EFFECT OF INCOME AND INHERITANCE TAXES ON THE DISTRIBUTION OF WEALTH.

The statistics of the federal income tax is reaching directly less than one half of one percent of the population. It further appears, from the published statistics, that 1598 persons with incomes exceeding $100,000 paid approximately $11,600,000, or over 40 percent of the aggregate tax collected. In Wisconsin 60,860 persons were assessed in this year, representing about 2.6 percent of the population. Of these, 667 persons having taxable incomes of over $10,000 were assessed for 48 per cent of the total tax. The income tax is still, therefore a rich man's tax. It is drawn predominantly from the rich and in that sense it plainly equalizes the distribution of wealth. Though no similar statistics have been seen relating to inheritance taxes, it is almost certain that the inheritance tax works in the same general way. Both taxes draw far more from the rich than from the poor and plainly operate to equalize wealth in the first instance. The paper addresses the questions of whether the rich should continue to be expected to equalize wealth in the long run, and are their direct effects counterbalanced by indirect and less obvious consequences.