FROM OUR BACK PAGES

By D. Michael Bain, K.C.*‡

Mr. E.L. Looney of the Texas bar has in a recent number of the Texas Bar Journal stated neatly the question vital to lawyers and other professional men for revision of income tax laws by which they may in the days of high productivity provide for their lessening returns. Mr. Looney says:

Nearly a century ago Karl Marx urged that all wealth be redistributed by banning all inheritance from one generation to another and by a progressive income tax which would be confiscatory in the middle and upper brackets.

The plight of the lawyer today affords an apt illustration of the effects of such unrestrained federal borrowing and resultant taxation. A generation or more ago it was not uncommon for lawyers, by dint of their ability and hard work, to become reasonably wealthy from the practice of their profession. Today, a lawyer, if he has any reasonable expectation of acquiring a competence to provide for his family, must do so in extra-curricular activities outside his profession wherein he can avail himself of the lesser taxes on capital gains or in which he is given an allowance for depletion.

The American Bar Association and our own Texas Bar, as well as other professional groups, are urging that the professional man whose earnings depend alone upon his ability to render services, be given a depletion allowance, for it is as certain as death itself that a lawyer’s ability to earn depletes as certainly as mineral resources and depreciates as surely as does any manufacturing plant. At best this proposal would only be a partial solution of the problem.

* Reprinted from (1954) 12 Advocate 140.

The only complete solution lies in a revision of our income and inheritance tax laws with an elimination of what Karl Marx referred to as “the germ of automatic progression.”

The very foundation of the free enterprise economy of our capitalistic system is in jeopardy. The “take” of the government from the earnings of the citizen leaves too little for the person whose efforts produced them.

Chief Justice Marshall, one hundred and thirty-five years ago, when he wrote the opinion in the celebrated case of McCulloch vs. Maryland, warned that “the power to tax involves the power to destroy.”

—E.M.