LOCAL TAXATION IN THE UNITED STATES State and local taxation in the United States varies greatly from State to State, and there are practically as many systems as there are States and territories. The State Constitutions provide the outline of the system. The States control by general laws all taxes levied by their political subdivisions, the counties, cities, towns, school and other districts ; the State and local taxes may be there fore explained together.
The general property tax is the chief source of State and local revenue in the United States. It is used in every State and Ter ritory. In all but a few States it affords revenue for the State and for all of its political subdivisions as well. In a few States the State Governments draw little or no revenues from this source depending on other taxes which are, however, sometimes only modified forms of the property tax. This tax has an unbroken historical existence from the earliest colonial days down to the present. It began when the people in the towns of New England or in the counties of Virginia and other southern colonies were confronted with the necessity of raising money for some common purpose such as the building of roads and bridges, or later the support of schools. The original idea was that each resident should contribute to the common fund in proportion to his ability. In assessors, officers appointed to apportion the taxes, counted up or "listed" the number of acres of land owned, as so many acres of arable land, so many of pasture, woodland and swamp, the number of cattle and houses, and "listed" also all other property such as houses, barns, furniture, etc. Since, obviously, one can not add together such items as 20 ac. of land and five horses without some common denominator, values in money were at tached to the "list." At first these values were quite arbitrary, but as time went on an effort was made to make the assessed or "listed" values correspond to the selling or market values of the property. People who earned a living from trades or professions were often "listed" or "rated" at arbitrary sums for their "faculty" or ability to pay, based on some rough estimate of their earnings. Sometimes heads or polls were similarly listed as property at an arbitrary value of, say, $ioo, the resulting tax being, perhaps $1.00.
As the tax developed it became, during the first part of the 19th century, a personal tax, the amount of which was to be determined in each case by the taxpayer's "estate," that is, in proportion to everything he possessed. But as time passed and the forms of ownership became complicated, as, for example, mortgages owned by one person, secured by another person's property, or stocks, bonds and contracts of many sorts, the tax became less and less personal. The present fundamental idea is that the tax is levied upon ownable things, rather than on the owners thereof. But traces of the old idea are still to be found. The result is that the tax, especially as used by the local governments, is primarily a tax on tangible property. That means that it is a tax on all real estate within the taxing jurisdiction and on such tangible personal property, as furniture, stocks of goods and merchandise, as can easily be found. In many States intangible personal property, such as money due to a person, stocks, bonds and the like, is taxable according to the letter of the law either as all other property is taxed or at lower rates. But inasmuch as such property, in practically all cases, merely stands for and represents other property which is fully taxed, its owners resist every attempt to assess it, and since it is intangible and hence easily concealed, very little is ordinarily placed upon the rolls.
Since probably 85% of this tax is on real estate and physical property of a similar visible sort, a description of the tax as ap plied to this class of property will be given. Each State is divided into assessment districts. In New England, originally, the town ship was the district, in Virginia it was the county, and in cities it was the old "ward." The nature and size of the assessment dis trict is a matter determined by the framework of government and hence varies from State to State. In each district there is an assessor, or sometimes a board of assessment. Where the districts are small, as a single township, or a ward in a city, the assessor can complete the list or roll in a few weeks. But the work, to-day, requires considerable judgment and discretion and is best done when the district is large enough to warrant the employment of a full time assessor with a staff of trained deputies.