PROPERTY AND CORPORATION TAXES § 1. Importance of taxation as a public question. § 2. The general property tax; nature and difficulty. § 3. Ambiguity of the term "prop erty." § 4. Various temporizing policies. § 5. A consistent policy of wealth-taxation. § 6. Needed reform of assessment. § 7. Separation of state and local taxation. § 8. Federal taxation of commerce. § 9. Proposal of the single tax on land values. § 10. Various reforms in land taxation. § 11. Difficulties in taxing corporations. § 12. Special taxes on banks. § 13. Special taxes on insurance. § 14. Special taxes on transportation. § 15. Alternative policies in corporate tax ation. § 16. General plan for corporate taxation.
§ 1. Importance of taxation as a public question. The discussion of taxation has accompanied the growth of free government in England and America from the time of Magna Charta. The control of the public purse has been found to give the key to political power, and therefore it has frequently become the occasion of conflict between the monarch and the people. But in our own national history, since the adoption of the Constitution, taxation has not had a leading place in politics except in the one aspect of the tariff. The constitu tional question of states' rights long absorbed most of the in terest of citizens and of legislators. But, with the quickened attention of the public to economic questions, the problem of taxation became of increasing importance.
It has come to be recognized that taxation can be made to play, and is bound to play, a leading part as an agency in the distribution of wealth, and thus it is the center of much of almost every proposal of social change and betterment involves the ardent controversy regarding social reform. Ultimately, some cost. The question then must be answered, Who is to 288 receive the benefits and upon whom and how shall new taxes be levied to pay the cost? Further, it is often urged that this result of taxation in redistributing incomes is in itself (or can be made) a virtue ; and some even see in tax reform the answer to the largest social questions of our time. We are
now to take up a few of the more important problems of taxa tion, to see the difficulties, and to suggest the direction in which their solution is to be sought. The tariff having been already separately considered, the chief kinds of taxes we have here to treat are property taxes, general and special, and inheritance and income taxes.
§ 2. The general property tax; nature and difficulty. The general property tax is a tax of which the rates both of assessment and of levy are uniform and equal in proportion to the value of all (or nearly all) property in the taxing district.' There are always some exceptions of certain kinds of property, or of the property of certain persons, or of prop erty and things put to certain uses—public, educational, religious, and charitable in their nature.
The federal government levies no general property tax, but the other branches of government 2 receive about three fifths of all their revenues from it.
At first view nothing would seem to be simpler and juster in principle than such a plan of taxation; but those who have most carefully studied its practical operation, almost with For example, the, constitution of Alabama declares: "All taxes levied on property in this st.tte shall be assessed in exact proportion to the value of such etc. And the constitution of Indiana de clares: "The general assembly shall provide, by law, for a uniform and equal rate of assessment and taxation of all property, both real and personal, excepting," etc. Similar statements occur in most state constitutions.
2The general property tax in the United States constitutes: Of the revenue receipts of the states 38 per cent.
Of the revenue receipts of the counties 78 per cent.
Of the revenue receipts of the incorporated places-80 per cent.
The total amount collected in this way in 1913 was over $1,083,000,000.