The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1912-04-12
he ak Question
Henry Wallace Writes Of Changes in Tax Legislation
as Conditions Change in the State.

Il as Conditions Oh
AS leading editorial in Wallace's
Farmer the tax question as it is
known in Iowa is discussed, tax his
tory being gone into by the writer. A
different system OF taxation Is adyo-
Gated, but the view is taken that the
new money and credit law is equitable
as compared with farm assessments.
The editorial follows:
Taxation in Iowa.
Our readers in the adjoining states
OF the Mississippi valley may perhaps
be interested in a brief review of the
discussions that have been going on
for good many years in the state Of
Iowa and on the subject OF taxation.
When these western. states were
first settled, the problem of equitable
taxation was comparatively simple.
The wealth of the state was mostly In
land and live stock. The quality of the
land was fairly uniform; there was lit
tie personal property except in live
stock and farm machinery; and there
were no great cities with large
amounts of personal property. Proper
ty both in the country and in the
smaller towns was low in price.
There were no railroads to speak of
and those that were already coming in
were regarded with such favor by the
people, whether on the farm or in
town, that they were glad of the gifts of
state and government land for railroad
purposes, and willingly contributed
from two and one-half to five per cent
of the taxable value Of the land and
other property to aid and encourage
them. AS railroads increased in num-
Der and in value, the problem of the
best method of taxing them became a
rather serious one. All classes of peo-
pie seem to regard taxes about as
they regard death, and escape from
both as long as possible. Hence there
was constant complaint that the rail.
roads escaped taxation. Not infre-
quently this problem entered into
the politics of the state, and of other
states as we'll
Then the cities began to grow,
banks were established. Wealth &C.
cumulated. and a large amount of
that wealth was In the shape of what
is known as intangible property,
notes, deposits in banks, and other
forms of credit This again compli-
Gated the problem of equitable taxa
ton. After trying various methods
the problem of railroad taxation
was temporarily shelved by giving
the power to levy taxes to an execu-
tive council The railroads were
then taxed as whole, and the taxes
other than the state tax were col
lected by the counties, townships and
school districts through which they
passed. in proportion to the mileage
of each taxing district.
Naturally, in order to escape this
state tax, which is very Might've to
three and half mills on the dollar
the counties began to lower their as.
sessments About ten years ago an
effort was made to correct this abuse
by law requiring all farms and
I other real estate to be assessed at
full value. Then, to prevent extra
vagance in the administration of cities
and towns, and counties as well, the
maximum rate of levy in each case
having been fixed by law, the full val,
ue was divided by four, in order to
| get the taxable value. Cor example.
1 If the county, township or city was
limited by law to definite assess.
ment, to have levied this on the full
value would tend to promote extrava.
gance in administration, the officials
in any corporation being disposed to
spend all the money available)
Then began the remarkable ad-
yancement in the value of farms and
of business property in the cities,
amounting in the last ten or twelve
years to about eight per cent per an
mum, while property in the country
towns and in many OF the residence
districts in the city made but little
advance. While the valuation was
raised to some extent, it did not in
| crease nearly as rapidly as the ad-
vance in real estate and business
property. The result was that farms
were assessed at from forty to sixty
per cent of their actual selling value;
and when this was divided by four,
the amount on which taxes was paid
was really very small
Meanwhile assessors were at
tempting to tax moneys and credits
at their face value; and inasmuch
as money and credits are mostly
owned in the towns and cities, where
there is a large additional city and
school tax the rate of taxation on
moneys and credits amounted to
about fifty per cent of their net re.
turn. For example, deposits in saw.
ings banks were taxable under the
law. The income from them was
four per cent; the taxes in the cities
and towns from two to two and one
half per cent. To compel the own