of an extra extortion, it would
be found no more difficult to assess and collect than any other tax.
The chief objectors to the income tax in the United States are men of
large incomes who fear it will be too just for them. The ideal tax
system, and the one toward which we seem to be working, is about as
- First - Abolish the general property tax by taking the tax off
improvements and personal property.
- Second - Put the tax on land values. Put the tax on economic
rent or the earning capacity of land which is measured by its
market value without improvements. In assessment, separate town
lots from agricultural land. Estimate the tax of the former on
site value and the latter on fertility, as these are the two most
important elements that make the market value in each case. Tax
the unimproved land the same as improved. Tax the incomes of the
land shown by 6 per cent on its capitalized value.
- Third - Divide all other incomes into categories such as
salaries, public and private; manufacturers, mines and forests,
agencies, banks and trust companies, trading and merchandising,
corporations, public and private; rental of commercial buildings,
incomes from securities such as notes, bonds, etc. Make
subdivisions of these so that they can be thoroughly classified.
Let the reports of each individual to the assessor represent the
specific income from each category.
Justice Instead of Robbery
By improving the machinery of assessment the difficulties of
collection would be reduced to a minimum. If such a tax should be
generalized comparatively few people would object to it, as they do
the personal property tax. For example, if a man is assessed on the 6
per cent $1,000 note at the rate of 3 per cent the state will take
half of his income, $30. If, however, an income tax of 5 per cent is
put on the $60 income he will pay $3.00. In the former case he will
feel it a process of robbery, in the latter case he will discover it
is a matter of justice. If all the incomes were assessed this way
there would be a sufficient revenue to meet the modern demands of
In addition to the tax on land values and incomes, there should be a
tax on franchises. This should be made in excess of any income tax, as
it is a form of rent obtained for special privileges. Make the income
tax on property progressive and there would be no need for the
inheritance tax; indeed, an inheritance tax is a mild form of social
robbery. It is not a tax at all, for, while the property which has
already met the demands of taxation imposed by the government is
passing from the hands of the dead to the living, the government
reaches in and seizes a part of it by exercising its piratical powers.
Poll Tax "Badge of Liberty"
Excessive wealth should be reached by a graduated progressive income
tax rather than by the inheritance tax. Poll taxes might be assessed
as a badge of liberty. No one ought to vote unless he has a sense of
financial responsibility in the government.
Taxes should be taken off all business except wherein it may be
necessary, for police purposes, such as for the control of vice, crime
and social maladjustment.
In making the above statement I realize the numerous difficulties
that arise before this system can be made practical and just. The
income tax should be a state tax, and not a federal tax, and, in order
to make it successful, all states, or a large majority of them at
least, would be obliged to adopt the same system.
Income Tax the Foundation
The main trouble with the income tax in the past has been that the
tax was an independent and superfluous part of the system. As
presented above it is the foundation of the whole system. As it is
founded on justice, if persistently followed it could be made
practical, just and equitable. It may take a long time to bring this
about, but there will be no satisfactory tax reform until this is
But an ideal of this kind does not preclude many practical things
that may be done at present such as the separation of the county and
state assessments; applying the revenue from franchises for the
support of the state and the revenue from local taxes for local
support; the assessment of property at its full value ; the assessment
of land separate from improvements; the exemption of household
furniture up to a certain limit; the development of a social
consciousness which would realize that the tax is a social investment
which yields a large return; the development of a social conscience,
which makes people glad to pay, and finally an improved method of
assessment conducted by experienced and trained assessors, etc., etc.