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SCI LIBRARY

Exchanges with Economics Professors
on Tax Reform

Bolton Hall



[Chapter XI from the book, Questions of the Day,, published
by G.P. Putnam's Sons, New York, 1891]


THE UNIVERSITIES AWAKENING


The discussion carried on by the association with presidents and professors of colleges and universities all over this country contains nearly all possible objections and the answers to them. The association opened the correspondence by sending to one hundred and seventy institutions a short circular letter embodying the principles of the association and asking for an expression of opinion as to its objects. One hundred and seventy responses to this circular were received. Of these, ninety-eight expressed views favorable to our principles, thirty took issue with us, and forty-five were non-committal. In the appendix to this volume will be found a list of the presidents and professors from whom answers have been received. Some of the correspondence growing out of this circular letter is herewith appended;

Statement by Prof. George F. Holmes, University of Virginia, Albemarle County, Va.


Dear Sir : The fullest information accessible in regard to direct taxation, especially when levied principally on land, as with Henry George, would invite my serious consideration. Mr. David A. Wells's name at the head of your list of associates invites my favorable appreciation of your doctrine, for I have long regarded him as the ablest, clearest, and most advanced economist of this country. Yet my opinions have been opposed to any single tax system. I have deemed that all lines were requisite to avoid the escape of classes and individuals from the burdens of the community, and to render the onus of Government demands proportionate to the just liabilities, benefits, and means of all and several.

The third and chief proposition of the platform excites the greatest- dubitation in my mind. It seems a return in the direction of the French economists and late innovators. It appears very questionable at a time when, from the enormous extension of agricultural occupations, and the competition of the whole world in agricultural production, markets, and sales, land is daily declining in price, except in cities and for manufacturing sites and mines. Moreover, land, like labor, is becoming little more than a redundant but necessary accompaniment of machinery and other forms of concentrated capital.


Response by Bolton Hall (2 October 1891)


My Dear Sir . Your letter prompts me to address you further on the subject. Our proposition is not the single tax of Mr. George, but simply the imposition of all taxes upon real estate, because this would relieve capital engaged in production from the discouragements attendant upon taxation. It is true that it would relieve some other wealth from taxation, but we hold that taxation of bonds, stocks, mortgages, and the like is unnecessary and wrong when real estate is taxed, since these things stand for real estate, and consequently such taxation would be double taxation.

The argument against taxing personal property is not only that such property includes tools of trade and other aids to production, but that much of such taxation would be easily avoidable. You seem to fear that the effect of a system of taxation, such as we propose, would be to oppress the farmer; on the contrary, I believe it would relieve him from taxation. His tools of trade would escape, and if the assessment upon land were justly made, as we contemplate, the effect would be to place the burden of taxes in great part upon city and suburban lands, and upon much land now held for speculative purposes. You mention that land is constantly declining in value, and this is undoubtedly true, in part, of agricultural lands; but city and suburban lands are enormously increasing in value, and the effect of our proposition would be to place the burdens where they belong, and to relieve the farm lands that have for years past been falling in value.


Statement by Prof. J. G. Shepard


You ask for my opinion of your platform for tax reform, and I am glad of the opportunity of giving it, as it is a question of the utmost importance to all interests in the State.

1. If the reason you give for direct taxation is a good one, and I believe it is, then all property owners should be taxed so that all should have a conscious and direct interest in honest and economical government.

2. The reason you give for exempting mortgages and capital from taxation is specious rather than real. That taxation of personal property develops inherent dishonesty is doubtless true, but how an honest effort to adjust an equitable system of taxation offers a premium for villainy is not apparent; nor do I comprehend what industry is discouraged by an equitable system of taxation, except it be the industry to violate law and escape just and righteous obligations.

3. The first reason for your third article may be a good one, but I utterly reject your second reason as a perversion of terms and an outrage upon common-sense. When it can be shown that taxation of itself cheapens production or anything else, then it can be shown that it will be a benefit to the farmer and worker to pay all the taxes needed to carry on government; and when that is established, the higher the tax the better it will be for them, and the motive for economical ad- ministration will be taken away.

