The April 21, 2009 NYT reports on tax policy as seen through the eyes of President Taft:

President Taft agrees with Senator Aldrich that no new form of taxation will be necessary or advisable in case the Tariff Bill, as finally enacted, will raise sufficient revenue to meet the expenses of the Government. In case additional revenue is necessary, the President is in favor of trying first an inheritance tax, and next an excise tax on corporations.

How refreshing that the President didn't want to tax for taxation's sake.

An income tax is the kind of additional revenue measure least of all favored by Mr. Taft. In fact, he is of the opinion that such an income tax is undesirable, because, in the first place, it would fly directly in the face of the Supreme Court, and, in the next place, it would be a direct incentive to perjury. Certain men would be sure to evade it by perjury, while others paid it honestly, and it would be an unequal tax.

The President does not mention, or at least it wasn't reported, the incentive to avoid, rather than the more distasteful (from the government's point of view) evade, an income tax. One wonders if Taft is taking a merely pragmatic view that the perjury would reduce the ability to collect the tax or if he is making a moral pronouncement.

In that event [that there is insufficient revenue raised by the Tariff bill] his effort would be to secure the adoption of the inheritance tax. He believes that an inheritance tax is the most certain of collection and the easiest of all forms of additional taxation suggested.

It is true that dead men tell no lies, thus the perjury concern is probably off the table in the case of an inheritance tax. However, there is still an incentive to avoid the inheritance tax or at least the incentive to reduce the impact of the tax on one's estate. Again, no mention of avoidance.

If the Federal inheritance tax is not to be tried, then the President is in favor of an excise tax on the profits of corporations. He is convinced that it would entirely constitutional, and that no great difficulty would be experienced in its collection.

As if corporations are black boxes rather than being managed by the same households about which the the President expresses perjury concerns? Excise taxes on corporate profits are simply profits on the individuals who hold the residual claims on the firm. Supposedly the corporate profits tax is a path of less resistance but a corporate profit tax is still distortionary and creates incentives to avoid the tax.

Taft then hits a theme that sounds rather similar to today:

Mr. Taft agrees with Senator Aldrich in the effort to reduce expenses and has told his callers that he would back the Senator to the limit in everything aimed at that end. He thinks that there could be great savings in the War and Navy Departments. He has been informed by navy officers that consolidation of the bureau work in the navy yards will save at least $5,000,000 a year. The President means to go at this question of reducing expenditures with the greatest possible vigor.

Perhaps there was a culture of "small g" government in the early 1900s which would give Taft's words credibility. On the other hand, generally speaking vigorously trying to reduce the expenditures of the government in one area seems to be offset by vigorous increasing expenditures in other areas.

Alas, no new problems, only our problems.