Crittenden record-press., 1911-01-26
TAX SYSTEM
NEEDS REVISION
Address of A. Y. Ford to the
Members of Kentucky
Press Association.
PRESENT MODE COSTS HEAVILY
Tax Revision Does Not Mean Exemp.
tion, But Fair Apportionment on
All Kinds Of Property-It
Means Uniformity.


mid-winter gathering in Louisville:
The tax system of state deserves
careful consideration. because the
power to tax is the power to destroy.
and a tax unwisely laid may easily
drain the life of community or kill
an industry. Approximately $20,000,-
900 year are taken from the pockets
Of the people of Kentucky for the sup
port of the state. county and munici-
pal governments. II is Incompetent.
eible that a thing which means so
much in dollars and cents to the peo-
PIE of the state should generally have
received such scant consideration. Il
IL difficult to understand why it should
have been so hard at any time to Sc
cure from those charged with the
duty of making our laws a careful
Thorough and conscientious study of
the methods by which these large rev.
-enues are raised. We have no specia
complaint to make of the way In
which these revenues are spent
There has been no considerable ex
travagance in the expenditure of our
public funds. Ii Is therefore time thai
We now stop TO consider carefully
whether these large sums are raised
by the best possible methods, whether
they are raised in a way that distrib-
utes the burden fairly as between the
owners of various kinds of property,
whether the tax laws impose the least
burden consistent with the demand
for revenue. and whether they so dis
tribute the burden as TO offer the least
possible hindrance to the development
of the state. Where there is compe-
ttion between communities such as
necessarily exists under modern con-
ditions. an unwise system, laid with
out due consideration of the handicap
Il may impose upon the community in
the sharp competition for new popula-
tion. new industries and new capital.
may easily prove destructive of pros
perity.
Revision Does Not Mean exemptior
The movement for revision OF the tax
system OF Kentucky Is not a movement
IN favor of exemption OF any kind Of
property from taxation. I know IL ha1
been characterized in some quarters re-
csntly as an appeal for an exemption 4
capital from taxation. There = has re-
GENTLY appeared in the press of the state
an article from gentleman for whom I
have the greatest respect which reveals
q total misunderstanding of the spirit
and purpose Of this movement. In this
article Il is declared that the attempt TO
revise the system of taxation In Ken
fucky Is a part OF a general combination
q capital to secure exemption from tax
ak1cn. I state deliberately and with full
consideration, and having abundant on
portunity to know whereof | speak. that
no advocate OF the proposed revision of
M tax system of Kentucky has ever
suggested that any class of property
uhould be exempted from taxation
The purpose OF the movement for tax
any class Of property. On the contrary.
n fs for the purpose OF removing consti
eufional restrictions so that the legtsla-
ture may have power to vary the
method and the rate that millions OF dol
ears of property that now escape taxa
don may be made 10 yield a revenue and
thus relievr he burden on real estate.
Our presen system has utterly failed in
this respect. After nineteen years of
trial We find II has practically broken
down. so far as concerns the raising OF
revenue from stocks and bonds and other
property OF that intangible kind which
can easily be hidden.
Shall we merely keep on with the old
system that has failed. or shall We make
ourselves free To try methods that have
succeeded elsewhere I'm deriving large
revenue from this kind of property which
for the tax dodger. favor no exemption
Of any kind of property I advocate n
system that will make every kind of
property bear a fair share OF the burdens
rated according to its capacity and COL
iected by a method fitted to its character
Facts and Not Theories
Theoretically under our present law
no property Is exempt. Practically. un-
der our present law millions upon mil
lions escape Only about S. 10000 OF
bonds for instance. were taxed in Ken
tucky this year. That is manifest alb
surdity. Let us address ourselves 10 the
facts. Let us face the conditions as they
s-a-the laws Of economics and Of human
as they are-and not as We think
should be.
The system of taxation we have in
Kentucky is what is known as the Cen
erai Property Tax System. 1t is n sys-
-tem which came into existence many
years ago when property existed in sim
ple form. when most that n man had
would be in shape OF lands and houses
and live stock. or stock Of goods. or
other things visible 10 the eye and easily
asscs~~1 In that day II served Its pur-
poec .4irly well, but that day has been
long outgrown and the system which suf-
Seed then is now being generally aban-
sloned because II has been found impossi-
Die TO adapt II 10 the many new forms of
property which have come into existence
with the tremendous industrial and COM
mercial development OF recent years. We
have now manifold forms of property
mat were not even dreamed of at the
time the general property tax came int
favor. The development OF the corpora
following It, together with the wide dis
frfbution Of securities. has entirely
changed the complexion of Affairs.
"A system Of taxation which could de-
aflber kinds Of visible property. whioh
are fixed. nailed down. and unable 10
escape Is by no means fitted TO derive .
sevenue from bonds and stocks and
moneys ana other forms OF intangible
personal prsperty, like bonds and stocks
and money and notes. which can hide
and will hide whenever the tax rpts
becomes high enough to take what the
owner OF the properly regards as too
large a proportion OF the Income from
that property.
The Gap Wdens.
Even in the EARLIER days OF corporate
Aeyelopment the misft was not quite %
bad as II is to-day Year by year how
ever. bonds and stocks and notes and
ether froms of Intangible personal prop
.erty represent a larger and larger per-
eentage OF the total property Of the COM !
nnunity. Year by year. at the same time, |
the demands for revenue for public pur- |
poses. such as good roads, good schools. |
etc. become heavier and the tax rate |
goes higher and higher. At the same !
time the yield from bonds and stocks has 4
grown sm3ller and smaller. In earlier 1
days railroads thought nothing for i0-
stance, OF issuing per cent bonds. Te-
day any standard railroad would cosz-