4. With your fourth proposition I fully concur.

5. Of the fifth proposition I have only this to say, that, while I believe in the equity and justice of taxing all property protected by Government for its support and maintenance, I am free to confess that I do not believe it practicable, and therefore I would abandon the effort and tax none. Instead of taxing property, real and personal, to support the. Government, I would tax incomes. This, after all, is the fairest and most equitable system of taxation ever devised, and one that will ultimately prevail in all civilized governments.

Real or personal property may be and often is unproductive, and then it is a hardship on the owner to pay taxes, but it is never a burden for a secure and ascertained income to aid in the support of government which protects the business or industry that yields the income. True, this system is subject in one respect to your objection to taxing personal property. It develops dishonesty, perjury, and villainy ; but no system of taxation can be devised that will avoid all objections. Therefore, that which will accomplish the purpose with fewest objections should be adopted.


Response by Bolton Hall to J.G. Shepard


My Dear Sir: I am sure that the interest you exhibit in our movement justifies me in sending something in reply to your letter of October 2. You say that if the reason we give for direct taxation is a good one, then all property owners should be subject to direct taxation. Permit me to say that this is a non sequitur. It is true that direct taxation, by reason of its being immediately felt, does tend to prompt the taxpayer's interest in economical government, but it does not follow on this account that all forms of property, and therefore all property owners through such forms, should be taxed. There may be other considerations that make it undesirable to impose direct taxation upon some sorts of property.

If it were possible to find a method of taxation that should be absolutely just, then it would be the best method of taxation, whether it were direct or indirect, and without regard to its special effect in arousing the tax-payer's interest in good government.

If one were looking around for an ideal object of taxation, one would be delighted to find some valuable thing properly belonging to all, but capable of being used at any given time by only a few. Once such an object should be found, the matter of taxation would be perfectly simple, for the users of this one good thing, belonging to all, would be required to pay the community in return for the special privilege conferred. . As you are aware, Mr. Henry George and his disciples aver that land is such an object, and their single tax is in effect such a system of taxation as I have sketched here. Whether Mr. George is right or wrong I shall not undertake to say, as his proposed single tax is not yet a political issue. I do hold, however, that our proposition has in it, at least in part, whatever advantages are claimed for Mr. George's single tax. For taxation upon real estate, of course, must fall in part upon land. I believe, therefore, that the system of taxation that we advocate comes as near to an ideal system of taxation as anything practicable that has been suggested.

You believe our programme in favor of exempting mortgages from taxation to be specious. If it be, I should be very glad to have you point out in what way. Certainly the effect of taxing mortgages would be to raise the rate of interest, and make it more difficult for borrowers to obtain money upon mortgages. The lender would surely shift the burden, and leave it finally upon the shoulder of the borrower. You insist that to place all taxation upon real estate would not be to lighten the burden of the farmer or worker. I am glad that you have attacked this point, because our position is easily defensible. A tax upon real estate, if justly assessed as we contemplate, would fall in large part upon highly valuable land, in and near cities and towns. While the home of the laborer and the land improvements of the farmer would be taxed, they certainly would not be taxed more heavily than they now are, and they would probably be considerably relieved. Meanwhile, the farmer's tools of trade, his stock and machinery, and his other personal property would be entirely exempt from taxation. Thus we should avoid the petty annoyances attendant upon assessing and collecting personal taxes, and also the discouragement to industry involved in taxes upon capital and upon tools of trade.

A word as to your proposition for taxing incomes. Experience the world over shows that an income tax is the ideally unjust tax, for the reason that it is placed upon only a small part of the community, and usually in larger proportion upon honest persons of moderate incomes than upon the rich. Those who argue in favor of an income tax usually propose to exempt all incomes below $1,000 per annum, and proclaim the justice of the tax because it is placed upon the rich. In the first place, I greatly question the justice of assessing any tax with the special design of exempting a large part of the community from taxation. In the next place, I deny that income taxes fall mainly upon the rich. The persons that pay income taxes are the comparatively few well-to-do or wealthy persons who will honestly answer the questions of the assessors, and those salaried persons of moderate means whose incomes are easily ascertainable. The man whose income from various sources amounts to many thousands and possibly millions of dollars is never known to pay a tax upon his whole income. It is a notorious fact, that, wherever the income tax has been tried, perjury has thriven, and the honest man has paid more than his share of Governmental expenses. An income tax is open to most of the objections that apply to a tax upon personal property.


Statement by Prof. Edward W. Bemis, Vanderbilt University, Nashville, Tenn.


