The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-12-21
INCOME TAX ONLY
FOR STATE NEEDS
Recommendations of iheC Cor
poration Commission.
NO AID VAL0REM TAXES
A Suggestion in Line With the Most Progress.
siye Ideas on Methods of Taxation.
Those Able to Bear the Burden
Would Be Taxed.

The Corporation Commission, in its re-
cent report, makes a recommendation
with reference to taxation for State pur-
poses that ought to be widely discussed.
The recommendation. if carried out. would
be radical departure from the present
method of taxation. The commission be-
lieves that no tax should be levied on
property for State purposes, but that the
whole revenue should be derived from
tax on incomes, licenses, inheritance tax
and other like sources.
The recommendations along this line are
in keeping with the modern trend OF
ideas in the most progressive States. New
Jersey levies no State tax at all, deriving
all its State revenue from tax on cor
porations, franchises. etc. Governor
New York will hereafter levy no tax
on property for State purposes, the in
direct taxes yielding sufficient revenue to
pay all the expenses of the State govern
ment in every department.
1 was talking yesterday with Hon.
Franklin Mcneil. chairman Of the Cor
poration Commission. No man in North
Carolina has given the subject of&taxation
so thorough a study as Mr.. McNeill. He
has studied the methods in every State
in the Union. and his recommendations
embody the plans, as he thinks, that are
best fitted for the needs of North Car
DINA.
Below are given questions and an
swers which will throw light upon the
recommendations of the commission in
reference to the suggested income tax:
Is the proposition 10 tax incomes, which
is recommended in your report, anything
new?
No, this has been the law in England
since 1912 and the principle was intro
duced into our revenue law in 1850, but
was originally confined to incomes from
interest bearing securities and stock in
corporations, and salaries and fees.
Will It be the effect of this, if it be-
come a law. to relieve land and personal
property from taxation for State and
pension purposes?
No. it would relieve them of any ad-
valorem tax, but would leave them sub
ject to the income tax just as incomes
from other sources-that is to say that
one who received an income from prop
erty in excess of $1,000, provided the ex-
emption remain as it is now. would be
liable to tax on the excess just as if the
income was derived from any other
source.
What data hare you to show the
amount of revenue that would be de-
rived from any income tax?
The tax list for the year 1901 shows in
come from salaries and fees and from
property not taxed, in round figures. OF
about 81 200, 900 over and above the ex-
emption of 81, 600 to the tax payer. The
railroads of the State. by annual re-
port for fiscal year ending June Both
show net earnings amounting to $685.
O73
Telephone companies. ............ $42,17l
Telegraph Companies ........... b9,2sS
Street railways .................. 94,2oi
Express companies. .. $685.
The capital stock of banks in the State
is $6,793, 564. 1t would be reasonable
estimate to say that this will earn on
an average about ten per cent. or 1919,
asa.
Building and Loan Associations have
assets amounting to $2,020,676. Esti-
mating that this will earn an average OF
six per cent, the income would be $780,
0s7
For further estimates we will have to
rely to some extent On census reports. The
census for 1900 reports that 1926 manu-
featuring establishments in North Caro-
lima had a net income of SIS, sec, 2OS in
the year 1899, and that there was a net
income from agriculture of $57 900 900 for
the same YEAR
In addition to incomes from above
sources, there would be incomes from all
other real estate and personal property
besides that employed in agriculture and
from merchants and all other traders
and of corporations doing business in the
State besides those above mentioned
Making all due allowance for over-esti-
mates in above figures, there cannot be
doubt that abundant revenue for State
and pension purposes can be had from
a reasonable rate on incomes in excess Of
$1,000.
Do you recommend that the tax be
imposed on net or gross incomes?
We recommend that it be on net in.
comes. This is the rule in England anC
was the way incomes from interes
bearing securities were taxed in Nortl
Carolina during the decade from 1850 t.
1860. and. it is the just and fair plan
There would not be danger of evasion an
fraud, provided a reasonable tax rate i