The Minneapolis journal., 1902-02-11
SEEKING LIGHT ON TAXATION
Members Of the Legislature Hear an Address by
LAWSON Purdy Of New York.
A Defense Of the Tax Bill Made by General
II. W. Chids Yesterday.

the census of ten years ago, they were at a
loss for an answer. After the conference in
| quiries were addressed to experienced inves-
tigators In Indiana who had no prejudices for
or against the law, and their testimony was
| what one would expect In view of the expert
ence of other states. Indiana has few large
/ cities and the difficulties Of enforcing listing
| system are not SO great as in many other
| states At the same time, the success of the
| law Is by no means sufficient to commend it.
| 1t Is to be remembered that the results spo-
ken Of by the Indiana officials were accom-
plished in the first few years of the operation
of the law. The success is always greater
| during the first year. as after that the law
| breaks down in some counties, and the conta-
| gion spreads, and citizens of other counties
are unwilling to tax themselves for the benefit
| of the counties in which the law has failed.
In both Ohio and Indiana spies are en-
ployed, called ''inQuisitors'' in Ohio and "fer-
| rets'' in Indiana, system which must be de-
! moralizing to those who do the work and to
| those who suffer from being spied upon. Sto-
nes are not lacking of corruption on the part
| of the spies. and this must be the inevitable
result.
Taxation Of Mortgages.
The code recommended by your commission
has undoubtedly some good features; it dis
| plays labor and ingenuity worthy of a better
cause. If, however, the experience of 1000
years Is worth anything, we can confidently
| predict that your code. If adopted. will also
break down. Your own commission on page
| seven, says: ''It has long been the policy
| of this state, well as of many other states,
| to tax mortgages and other forms of credit.
| Long experience has demonstrated that such
a law can at best be but imperfectly enforced.
Students Of taxation, with scarcely an excep-
ton, denounce it as fallacious in principle
and fruitful source Of immortality" There
| are several reasons for this, but one reason
| is evident Good railroad bonds and guar
anteed stock sell at prices which do not take
| into account any taxation Of the security.
Untaxed they produce income of less than
per cent and sometimes little more than 3
| per cent 1t is obvious that no man will sub
NIT to taxation on such securities without
a struggle; he feels that it is unjust that he
should have half his income confscated and
behaves any man would when held up by
| a highwayman; he feels that any defense he
| can interpose is legitimate. It is supremely
| true, as your commission says page seven:
| There is manifestly a widespread and we'll
| founded sentiment that the law is itself un-
| just in its attempt to subject certain classes
of personal property to taxation. No Jaw can
| successfully be enforced which Is repugnant
to a peoples sense Of justice.
Second-You may adopt the commits !:
constitution as well. ss- r+z 4s:
I If you decided TO adopt the amendment to
the constitution it would certainly be un-
necessary and unwise to adopt the code. By
doing so you will confuse the issue before
the people and imperil the adoption of the
! amendment. If you adopt new code some
will doubtless desire to give it trial and
refuse at this time to make a change In
the organic law With the constitution
amended as proposed by the commission, the
legislature will be freed from the restrictions
now imposed upon them and will doubtless
soon make changes which the commission
says are necessary for national tax sys-
TEN. The adoption of the code no matter
how we'll it may be devised to carry out the
present constitutional mandates, will in
evitably lead to litigation to determine It's
, construction. The meaning of the best law
ever framed has never been definitely known
| until it has been construed by the courts. and
this law will not only be no exception to the
rule, but because of Its stringent provisions
will probably lead to an unusual amount OF
litigation On page six your commission
says: n&
So universally is the evasion Of the law IN
the assessment Of personal property practlced,
and so notorious is the fact that much, OF the
greater volume of 1t Is unassessed, that its
evasion Is oftener regarded a virtue +S man q
per centum of the personal property listed Tor
assessment
These statements of the commission are
fully confirmed by the experience Of the lead
ing tax experts of the country. In his report
to the general assembly of Maryland in 1888,
Professor Richard T. Ely, on page 104, says:
/ have first to remark that the one uniform
revenue or the chief source-the main feature
in direct taxation--never has worked well III
any modern community or state in the entire
civilized world, though it has been tried thou
sands of times, and although all the mental
resources Of able men have been employed
to make it work well. have read diligently
the literature Of finance to find an example,
but in vain, and lest this should not be sufn-
ciently trustworthy, have made 1t my bust.
ness, in my capacity of tax commissioner, to
visit typical states and cities and to make
inquiries in person Of citizens well of
officials intrusted with the administration of
5 yssfd 4tana aed
Georgia.; Columbus, Ohio; Madison, Wiscon- |
sin; Toronto, Montreal and Quebec, Canada. |
Il Arm I'm all all that have M % said about the imprac-
ticability Of the one uniform tax upon real
and personal property.
Professor Edwin R.. "A. Selgman, in his
work on 1.-THE General Property Tax" page
g. says
''Practically, the general property tax, as
peradventure, the worst tax known in the |
civilized world. It puts premium on dis !
honesty and debauohes the public conscience.
It reduces deception to a system and makes |
a science of knavery. It presses hardest on
those least able to pay. It imposes double
taxation on one and grants entire immunity
to the next. In short the general property
tax Is SO fagrantly inequitable that its reten-
ton can he explained only through ignorance
or inertia. It Is the cause of such crying in
Justice that its abolition must become the
battle-cry of every statesman and reformer.''
o.......................... ........................o
Third-You may adopt the amend
ments to the constitution recon-
mended by the commission.
With the adoption of these amendments the
Legislature will be free to frame rational
tax system and there can be no question
that the legislature should be free. On page
|52 your commission says :. mo fact is more
firmly impressed upon the mind of the COM
mission than the necessity Of an early
amendment Of article Of the constitution of
this state. Since the adoption of the original
constitution, great changes and developments
have taken place in the industrial world
Both the subjects and the objects Of tax
alton are, in many respects, different now
from what they then were.' On page "a:
1.-The legislature of this state should be left
unhampered in dealing with the subject ac-
cording to its wisdom, save as restrained in