Dear Sir: I should be glad to receive further information from you in regard to your precise ideal of taxation. In my article in the August Chautauquan I stated my own platform, which in brief is progressive income and inheritance taxes, with real estate taxes for county and municipal purposes, and as much of the Henry George idea as is involved in a separation of the tax on ground rent and that upon improvements, but not with the idea of making this, even when joined to taxes on monopolies of light and transportation, the only tax; for I agree with Prof. E. R. A. Seligman, of Columbia, in favoring income taxes, and with Dilke (see his Problems of Greater Britain) in direct inheritance taxes. And I believe in sweeping away nearly all our present taxes, such as those on personal property and most licenses so common in the South on trade. If this places me with you, all right; but I have an idea you do not indorse inheritance and income taxes. How is it?


Response by Bolton Hall


My Dear Sir: Your letter in reply to one from this Association has been read with interest. Your programme of income and inheritance tax, with real estate for county and municipal purposes, is familiar. One of the strongest aiguments against an income tax is, that it offers a premium upon dishonesty. Honest men are honestly assessed under such a system, while the rogue escapes. I believe this to be an insuperable objection to an income tax. Another objection is, that such a tax is to some extent a discouragement to industry. Why fine a man for earning a large income? Income tax laws usually provide for the exemption of all incomes below $1,000 per year. Is it just to the able and honest man who earns two or three or four thousand dollars per year, that he should be made to pay taxes, while the dishonest man that earns twice as much, and the idle and inept man that earns one-fourth as much, go scot free?

As to the tax upon inheritance, why discourage the industry and economy of parents who wish to provide for their children, or husbands who would care for wives left alone and self-dependent? Another objection to an income tax lies in the fact that such tax falls irregularly and often in large lump sums. Now, nothing is more desirable in the way of revenue than uniformity and certainty. It is demoralizing to the State to have its treasury suddenly flooded with a large sum of money not expected, and possibly at the time not needed. As to the Henry George idea, it rests upon a well-known scheme of political and economic philosophy, and whatever may be said in its favor as an immediate fiscal measure, it is for the present impracticable^ because no community seems yet prepared for it.

You add that you believe in doing away with nearly all of the present taxes, such as those on personal property and most license taxes. In this we heartily agree with you, and I firmly believe that we are offering the only system of taxation that promises immediate relief from such vexatious exactions.


Statement by J. B. Unthank, M.N., President Wilmington College, Wilmington, Ohio


The first plank in your platform I fully indorse, as also the fourth and fifth, but I am strongly opposed to the second and third planks. I favor an income tax as being the most direct, fairest, and least burdensome of all taxes. That capital engaged in profitable enterprise should be exempt from taxes seems to me a monstrous proposition. All taxes must be paid out of wages or profits, and of these the latter ought to bear the heaviest part, since the most wages are only sufficient to support the wage-earner. To shift taxes from profit-paying industries to unproductive real estate -- such as dwellings, for instance - would be an act of oppression and injustice. If capital were fairly taxed everywhere, how could it run away from taxes?


Response by Bolton Hall


My Dear Sir: I am glad to learn from your recent letter that you agree even in part with our platform, and as you do not urge any objections to planks four and five, I shall not trouble you with argument upon that subject. You say that you favor an income tax as the most direct and fair, and least burdensome of all taxation. While an income tax is certainly a direct tax, I am inclined to think it is one of the most unfair and one of the most burdensome that can possibly be imposed. An income tax is dodged in part by every rogue, and thus the support of the government would fall exclusively on those too honest to conceal the amount of their incomes. You surely cannot deny this, and if you acknowledge it you cannot contend that such a tax is other than unfair and burdensome.

Furthermore, an income tax, as usually administered, is unjust in other ways. Income tax laws usually exempt incomes below ^1,000 per annum. I shall say nothing as to the wisdom and justice of relieving the great mass of the people from the duty of contributing their share toward the support of the government; but I must call your attention to the fact that under such a system, the capable, industrious, honest man who earns two, three, or four thousand dollars per year pays taxes on his full income, while the rogue earning and receiving ten times as much goes scot free on much of it, and the indolent or incapable man earning one-fourth as much escapes with no payment at all. Would you lay a tax upon honesty, industry, and capability?

