River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1913-01-16

1 n
| first time in the History of the country, that
| state income tax can be made an effec-
| tive revenue producer. The report OF tht
| Tax Commission which IS ready Tor SUP
| mission to you, presents q summary OF the
| principal provisions of the law and the
! full results of its operation. The snow
/ ing there made completely vindicates the
| wisdom of the people in demanding an in
| come tax and the legislature in establish
/ ing it. Disregarding the personal prop
erfy offset during the first year of its
! administration it has yielded over $780,
600 in reyenue-more than was collected
throughout the entire United States under
the first Federal Income Tax of 1863, and
many times more than was ever before
collected from this source in q single year
in all the states of the Union put together
The success of the law as a revenue pro
Queer has been demonstrated therefore be-
yOnd dispute.
A second and more important result
shown by the report is the fact that this
revenue will largely come from sources
that failed heretofore to contribute their
full share. No poor person will contrib
ute a single dollar Of revenue under this
upon the well-tO-do or the wealthy. The
tax reaches less than 2 per cent of the
number win contribute over 10 per cent
Of the revenue to be raised for all pur-
poses. In the light of this experience and
the popular endorsement of the income
tax at the recent election In the face OF
the most determined opposition, it is plain
that the principle of income taxation has
come to stay. No question as to its wis
dom therefore now cOnfPontS you. That
question has been settled by the decision
Of our courts and the verdict of the people
Your only duty Is to simplify 1t and rem
der it more effective in administration.
The situation is by no means strange
There were no satisfactory presidents
among the income tax laws of other states,
and it is not surprising therefore that
minor defects developed in the practical
administration of our law These defects
can be readily cured by amendment. A
number Of such changes designed to rem
der the law palmer and more consistent
have been suggested by the Tax Com
mission, and will l trust receive your early
me that no radical change in the general
scope or character of the act should be
made at this time. Because national banks
are not subject to it, state banks should
be exempted also; but both should be
taxed upon their personal property as
heretofore.
AS originally introduced in the legis-
lature the present law exempted all per
sonal property from taXation; but mas
much as it was likely to be tested IN
court and up to that time no state had sue
ceeded in administering an income tax
law, this provision was defeated The act
as passed did exempt moneys and credits,
household furniture, farm machinery, i'm
plements and tools. and a few other ar
ticles. These classes of property had al
ways been poorly assessed and yielded very
little revenue in proportion to their actual
value At the same time a provision was
son paying a personal property tax to
offset it against his income tax. This in
effect exempted him from personal prop
erty taxation to the extent that he was
also subject to an income tax. This pro
vision was designed primarily to preserve
the existing status until the validity OF the
law should be passed upon by the courts
and its usefulness as revenue producer
had been practically tested.
Prior to the passage of the income tax
law the total tax yield of personal prop
erty was 5,108.550. During the first year
of its administration the income tax
amounted to over $3.500.000. The yield
alton is estimated at $3,752,25O. In view
Of these facts the Tax Commission sug-
gests in its report that all personal prop
erty may now be exempted except public
utilities. and tho stocks of banks and trust
companies. Enthusiastically this is the
final goal we all wish to reach and if
should cheerfully concur in the sugges-
ton; but it is not clear to me that the
time for doing this has yet arrived The
foregoing figures indicate that the income
tax falls S250.000 short of the amount
derived from the personal property still
| assessable, and nearly $2,000,000 short of
the amount derived from personal prop
erty taxation as it was prior to the re-
cent exemptions. 1t is true that 1911 was
not a prosperous year and that another
twelve months experience in the admin
| iStratiOn of the law may show larger re-
turns. But the gains in this direction may
be Offset in other ways Several import
ant questions affecting the yield of this
tax were reserved by the Supreme Court
in it's recent decision, and it seems to me
the law should be given a fuller test both
in the courts and in practice before max
ing any fundamental change or haZarding
the loss of this added revenue.
II the income tax should fail to yield as
much revenue as was previously derived
from personal property. the excess would
fall upon real estate, which is already bear
ing its full share of the public burden. 1t is
common observation that the trend of pop
ulation in recent years is strongly toward
the cities with consequent neglect of rura
development. The effect of this tendency
| is to increase the cost of living and lesser
| the economic independence of our people
| Nothing should be done further to load
| down the land owner, but on the contrary
| he should be given every economic advan.
| tage as Il check on the abnormal drift Of
population to Industrial centerS. In dis
| tinctively agricultural counties the income
/ tax this year will fall considerably Shor
| of the amount raised from personal prop
erty. Doing away with the personal prop
| erty tax would inevitably increase the bur
| den now laid on land in these districts un
| less the basis for the distribution of the
proceeds of income taxation should bC
| changed at the same time.
The income tax in It's present form may
| and probably will yield the full equivalent
next legislature convenes. Then also ad.
/ ministration of it will have settled to
| definite. fixed course and most if not al
of the legal questions now open will have
| been determined.
| l recommend that no radical change IL
| the general scope or character of the in
| come tax law be undertaken at this SEES
sion and that no further exemption O.
| personal property be made. But amend
ments necessary to make the law simpler
and more easily understood by the ia,
| payer and more effective from an admin
istrative standpoint should be adopted
| without delay.
HIGHWAYS.
( The last legislature created the Wiscon
scr1 TirrhNx 1Toic cin or
| $350,000 of state money to aid towns an(
| counties in the construction of roads ant
] bridges. The first work under this Law
was done in 1912. Despite the fact tina
the season was rainy and bad for roaC
| building and that almost all of the stat
| engineers and the county highway com
| miSsiOners were inexperienced in the work
over 500 miles of road in 65 counties anC
] 276 bridges in So counties were completed
/ in very satisfactory manner. at tota
| cost of about $960,000. OF this amour
| SS50.00O were paid out for road work ant
| $4,000 for bridge construction. The Statt
| contributed practically one-third of thu
| cost. In addition to this financial aid tn,
commission furnished plans for the con
| Struction of county bridges that cost $19S,
| 600 and made surveys and plans for man!
road improvements in counties villages anC
| towns.
The policy of state aid for the construc
| tion and maintenance of public highway:
| inaugurated two years ago has therefor
| proved a complete success. Indeed. 1T Il
| almost too successful. The petitions fo
state aid for 1913 call for an appropriation
of $S23,000 by the state This is almos
| three times as much as was spent in 1912
| 1t is a rapid increase; but if possible tn,
| legislature should not permit this work t.
| lag for want of necessary funds or the en-
| coIra cement cooperation by the state af
| fords 1t should be borne in mind alSt
| that in order to make such an additions
! appropriation available in time for worl
| during the present year it must be mad
very early in the session.
| Under the present law tae state high
! way fund is raised by property tax
! specially levied and collected each year
/ 4 better policy would be if possible tt