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227.

Taxation for
Particular
Purposes.

may be mentioned as miscellaneous examples-some mandatory, some merely permissive. The characteristic ones, however, are the permissive or mandatory exemption of public property and the property of educational, religious and charitable institutions. Five states' authorize their legislatures to exempt manufacturing establishments for a limited time, "as an inducement to their location."

Constitutional provisions applying to taxes for state, local and school revenue are frequently met with. Thus more than one-third of the states* expressly command the legislature not to fail to provide for the governmental expenses of the state, usually specifying as the means an annual tax levy. Texas forbids the legislature to impose financial burdens on the people except in order to "raise revenue sufficient for the economical administration of the government," and then proceeds to enumerate certain purposes which may be therein included. Georgia limits the power of taxation "over the whole state" to the securing of support for the state government and institutions and elementary education, payment of the principal and interest of public debt, suppression of insurrection and defence of the state and pensions for soldiers and their widows.

Taxation for the support of schools is sometimes merely permissive, but often made manadatory upon the legislature. Thus in Floridas

a special tax of one mill on the dollar of all taxable property in the state, in addition to the other means provided, shall be levied and apportioned annually for the support and maintenance of public free schools.

City property: e. g., Cal.. XIII. 1; Ida.. VII. 4; Tenn., II, 28; Wash., VII, 2.
County property e. g., Ariz., IX, 2; II., IX. 3.

Town or township property: e. g., Mont., XII, 2; S. C., X, 4.

State property: e. g., Okla., X. 6; Wyo., XV, 12.

Public bonds: Ariz., IX. 2; Cal., XI, 8a, 18, XIII, 14; N. M., VIII, 3;

O., XII, 2; Va., XIII, 183, 183a.

e. g., Ala., IV, 91; Ind., X, 1; Ky., 170; Tenn., II, 28; Tex., VIII, 2; Va., XIII, 183d.

se. g., ib., save Va., 183e.

e. g., ib., Va., XIII, 183f.

1Ark., X, 3; Ky., 170; Miss., VII, 182, 192; Okla., X, 6; S. C., VIII, 8. 2Ky., 170.

Concerning doctrine that taxes must be for a public purpose,-see article by H. L. McBain, 29 Political Science Quarterly.

e. g., Ariz.. IX, 3; Ill., IX, 1: Mich., X, 2; Mont., XII, 1, 9: Wyo., XV. 4. "III, 48, 51.

VII, sec. I, 1.

e. g., Ala., XIV, 260.

8XII, 6, 8.

Each county shall be required to assess and collect annually for the support of public free schools therein, a tax of not less than three mills nor more than five mills on the dollar of all taxable property in the same.

Arkansas provides that the legislature may delegate the taxing power "with the necessary restrictions" to subordinate "political and municipal corporations" to the extent of "providing for their existence, maintenance and well being, but no further." Similar provisions are found elsewhere, and there are often prohibitions upon legislative authority to tax localities, but permitting them, by general laws, to raise revenue for their individual purposes."

228. Home Rule

Colorado permits cities framing their own charters to fix their own tax rates and to some degree to determine their meth-in Taxation. ods of taxation. Complete control by local governments of their methods of taxation is advocated by many students of the subject, not only because cities are deemed by them better fitted. than the state legislatures to determine their financial methods and the extent of their expenditures, but because it gives an opportunity for experiments in new ways of taxation that could hardly be undertaken on a state-wide scale. Thus the city of Pueblo, in 1913, adopted an amendment to its charter in order to exempt improvements first to the extent of half and after a year to ninety-nine per cent. of their value, placing the tax instead upon the land alone.*

229.

Among the most frequent constitutional limitations upon Tax Rates. the taxing power are those upon tax rates. For general state purposes the fixed maxima vary from two mills to one cent on each dollar of the assessed valuation of the taxable property of the state. Missouri' has an especially interesting provision making the county tax rates variable with the assessed value of the property of the counties and the rates in cities and towns variable with their population. Thus counties having not more

9II, 23.

1e. g., Wash., VII, 9.

2e. g., Ky., 181; Mont., XII, 4; see, also, Cal., XI, 12.

3XX, 4, 6, 7.

"The amendment was repealed in 1915.

"S. D., XI, 1.

Ida., VII, 8. May be increased by popular vote.

"X, 11.

230.

Assessment.

than six millions of taxable property may raise their rates to five mills, while those with thirty millions or more are limited to three and one-half. Cities and towns with 30,000 or more inhabitants may not exceed ten mills; those having less than 1,000, two and one-half mills. In Oklahomas the ad valorem tax for both state and local purposes must not exceed thirty-one and one-half mills.

The surrender" or delegation' of the power of the legislature to levy taxes is sometimes expressly forbidden and the consent of the people or their representatives to tax measures is sometimes expressly required. In Mississippi3 the consent of an extraordinary majority of the latter is required to pass a bill "providing for assessments of property for taxation."*

The assessment of property for taxation is neglected by few of the constitutions. For example, at least ten require it to be at the true value, and Louisiana forbids it to exceed the true value of the property. New Mexico enjoins that land held in large tracts shall not be assessed at a lower value per acre than similar lands held in smaller tracts, and Delaware' requires the assessment to include the rental value of lands and buildings. Local legislation affecting assessment is sometimes forbidden, and the use of the same assessment for both state and local purposes is sometimes required." Utah and Washington1 authorize the deduction of debits from credits.

