The general property tax is most successful where there are mainly neighbourhood charges to be apportioned among neigh bours. But when, among the taxpayers, there are great corpora tions owning property, such as railroad lines, electric light and power plants, extending through many assessment districts, local piecemeal assessment becomes difficult. Hence has arisen the tice of taking the assessment of all public utility companies, finan cial institutions such as banks and insurance companies, and some other large corporations, out of the hands of the local assessors. These are then either assessed centrally as units by the State tax commission and the assessments apportioned to the districts, or the taxes from these sources are taken over entirely by the State. In the latter case the methods may be changed and the tax based on gross receipts or some other factor. When that is done the amount of the State taxes to be apportioned to the localities is smaller. In several States the taxes on the segregated classes of property supplemented by other taxes have been sufficiently large to reduce the State's share of the general property tax to nothing or to a very small amount.
Exemptions are an outstanding feature of the property tax. Property used for religious worship, for educational and charitable institutions, and cemeteries is universally free of taxation. Vet erans of war are often given liberal exemptions, especially if possessed of only small amounts of property. Very often a small amount of household furniture, tools, etc., is allowed as an exemp tion to everybody.
Miscellaneous Taxes.—Poll taxes come next to the general property tax in age but are slowly passing into disuse. Among the origins of these taxes was the idea that all able-bodied men should go out for at least a few days each year and work on the roads. Those who could not or did not want to do so could pay a tax in lieu of work. But there was, also, the idea that everybody should pay a little, be it only a dollar a year, to support the Government under which he lived. Poll taxes have been used as above for roads, and also for schools, hospitals, in commutation of service in the militia and occasionally imposed on special classes such as "foreign miners." But the trouble and cost of collection and their inherent inequality has led to their abandonment in many places.
Licence taxes on selected businesses and occupations are ex tensively used. These are annual charges on the privilege of doing business of the kinds selected for taxation, and payment is shown by a "licence" which reads as if it granted a privilege. The classes
of business selected are frequently those which use comparatively little property covered by the property tax. But that criterion is not carefully applied. In the southern States the licence taxes are very numerous and long tariffs of rates covering hundreds of classes of licenses are enacted.
Income taxes have come into use in several of the States. There are now eleven States with some kind of an income tax enacted mainly since 1911. In Wisconsin and Massachusetts the income tax was introduced as a sort of substitute for the taxation of in tangible personal property under the property tax, which, as explained above, is not satisfactory anywhere. In those States the tax is centrally administered but the proceeds are distributed in part to the localities. In New York the income tax is a part of the programme of supporting the State Government with as little recourse to the general property tax as possible. Other States have income taxes which vary greatly in form and purpose. In general the rates are graduated but not very high, and the personal exemptions much smaller than in the federal income tax. In some States the tax falls on corporations as well as individuals.
Inheritance taxes, or corresponding death duties, are used in very nearly all the States and are State taxes, not local taxes. In a few States there are estate taxes which, like the federal tax described above, fall on the entire estate of the decedent. But in most States these taxes are on the distributive shares received by the heirs and other beneficiaries. In these cases they are at rates graduated in two ways. (I) They are graduated by the re lationship to the deceased. Thus the widow, or husband, the children or the father or mother are taxed lightly and have large exemptions. The brother or sister and the nephews or nieces are in a class taxed more heavily than the direct heirs. Cousins often form a third class with still higher rates and finally the heaviest rates and smallest exemptions apply to bequests to strangers to the blood. (2) For each class of beneficiaries the rates increase with the amount of property received. Difficulties of the gravest sort have arisen in the administration of these taxes when the property left is scattered in several States. Gradually the follow ing principles are coming to be, but are not yet fully, recognized: (I) real estate and tangible personal property are taxable where physically located ; (2) intangible personal property is taxable only by the State in which the deceased had a residence.