The San Francisco call., 1905-01-04
TAXATION SYSTEM
WAS IN NEED OF
RADICAL CHANGE

In my inaugural address, two years
ago, 1 expressed the belief that the
time was near at hand when the peo-
pie of California should consider the
question whether they ought not to
introduce radical changes in their rev.
enue and taxation laws, especially in
relation to the raising of revenue for
State purposes. The main reasons for
this belief were the escape from taxa
tion of large amounts of personal prop
erty and the difficulties which will al
ways exist in securing under the pres
ent arrangement fair assessment
and just equalization between the
counties The further opinion was ex-
pressed that the object aimed at
ought to be the eventual separation
of State and county taxation, giving
to each of these political divisions it's
own subjects of taxation and its own
assessment machinery.
During the past two years nothing
has occurred to change the belief then
expressed; but much has occurred to
confirm 1t. There has been consider
able popular discussion of the pro-
posal that new State revenue system
is needed. and the tone of this discus
sion has been uniformly favorable. At
the same time the movement in other
States. to which also / referred In my
former message, has continued to be
away from the employment Of the ad
vaIorem, or general property, tax as
the basis of all State revenue collec-
tions, and toward the development or
different systems in different States.
according to their several opportuni-
ties and needs.
This revenue question is no new one
in California, nor is this the first time
that the demand for an improved sys-
tenn has been heard. A short review or
the history of State taxation will be
interesting, and may help us to bet
ter knowledge of our needs.
In the very earliest days Of our State
its revenues were derived largely from
merchandise and other licenses, but the
general property tax was soon put in
operation and for a good many years
gave general satisfaction. Personal
property for a time constituted nearly
one-half of all the property assessed.
and therefore 1t was not complained
its due share Of taxation. The Legisla-
ture assumed the right to exempt from
taxation certain kinds of property,
such as churches, hospitals, the prop
erty of widows and orphans. growing
crops and mining claims; but when
danger arose from the extent of the ex-
emptions the Supreme Court came for
ward and declared them all to be un-
constitutional.
But in time serious evil arose from
the inequalities Of taxation as between
the various counties, which there was
no means of controlling. In the poorer
counties the assessments were kept
high, because only so could enough
taxes be raised to pay the expenses Of
county government. and as the same
assessments were the basis for State
taxation those counties contributed
more than their just share to the State
treasury, while the weather. counties
were able to keep their assessments
low apd to escape their due proportion
of general taxation. 1t was asserted
that In some counties the assessed
values were so per cent OF the true
values and in other counties no more
than 20 to 80 per cent. AS Governor Pa
checo told the Legislature, While the