8

Illinois2

allows the legislature to determine whether assessors shall be elected or appointed.

X, 9, 10; Schedule, 25.

Does not include taxes for pre-statehood debt.

e. g., Me., IX, 9; Minn., IX, 1; N. D., XI, 178; Va., IV, 64. See, also, Ark., II, 23; Ga., IV, sec. I, 1.

1Ala., XI, 122; Mont., V, 36.

2e. g., N. C., I, 23.

3IV, 70 (three-fifths present and voting).
"See, also, Ark., V, 31; Va., IV, 50.

on passage in N. Y., Vt., Wis.

An extraordinary quorum is necessary

"Ky., Mich., Miss., N. J., N. M., N. C., Okla., S. C., Tex., Va. See, also, Ala., XI, 211; Colo., X, 3 (just valuation).

VIII, 6.

VIII, 7.

se. g., Ariz., IV, 9; Wis., IV, 31.

e. g., La.. 225; Va., VIII, 128.

Speaking of state taxes levied and collected by local officials, Macy and Gannaway (Comparative Free Government, p. 338) say that "probably no other of the states' activities has given cause for more complaint and greater dissatisfaction."

'XIII, 3; VII, 2.

2IX, 1.

In California and Wyoming land and the improvements thereon must be separately assessed and in the former cultivated and uncultivated lands of the same quality and similarly situated must be assessed at the same value. Plowing is not to be considered as adding to the value of land in New Mexico and North Dakota,* nor are the cultivation upon it of orchards, forests or hedges in Colorado and Nebraska.

In nine states the assessment of the property of public utilities, such as railroads and telegraph lines, or corporations owning property in more than one county, is especially provided for -usually by requiring that it shall be by a central board. Indeed, as a matter of practice, in more than half the states, central boards, usually called tax commissions, have been created and given not only this duty, but the duty of supervising all assessments. The recent investigating commission of Kentucky went so far as to propose the establishment of

a permanent Central Tax Commission in charge of all taxation in the State and responsible for the just administration of the tax laws, which shall specifically:

a. Have and exercise strict supervision over the local assessment officers, instruct and guide them in all their work, and after the term of office of the County Assessors recently elected has expired, to organize a corps of expert assessors, under civil service rules, to take the place of the one hundred and twenty County Assessors who now work without supervision, instruction or training. Create larger assessment districts by the combination of counties into groups, so that assessors shall have work enough to occupy them the year round.

b. Take the place of the present State Board of Equalization. Exercise control over the local boards of supervisors and guide them in their work.

C.

d. Do the work of assessing railroads, franchises, bank stock and other property now assessed by ex officio boards.

e. Look after the license taxes, inheritance taxes and all other taxes.

3XIII, 2; XV, 1.

VIII, 6; XI, 177.

XVIII, 7; IX, 2.

La., 226: Mich., X, 5; Miss.. IV, 112; Mont., XII, 16; N. D., XI, 179; Okla., X, 19, 21, 34; Tex., VIII, 8; Va., XIII, 171, 176, 179; Wyo., XV, 10.

'Report of the Special Tax Commission of Kentucky, 1912-14, p. 9.

231.

Conclusion.

8

Finally, equalization is regulated by a few constitutions, and most of them have something to say about the collection and payment of taxes."

In conclusion it may be said that no one attempts to defend the taxation systems of American states. As has already been intimated, however, "what we do not like is that we are taxed,not that we are stupidly taxed," and not until recently has the burden of taxation been sufficiently weighty to emphasize the injustices of our methods. The very sincere and genuine study of the situation by state commissions and university classes during recent years, encouraged by some forward steps on the part of our law-makers, renders the outlook, however, decidedly hopeful.

TENNESSEE NOTE.-The distinguishing feature of the Tennessee system of taxation, says the federal report on the revenue systems of the states, "is a carefully worked-out system of privilege taxes upon the exercise of various occupations which supplement the general property tax." The constitution makes mandatory the taxation of all property at the same rate, according to its value, "so that taxes shall be equal and uniform throughout the state." The legislature is permitted to tax merchants, peddlers, privileges and the incomes from stocks and bonds that are not taxed ad valorem.

One thousand dollars' worth of personal property must be exempt to each taxpayer and the "direct product of the soil" must be exempt in the hands of the producer and his immediate vendee. The legislature may exempt the property of the state, counties and municipalities used exclusively for public purposes and that of religious, charitable, scientific or literary institutions. Goods manufactured of the produce of the state must not be taxed otherwise than to pay inspection fees. The courts have been very strict in construing the provisions of the constitution that all property must be taxed. Even public bonds cannot be exempted."

Adult male citizens of the state, unless exempt by law on account of age or other infirmity, are required to pay a small poll tax.

se. g., Cal., XIII, 9; Colo., X, 15.

e. g., Colo., X, 3; La., 48, 233, 243; Okla., X, 30; Tenn., XI, 11; W. Va., XIII, 6.

1Wilson, Congressional Government, 131.

Wealth, Debt and Taxation, 660.

*II, 28, 29, 30.

4See Railroad v. State, 55 Tenn., 663; Memphis. Etc., Ry. Co. v. Gaines, 3 Cooper's Chy., 604 (611); see, also, Reelfoot Lake Levee Dist. v. Dawson, 97 Tenn., 151.

"Keith v. Funding Board, 127 Tenn., 441.

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