You think it is a monstrous principle that capital engaged in private enterprise should be exempt from taxes, yet you will not deny that it is highly desirable that capital should engage in such enterprises, and, having admitted so much, I think you must admit that the State should impose no unnecessary hindrance to such application of capital. It is much better that capital sunk in unproductive wealth should be taxed, than that productive capital should be thus burdened. To shift capital from profit-paying industries to unproductive real estate, would be to encourage not only capital but labor as well.

You ask, if capital were fairly taxed how could it run away from taxation ? It is not quite clear as to what you mean by this query, but I suppose your idea is that if every State imposed taxes upon mortgages, bonds, and other intangible forms of capital, none of these things could escape taxation. Yet, even were all State tax laws absolutely uniform, it would be exceedingly difficult to prevent men from concealing such possessions, and if every State in this country should tax such forms of capital, the effect would only be to drive it into foreign countries where tax laws are wiser.


Statement by Rev. J. H. Brunner, A.M., D.D., Hiawassee College, Hiawassee, Tenn., September 1891


Gentlemen: Your circulars have been received and studied. Some of your views are correct, and some are otherwise. My neighbor has two sons. To one he gives a farm, and to the other an equal portion in cash. The former works hard and makes little gain ; the latter works some and has large gains. Why the former should be heavily taxed and the latter go scot free, does not appear. Both had equal portions out of their father's accumulations from honest labor.


Response by Edw. N. Vallandigham (on behalf of Bolton Hall)


Sir: I think you will admit, that whatever scheme of taxation the Government may establish, it will be difficult to avoid specific cases of injustice or seeming injustice. I need not tell you that incidental injustice may be charged against the present system of federal taxation, whether it be the customs duties or the internal revenue. It is certainly the duty of the Government to frame its laws in such a way as to avoid, if possible, unjust taxation. But surely the Government cannot undertake to consider the misfortunes of individuals.

If the farmer worked hard and did not prosper, either himself or his crops suffered from the act of Providence, or he lacked foresight in the prosecution of his business, or failed of such financial ability as was necessary to insure success. All this was not the fault of the Government. If the other son succeeded, it must have been by reason of good luck or management, neither of which can be considered by the Government in laying taxes ; certainly the good management should not be a reason for imposing an extra fine or tax. But that some farmers fail after hard work, and some financiers succeed probably with little toil, does not prove any general rule touching these two classes. As a matter of fact, it is probably true that there are more successful farmers, in proportion to the population, than successful financiers.

You will pardon me if I say that in my opinion you have not successfully attacked the proposition we advocate. If you feel sufficient interest in the subject to continue the discussion, I shall be very glad to hear from you again.


Statement by Rev. Peter Mc Vicar, D.D., President Washburn College, Topeka, Kan., 30 September, 1891


Dear Sir: Your favor of the 24th is received. The reform you advocate is yet in an incipient state. That some modifications in our present system are needed, no one can doubt. But how far the modifications should be carried, is the question which, I confess, is not yet clearly defined in my own mind. My judgment is that the mortgages and the land mortgaged should share in meeting the taxation. Why should a man who really owns but a fourth interest in land pay four- fourths of the tax levied?


Response by Bolton Hall to Prof. A. E. Rogers, State College, Orono, Me.


Dear Sir: You take exception to our principle of exempting mortgages from taxation. The effect of taxing mortgages would be to make it more difficult for owners of land to obtain money upon such security, and, of course, to raise the rate of interest upon mortgages. In this way the tax would be shifted from the holder of the mortgage to the owner of the land. How are you going outside the State jurisdiction to collect a tax from the holder of a mortgage? You would have to collect it upon the interest which the borrower pays, and you may be very sure, that if such a tax went into operation, the lenders of money would see to it that the rate of interest should be fixed so as to make up to them for whatever the State intercepted on its way from the borrower to the lender. As you do not discuss any other point in our programme, I shall not trouble you with an argument upon the whole subject, but I shall be glad to hear anything you may have to say upon the subject of taxation.


Response by William McCabe, Ass't Secretary, New York Tax Reform Association to unnamed recipient


Dear Sir: Your claim that the greater part of the real estate of our land is held by farmers is both right and wrong. If you claim that they hold the largest proportion of the real estate of this country in acres or feet, you are right; but if you claim that the real estate held by them exceeds the value of the real estate of the cities, you are wrong.

