of the need of additional revenues and in part of the growing popular concern regarding the concentration of wealth.  Yet the actual legislation is something of a compromise between fiscal policy (to get revenues) and social policy (to reduce or to distribute the larger fortunes).[5] In New York legacies of over $1,000,000 are now taxable at 4 per cent to relatives in the direct line and to all others at 8 per cent.  In Washington the tax to relatives in the direct line is but 1 per cent, but to others it may go as high as 12 per cent on legacies over $100,000.  In Wisconsin, somewhat similarly, the tax may rise to 15 per cent on the excess above $500,000.

Sec. 3. #Income taxes; general nature.# All taxes, whether assessed upon the capital value of goods or not, come out of (reduce) the incomes now or later available for individuals.  But there are various ways of attacking incomes, i.e., of apportioning the tax burden.  Income taxation is that form in which the basis of the assessment and levy is the income of the taxpayer as it arises (not accumulated wealth, or capital, or business processes, or expenditures).  Of the various conceptions of income[6] the one mainly employed in income taxation is monetary income arising in the course of business, supplemented occasionally (but not consistently) by some items of material income that are expected to come to the person.  There is not in the long run such a contrast between wealth taxation and income taxation in their ultimate burden and effect as is usually supposed.

Indeed wealth (or capital) taxation as applied to accumulated wealth is more far-reaching than income taxation, for it falls upon the present worth alike of monetary and of psychic incomes (e.g., the value of a house whether it is let to a tenant or 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,