1902 Encyclopedia > United States > United States - Taxation. Public Debt. Pensions.

United States
(Part 28)


Part 28. Taxation. Public Debt. Pensions.


The taxing powers within the United States are as follows: -

A.The national Government, whose revenue powers are only limited by – (a) the provision of the constitution which prohibits all duties on exports, and (b) the provision that all direct taxes must be levied in proportion to population, - a provision which deprives direct taxes of nearly all their efficiency for revenue purposes;

B.The several States, whose revenue powers are only limited by – (a) restriction in their respective constitutions, and (b) the general principle that those powers must not be exercised in such a way as to contravene laws of the United States, or to destroy sources of the national revenue, although a State may prohibit within its borders the sale of liquors, from which the United States treasury derives a considerable part of its receipts.

C.Within each State, powers of taxation, to a determine or to an indeterminate extent, as the case may be, are by the constitution and laws of the State conferred, almost always for strictly defined purposes, (1) upon counties, (2) upon cities, boroughs, and incorporated villages, and (3) in nearly all the States, though in widely varying degrees, upon the primary geographical divisions of counties, such as the "town" of New England and the "township" of the Middle and Western States.

The revenues of the several States, and of the counties, cities, townships, &c., are generally derived from direct taxes upon property, real and personal, although in some States licenses and fees and taxes on franchises and incomes bear a not inconsiderable part. The revenues of the United States are, and have historically been, mainly derived from two species of indirect taxes, viz., customs duties on imports and excise duties on articles as produced or consumed within the country, notably liquor and tobacco. At three several periods, viz., 1800-02, 1814-17, and 1863-71, direct taxes have contributed considerable amounts to the national revenue. At times the proceeds of the sales of public lands have formed an important element of the receipts of the general Government ; but in the main it has been the accepted policy to sell lands to actual settlers at rates so low as to be inconsistent with the object of revenue. Indeed, under the homestead law, large portion of the public domain have been given away to settlers, while even larger amounts have been alienated in aid of schools, public improvements, &c. A detailed table, prepared by Prof. A. B. Hart, shows that up to 1884 192,584,116 acres had been sold, 162,230,099 had been granted to States and corporations for internal improvements, and 325,901,100 had been granted (167,483,506 to individuals and 158,417,594 to States) for other purposes,- making a total of 680,715,315 acres.

At the tenth census (1880) an effort was made to obtain statistics covering the amounts raised, in one year, under all the taxing powers authorized and exercised in the United States. The difficulty wholly in obtaining the facts relating to revenues collected by counties and by taxing agencies below the county. The aggregate results, as ascertained for 1879, were as follows Table XXXIV.) : -


The aggregate receipts into the Untied States treasury, beginning in 1791, have been (in millions of dollars) as follows: - from customs, 5462; from internal revenue, 3449; from direct taxes 28; from public lands, 241; from bank dividends, 10; miscellaneous, 568; total 9938. The net ordinary expenditures of the United States Government from 1791 to 1886 have been as follows (in millions of dollars): - war, 4563; navy, 1106, Indians, 230, pensions, 900; miscellaneous, 1938; total 8737. The foregoing is exclusive of payments on account of the principal or interest of the public debt.

The net ordinary receipts into the treasury for 1886 (the fiscal years ends June 30) were as follows: - from customs, $192,905,023; from internal revenue, $116,805,937; from direct taxes, $108,240; from public lands, $5,630,999; miscellaneous, $20,989,528; total, $636,439,727. Of the receipts from internal revenue in 1886 $69,000,000 in round numbers were from spirits, $20,000,000 from fermented liquors, 28,000,000 from tobacco. The net ordinary expenditures for 1886 were as follows: - war,$34,324,153; navy, $13,907,888; Indians, $6,099,158; pension, $63,404,864; miscellaneous, 74,166,929; total, $191,902,992. The foregoing statement is exclusive of payments on account of principal or interest of the public debt.


The Government set out, in 1790, with a revolutionary debt of about 75 millions of dollars. This debt continued without important change until 1806, when a reduction began, continuing until 1812, when the debt was about 45 millions. The then ensuing war with England carried the debt up to 127 millions in 1816. This was reduced to 96 millions in 1819, to 84 millions in 1825, and to 24 millions in 1832, and in the three years following was extinguished. The crisis of 1837, and the financial difficulties ensuing, created indebtedness, fluctuating in amount, which at the beginning of the war with Mexico was about 16 millions. At the conclusion of peace the debt had risen to 63 millions, near which point it remained until about 1852, from which time successive reductions brought it down to 28 millions in 1857. The financial crisis of that year caused an increase, which continued until the imminence of the civil war, when it rose from 65 millions in 1860 to 91 millions in 1861, to 514 in 1862, to 1120 in 1863, to 1816 in 1864, to 2681 in June and its maximum (2845 millions) in August 1865.

Of the outstanding principal of the debt in 1886, 158 millions bore interest at 3 per cent, 738 millions at 4 per cent, 250 millions at 4 _ per cent., making the interest-bearing debt 1146 millions. The debt bearing no interest amounted to 629 millions, making the aggregate 1775 millions. The cash in the treasury on the 1st of July of that year reached 493 millions, leaving the total debt, less cash in the treasury, 1282 millions. The annual interest-charge was at this date 45 _ millions.

At the tenth census (1880) an effort was made to ascertain the indebtedness of all States, Territories, counties, cities, towns, townships, &c., with the following result (in millions of dollars); - total funded debt, 1118, floating debt, 84; gross debt, 1202, sinking find, 145; net debt, 1057. The total net debt was made up as follows (in millions of dollars): - debts of States and Territories, 234; debts counties, 124; debts of townships, 32, debts of school districts, 17; debts of cities and towns, 649.


The number of pensioners on the rolls, June 30, 1887, with the amounts due the several classes, at existing rates per year, will be founding the following table (XXXV.): -


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