It is a common error, nursed by men whose hearts warm to the farmers, that this form of taxation will weigh more heavily upon them than upon any other class of the people of our country. I have no statistics at hand ; have only a book of reference, the Legislative Manual of the State of New York, and yet I find this : in Albany County, in which agricultural pursuits are carried on to the very smallest extent, I find the real estate values taxes $93,500,000 ; Erie County, $179,000,000; Kings County, $445,000,000; New York County, $1,400,000,000, making a total of $2,117,500,000. The valuation of the entire real estate of this State, according to the assessment rolls, is $3,400,000,000, so that these urban counties have real estate of two-thirds the value of all the real estate there is within this State.

As to acreage, I find that Albany County has 304,185 acres; Erie County, 612,846 ; in Kings and New York counties the values have gone way beyond any acreage assessment, but it would be safe to say that in the two counties there are not more than 250,000 acres. The acreage of the entire State, subject to taxation, is about 28,000,000 acres, and there you have it. One-twenty-eighth of the acreage of the State is paying two-thirds of the taxes. Were a just system to prevail, and personal property taxes to be abolished, these same urban acres would pay still more ; and were justice done in assessing real estate in the interior, the tax rate of all who put their real estate to productive use would be decreased. I intend to ask a high statistical authority to give me the statistics of real estate values, urban and suburban, in the whole United States, and when I have obtained the information I will take great pleasure in forwarding it to you ; for you can point out, as an answer to the figures that I have given you, that I am using as a basis the most populous State in the Union, and, in the event of that having come into your mind, I beg to assert that it can be demonstrated beyond a peradventure that the average will remain the same in every State in the Union, for the reason that, where the urban population is small, the suburban population is also small, and there is a larger quantity of land that has absolutely no value because of the absence of population.

You are carried away by another prevalent error, that personal property is mainly in the hands of the wealthy. If you mean to say by that that stocks, bonds, diamonds, and articles of luxury are in the hands of the wealthy, you are right; but these are not all that is included under the head of personal property. Mortgages are included under that head, and especially mortgages on farms. Now, the money that is used for that purpose does not come from the wealthy. They know how to invest their money to better advantage. The money invested in mortgages throughout the United States is the savings of people who work for wages. A Wall Street operator is not content to let his money draw him from five to eight per cent.; he wants from thirty to a hundred per cent., and takes chances.

The other forms of personal property that I think you have not in mind are those things classed under the necessities of the people - food, clothing, and such. While we hoist up the bugaboo of the personal property that the wealthy hold in the shape of their bonds, stocks, etc., the superficial students of affairs remain entirely ignorant of the fact that the necessities which come under the heading of personal property out-value all these bonds, stocks, etc., every year.

In New York County we are assessed on $220,000,000 of personal property. We have, as a matter of fact, about $1,500,000,000 of taxable personal property, mostly hidden. That $1,500,000,000 represents an average of $1,000 to each man, woman, and child. The personal property in the shape alone of the food we consume is about equal every day to the highest figure that has been set on the valuation of all forms of personal property. Then, what folly it is for men to go round giving expression to their views as to the wrong the abolition of personal property taxes would do the farmers - men who have given but a casual thought to the subject, many of them being professors of universities.

You ask whether or not a man's farm or market garden is not a form of capital engaged in production. There is no economist accepted to-day who would intimate that a man's farm or "market garden" is a form of capital engaged in production. A man's farm or his market garden can do nothing without the assistance or the help of the man's labor. The product of that man's labor applied to his farm or market garden results in a form of capital ; or, as economists would put it, wealth that may be used for further production.

I pass a portion of your letter until I reach the point where you advise us vigorously to enforce our own laws and bring personal property to the surface. The inference there is that you would go back to the days of the robber barons, the days of the rack and the thumb-screw, when that method of taxation had reached a point where a man would be perfectly honest in certifying to his wealth and yet could be made under pressure to swear to twenty times that wealth for purposes of taxation. We have gone beyond that time. The robbers who rob us now have to do so through legislation, or else we put them in jail. The vassal of a baron cannot order us up to the castle for the purpose of swearing to anything that the baron would have us swear to.

