The Leon reporter. (Leon, Iowa) 1887-1930, 1912-04-11
THE TAX QUESTION.
Henry Wallace Writes of Changes in
Tax Legislation as Conditions
Change in the State.


tory being gone into by the writer.
vocated, but the view is taken that
the new money and credit law is
equitable as compared with farm as
sessments. The editorial follows:
Taxation in Iowa.
Our readers in the adjoining states
of the Mississippi valley may per-
haps be interested in a brief review
of the discussions that have been 60
ing on for a good many years in the
state of Iowa on the subject of taxa
ton.
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 little personal property except
in live stock and farm machinery;
large amounts of personal property.
Property 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 COM
ing in were regarded with such ia
vor by the people, whether on the
farm or in town, that they were glad
of the gifts Of state and government
of land far railroad purposes, and
willingly contributed from two and
one-half to five per cent of the taxa
BILE value of the land and other prop
erty to aid and encourage them. AS
railroads increased in number and in
value, the problem of the best meth
cd Of taxing them became rather
serious one. All classes of people
they regard death, and escape from
both as long as possible. Hence there
was constant complaint that the rail-
both as long as possible. 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 ac-
and 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 a 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
About ten years ago an
effort was made to correct this abuse
by law requiring all farms and
other real estate to be assessed at
full value. Then, to prevent ex-
travagance in the administration of
cities and towns, and counties as
we'll, the maximum rate of levy in
each case having been fixed by law,
the full value was divided by four,
in order to get the taxable value.
(For example, if the county, town.
ship or city was limited by law to
definite assessment, to have levied
this on the full value would tend to
promote extravaganza in administra-
ton, the officials in any corporation
being disposed to spend all the
money available.)
Then began the remarkable adj
vancement in the value of farms and
of business property in the cities,
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
disticts 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
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
and credits amounted to
about fifty per cent of their net re-
turn. For example, deposits in saw
ngs banks were taxable under the
law The income from them was
four per cent; the taxes in the cities
md towns from two to two and one
half per cent. To compel the own
ers of moneys and credits to disclose
hem, tax ferret law was passed.
The result of this was to drive money
put of the state, and at the same time
% take half and over Of the income
rom the small savings of people who
could not go out of the state.
Plenty of instances can be furnish
ed of men who, rather than pay this
ak on their moneys and credits,
vent to California, where mortgages
are not taxed. Nearly every one Of
our readers knows plenty of in
stances where men have invested in
Canada lands, or in lands in the
;emi-arid section, or in the irriga-
ion districts, for the same reason.
Attorneys have told us of clients who