The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1902-10-25
DECLARES GENERAL
PROPERTY TAX A FARCE
Prof. Edward A. Ross, of Nebraska Uni
versity, Discusses Problems OF
Taxation.

In the discussion following the lecture
last evening at the Central Park M. b.
church on Problems Of Taxation" by
Prof. Edward A. Ross, of the University
Of Nebraska, Judge Edwin A. Jaggard
propounded a plan for establishing a
system by means of which the large cor
porations doing extensive interstate bust
ness would be required to pay a just pro-
portion of state and local taxes, according
to the amount of business in each state
n locality. The problem of providing
such a system being considered, Judge
Jaggard said:
How would this plan work? The
state might require every corporation do
ing interstate business to file annually a
report setting forth in detail the assets.
liabilities, receipts. disbursements and
business done within and without the
state, and then to give exactly the pro-
portion which the business or property
of hat company within the state bears to
the business done within the state, to de-
the business or property of the taxes re-
quired from the mpa that is due to
each state, and then, from a record of
he business done within the state, to de-
termine the proportion due to each To-
cality. For instance, if 80 per cent of
the company's business and property was
LII IiiS Ct u I11ll1lSSOld, dllu lC-ll u
of it. was in Ramsey county, this county
would be entitled to 10 per cent of the
taxes paid by the company" Prof. Ross
replied that in his opinion the system was
well calculated to produce the result de-
sired.
Prof. Ross pointed out the evils of the
general property tax and suggested sew
eral remedies for the existing inadequate
condition of the taxing system. He said
in part:
of our local revenues is the general prop
erty tax. The foundation of this tax is
the common sentiment of fairness in a
democracy. 1t is desired that all con-
tribute in proportion to their abilities;
and their abilities are supposed to cor
list everything and impose on it a single
uniform rate. Thus you will realize JUS
tice in taxation. This system appeals so
much to the average man, it is so rooted
in American tradition, that only recently
has the mountain of adverse evidence that
has been piling up the last twenty-five
years begun to shake faith in it. Now,
among all students Of American taRation'
that the general property tax as actually
administered, has come to be one of the
worst taxes known in the civilized world.
1.-The tap root of the evil is that with
the growth of cities, the multiplication
of new forms of wealth, and the increasing
compleXity of economic relations, personal
property, WHICH CONSTITUTES Nearly one
half of all property, more and more es-
capes assessment until the system has
become a farce. The census of 1890
showed that four-ffths of the personal
property in the United States escapes
assessment and one-half of the real es-
tate. In New York personal property is
three-fifths of all property and pays one
tenth the taxes. In Brooklyn, in 1898,
personal property paid one-thirtieth of all
taxes; in 1895, one-eightieth. Moreover,
the matter is getting worse.
There are several ways of recaSting
the general property tax to obviate these
tangible personality. Let mortgages be
taxed as an interest in the and mort
gagged. Exempt stocks and bonds and tax
directly the corporation that issues them.
Another proposal is to exempt all person
ality and tax only real estate.
professional or business incomes pre-
sent forms of t~ax-paying capacity which
are not reached under our present system.
Many authorities therefore advocate a
state tax upon such incomes as are not
derived from property subject to taxa
ton. Such a tax should not, of course,
apply to incomes below certain figures.
Massachusetts does not begin to tax I'M
til the income exceeds 50, 600.
"By means of taxes on inheritance. on
corporations and on incomes it would be
possible for the commonwealth not only
to pay its own expenses, but to come to
the relief of the local units. The reve-
nues received from the public service cor
porations, for instance, might be re-
turned to the municipalities they operate
in, and that from the railroads might be
distributed among the counties in proper
ton to mileage. In some such way it may
be possible. without fouting the deeply
rooted prejudice in favor of. the outworn
general property tax, to introduce lucra-
tive up-to-date taxes which may crowd
it into a subordinate place in our taxing
system. and deprive it of much of its
present power to harm"