670 HARVARD LAW REVIEW An important step in this adjustment has been taken by a com- mittee of the National Tax Association, of which Professor Bullock of Harvard University is chairman. This committee has drafted a plan of a model system of state and local taxation ""^ which, if adopted by all the states, would go far towards remedying many of the evils now incident to the haphazard and contradictory tax systems of the sister states. The recommendations concern us here only in so far as they apply to income taxation. In brief the proposal is to divide income taxation sharply into a personal in- come tax and a business tax. In the taxation of personal incomes, the source of the income is to be neglected except when the federal Constitution forbids, as it probably still .does in the case of income from the national government."^ In addition to the personal income tax, there shall be a business tax on the net income derived from business carried on within the jurisdiction. Extra-state income will thus be taxed only to the ultimate human recipient at his domicil. Business income, as such, will be taxed only where the income is earned. The business tax is to be in lieu of the various other de- mands now made on corporations by way of excises, franchise taxes and the like. For special reasons some other method of fixing the amount of the business tax may be substituted for the reference to the net income. These proposals, it is evident, will not do away with double tax- ation; but they will greatly minimize its inequities and other evils. There must continue to be two conceptions underlying an income tax: the earning of the income, and the enjoyment of the fruits thereof; the business, and the person. These two conceptions must be driven together in harness and under harmonious, if not uni- fied, control. Only by securing the adoption of substantially simi- lar plans by all the states to which the business of the nation pene- trates can we avoid the complexities and diversities which now beset us. The Supreme Court can only fix the outside limits of -decency. Within those limits there is need for all the intelligence that the states can muster to substitute a reasonable degree of
- " Pamphlet issued by National Tax Association, 195 Broadway, New York City.
The pamphlet will be contained in the Proceedings of the Association for 191 8. " In the next and concluding instalment of this series, consideration will be given to the inferences to be drawn from the opinion of Mr. Justice Pitney in the Oak Creek case, note 2, supra, as to the possibility of an abandonment of the doctrine that a state income tax cannot include the income from the federal government.
