Like the English, the American system can be but briefly treated here, since many of the taxes will receive our attention in subsequent chapters. The principal federal taxes have been customs duties and excises. The States, or commonwealths, have confined themselves rather closely to direct taxes, as have also the municipalities. Down to 1840, commonwealth taxation was very meagre. Many of the States attempted to get along without recourse to taxation at all, depending for revenues upon the sale of lands, fees, and other sources.

The evolution of taxation in this country during this century has resulted in little advance. Indeed, it has been to make confusion thrice confounded. Not only has difficulty been found in adjusting the spheres of thedifferent taxing authorities, but no sound principle, indeed scarcely any principle at all, has been followed. Before the Revolutionary War the general property tax, whose origin we have already seen, answered the requirements of justice and equality fairly well. As has been frequently remarked, the American people were a saving race. As fast as they created wealth they turned it into property. The forms of property were, even when not immovable, tangible and unconcealable. Real estate formed the mass of it. Movable property consisted of furniture, farm utensils, and cattle. There were few stocks or bonds, or other forms of credit in which to invest wealth. Among such a people a tax levied on property that was easily ascertainable answered all the requirements.

But as intangible personal property increased, as opportunities for investment multiplied, it became impossible to make the property tax "general." It became a tax on real estate except for the few conscientious persons who declared their personal property. The commonwealth legislatures made half-hearted attempts to sharpen the procedure of assessment. But little or nothing was gained in that direction. Prompted by a wave of popular excitement, or a feeling of bitterness toward certain classes of capitalists, the legislatures have, from time to time, attempted to reach personality by taxing thecorporations in which the untaxed funds were invested. The resulting corporation taxes worked some slight improvement. Under the existing conditions they cannot all be shifted. They supplement the general property tax very effectively. Sometimes, the legislatures have attempted to tax mortgages, as if they were a part of the property on which they rest. As mortgages have to be recorded in order to be legal, it is possible to get at the full value. In some commonwealths, then, the mortgagee is taxed on his interest in the property and the owner is exempt to that extent. In California, where this plan has been most extensively tried, the result has not been at all what was desired. The only effect has been to raise the rate of interest on mortgages by the amount of the tax plus from one-fourth to one per cent. That is, the mortgagees have succeeded in shifting the burden of the tax to the real owners with a handsome addition for their trouble. Such a shifting is always possible when any one form of capital is taxed leaving other forms untaxed, either because they are exempt or because they escape the tax. So the American system remains what it has been since 1840, — a regressive tax on real estate, supplemented in part by corporation taxes in some commonwealths, and by a few inheritance taxes. It is a system condemned by every scientific writer and impartial statesman, but retained as the only source of revenue.

The difficulties which have prevented persistent attempts at reform remain, and it is hard to see how they can be overcome. No one commonwealth can afford to pursue personal property with so much vigour as to actually impose a tax on all of it. Only concerted action could accomplish this. Capital is sufficiently mobile to move easily from commonwealth to commonwealth, and if compelled to bear its fair share of the burden in one and not in another, it will surely migrate. Legislators are extremely desirable of attracting capital and very wary of repelling it. The owners of capital cannot be taxed personally. They change their residence from city to suburb and even to unfrequented rural parts on the slightest increase of local taxation and move from commonwealth to commonwealth with equal facility. Residence too is a matter of intention, and it is easy if personal taxes are proposed to plead residence in another commonwealth. Concerted action being practically impossible, the tax-dodger is safe.

But while the present system is very bad, it has been tolerated in the past, and arouses less discontent at present than might be expected, because it falls mainly on the receivers of economic The value of land in many parts of the United States has increased very rapidly and is still increasing steadily. So that in those parts, while the taxed owner feels the burden severely, he consoles himself with the thought that he is largely or wholly reimbursed by the increased price which he hopes to get for his land. The general practice, too, of assessing real estate at a fraction of its value, even though so universal as to work no actual lessening of the burden in any individual case, tends to stifle murmurs of discontent. For the owner secretly congratulates himself on not having to pay on all of it, — an illogical basis for self congratulation, to be sure, but still not infrequently effective. The same person, too, is not infrequently the owner of taxable personal property which he conceals, and he is less uneasy about the tax on real estate so long as he is able to save the other.

Another reason for the absence of a concerted movement of real estate owners to lessen the burden arises from the fact that the real estate tax is a real burden on the property, and shifts itself by the process of capitalisation. For the new purchaser gets his property at a lower price than he would have to pay if the tax had not been imposed. The frequency and ease with which real estate changes hands gives constant occasion for this capitalisation of the tax. Every real tax, when not a part of a well-organised system which taxes every kind of property or all receivers of wealth, can be shifted in this way. It becomes a rent charge on the property to which it is thus attached. A dim perception of this, and a possible realisation of the fact that a reform of the tax system might transform this tax into an actual burden again, may lie at the bottom of the indifference with which the average land owner views proposed reforms.

All of this selfish indifference is, of course, mistaken. It defeats its own ends. The burden of taxation is only light when properly adjusted to all the shoulders. The serious effects of an unjust, unequal, and ill-arranged system of taxes upon the economic forces of the country has been treated elsewhere. The property tax forms the subject of a special chapter.

We have spoken merely by courtesy of an American system. As a matter of fact there is none that is worthy of the name. Federal authorities tax with no reference to commonwealths and municipalities ; commonwealths and municipalities, without reference to federal action. Municipal taxes are, however, generally adjusted to the existing commonwealth taxes, but only in such a way as not to make the resulting burden appear too large. Their efforts in this direction have only served to intensify the existing inequalities.