y the conflict of interests between
his district as a whole and other districts. The lower the ratio of
assessment to true valuation in any township compared with that of the
other tax districts, the smaller the proportion of county and state
taxes that the people of the district have to pay. Willingness to
under-assess property often becomes thus the chief virtue of an
assessor in the eyes of his political constituents. This has led in
many cases to absurd underassessment, which boards of equalization
have proved powerless to remedy in any great measure. A sounder plan
would be general state assessment, with a permanent expert board of
commissioners employing a corps of state assessors under the merit
system of appointment. This plan has as yet been applied only to
assessment of railroads and some other public-service corporations.
Sec. 7. #Separation of state and local taxation.# For the reason just
indicated the failure of the general property tax has been most
conspicuous where it is used as a basis for state taxation. This has
led some financial students to advocate the plan of separation of
state and local taxation. This means the assignment of certain sources
of revenue (such as corporations and the liquor business) primarily
or exclusively to the state, leaving all real estate and the general
property of non-corporate persons to be taxed by the counties and
minor divisions under the general property tax. The plan has been
increasingly applied in New York, until, in 1906, it became almost
complete. In 1910 the plan was adopted in California; and it is
largely used in New Jersey, Connecticut, Delaware, and Pennsylvania,
and to a small extent in some other states. An efficient state
assessment of general wealth would accomplish most of the advantages
claimed for this plan, while avoiding some of its dangers.
Sec. 8. #Federal taxation of merchandise and acts in commerce.# Tariff
and internal revenue duties constitute the two chief revenues of the
federal government. Both of these are mainly taxes on wealth. Unlike
the general property taxes they are not levied upon the main body
of wealth held in possession, but almost entirely upon articles of
merchandise and upon acts in course of trade. Stamps on receipts,
checks, deeds, bills of sale, and licenses on the sale of liquor
and tobacco are taxes on business acts which are necessary to the
acquisition, use, or expenditure of wealth. Goods imported are taxed
at the
|