I say we have passed that stage, and I don't think intelligent public opinion will permit any legislation that looks to going back to the methods of those "good old times." The French people are far ahead of Americans in that matter. They have given up trying to assess personal property, for they have discovered, as I told you in my last letter, that personal property reflects a value upon real estate that can thus be reached; and while their method of reaching it is rather clumsy, still they do reach it in this way: If a man hires premises, say in the city of Paris, for which he agrees to pay a thousand francs a year, the authorities thereby presume, that, as he can afford to live in such premises, he must be worth so much money, and they tax him on the amount that they think he is worth on that basis.

You are carried away with the mistaken impression that existed in Cardinal McCloskey's mind up to the day of his death ; viz., that land was to be taxed according to its area and not according to its value. I remember reading of the celebrated case in which he called upon one of his parish priests to explain why he advocated a tax that would result in cutting up the land of the city of New York into little bits.

I attempted at one time to convert a good old moss-backed countryman to this idea. I argued with him for nearly three years and then converted him suddenly one day by accident. He was visiting me in this city, and I took him for a walk. We passed the Madison Square Garden, and he seemed so impressed with its magnificence that we stayed there looking and walking around it for nearly half an hour ; finally his admiration found words, and, farmer-like, he wanted to know what it was worth. He was a resident of Sullivan County, and I told him that that block with the building on it was worth more than the entire real estate and personal property value of the whole of Sullivan County; that, whereas you could not ride on horseback from one end of Sullivan County to the other in two days, you could walk around this piece of property in five minutes, and yet it was worth more than all the property he could ride over in two days. It made an impression on him which did not find expression in words until he got home, when he wrote me saying that he saw the point at last.

I believe it to be only necessary to bring our farmer friends down to this city, and show them one city block after another that is worth more than the entire county they live in, to convert them to our way of thinking. But the funds of this association will not permit of that form of procedure.


Statement by R. E. Thompson, 23 June 1891


My Dear Sir : I thank you for the copy of your association's statement of principles. It is one which I can indorse very heartily, except at one point. I would alter the third article to read, "Real estate and incomes should bear," etc. I fail to see why a rich man should be allowed to exempt himself from the direct payment of taxes by abstaining from investments in land and houses ; and I am not clear that taxes on land and houses will so distribute themselves as to reach all classes in proportion to the amount of the protection they receive from the State, and also to their ability to pay for that protection.


Statement by Edwin R. A. Seligman


Dear Sir : Your letter addressed to President Low, as well as the one intended for the Quarterly, have been handed to me for reply. I would say that point one in the platform meets my approval, looked at from the theoretic point of view.

If point two means that personal property should be exempt, I agree. But as to mortgages, I believe that they should be assessed to the mortgagee as real property, as is done in California. Point three would meet my approval if the word "local" were inserted before the word "taxation." But the last part of the sentence I do not agree with. I do not think it can be proven that they bear least heavily on the farmer. The remainder of the platform is, of course, self-evident, and therefore meets with my approval. But I would say that, on the whole, I consider your platform a little too negative. There should be more positive, constructive assertion in it.


Statement by Richard T. Ely


My Dear Sir: I am much interested in your letter of the 5th inst., but am unable to indorse your tax reform platform.

I do not accept it entirely as it stands, and I feel very confident that I should be unable to approve of any practical application which might grow out of it. I am not entirely opposed to the taxation of capital engaged in production, and do not believe that it necessarily drives capital away.


Statement by Woodrow Wilson, College of New Jersey, Princeton, December 1891


Dear Sir: On the whole, I very heartily indorse the above platform.


Response by Arthur T. Hadley to Bolton Hall


Dear Sir : I beg to assure you, in behalf of the department of political economy at Yale, of our hearty sympathy in your efforts to secure intelligent discussion of the subject of tax reform.

Statement by H. M. MacCracken, University of the City of New York, September 22, 1891


My Dear Sir : Since it was my lot in past years to lecture upon political economy, and to take a lively interest in civics, I am quite inclined to give an opinion on your platform, and that a favorable one.

I regard the system of municipal taxes in most of the States with which I am acquainted, as inexpedient from an economic point of view, and very objectionable from an ethical standpoint. Matters would be greatly improved if your platform could be adopted and faithfully carried out.


Statement by Charles W. Eliot, Harvard University, Cambridge, Mass., October 17, 1891


Dear Sir: I agree with the platform of the New York Tax Reform Association, and heartily with the association's success in enlightening the public mind concerning the whole subject of taxation.