Wauwatosa news. [volume] (Wauwatosa, Wis.) 1900-1948, 1913-01-17

( opposition, a years administration If TIA
new law has fully justified all the claims
of its advocates and demonstrated for fhe
| first time in the history of the country tbaf
| state income tax can be made an eifee
| tive revenue producer. The report of the
Tax Commission. which is ready for sIin
mission to you, presents a summary of fire
| principal provisions OF the law and fha
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 1t. Disappointing the personal prop
erty Offset, during the first year Of its
administration IL has yielded over SO 500 {
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 a single year
in all the states of the Union put together
The success of the law as a revenue pro
yond dispute.
A second and more important resnlt
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 single dollar of revenue under this
law, and no excessive buroen is imposed
upon the well-to do or the wealthy. The
tax reaches less than 2 per cent of the
entire population of the state, and this
number will contribute over 10 per cent
of the revenue to be raised for all our
poses. In the light of this experience and
the popular endorsement OF the income
tax at the recent election in the face Of
the NEST determined opposition ii is plain
that the principle of income taxation has
come to stay. No question as to its wis
dom therefore now confronts you That
question has been settled by the decision
of our courts and the verdict of the people
Your only duty is to simplify it and rem
der it more effective in administration.
The situation is by no means strange
There were no satisfactory precedents
among the income tax laws of other states
and it is not surprising therefore that
minor defects developed in the practical
can be readily cured by amendment.
number of such changes designed to rem
der the law palmer and more consistent
have. been suggested by the Tax Com
mission, and will trust receive your early
and favorable consideration. 1t seems to
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 Iegis-
lature the present law exempted ali per
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, inn
PIGMENTS and tools, and few other ar
tleles. 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
inserted in the act authorizing any per
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 a revenue producer
had been practically tested.
Prior to the passage Of the income tax
law the total tax Yield OF personal prop
erty was $5.10S,550, During the first year
of its administration the income tax
amounted to over S3,500,000. The yield
from personal property still subject to tax
alton is estimated at $3,752250. 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 the stocks Of banks and trust
companies. Unqaestionably this is the
final goal we all wish to reach and IL
conditions were ripe for the change |
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 $250.000 short of the amount
derived from the personal property still
aSsessable, and nearly $2,000,0O0 short of
the amount derived from personal prop
erty taxation as it was prior to the re-
cent exemptions. 1t is frye that 1911 was
not a prosperous year and that another
| 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 its recent decision, and it seems to me
the law should be given fuller test both
| In the courts and in practice before max
| ing any fundamental change or haZarding
| the loss of this added revenue.
! l recommend that no radical change in
the general scope or character OF , the in
! sion and that no further exemption of
personal property be made, But amend
! ments necessary to make the law simpler
hand more easily understood by the tax
/ payer and more effective from an admin
istratiye standpoint should be adopted
without delay.
| HIGHWAYS.
Under the present law the state high
| way fund is raised by a property tax
| specially levied and collected each year
| A better policy would be If possible to
| make it up from the general revenues OF
the state and to raise only the amount
not thus available by state tax.
The last legislature appropriated def.
mite sum annually to cover the cost OF
supervising the construction of roads and
bridges. Since this item of expense mus
necessarily vary with the amount of work
! to be supervised, it is desirable that
more elastic provision be incorporated il
the law / am told that in engineering
vision is customarily figured at a per
centage of the total cost In many state:
this item runs as high as fifteen pei
cent o. ne entire ha amoqnr me me- h ho
ever that it viii be able to carry OF
the work for not to exceed five per cen
of the cost of construction. Should this
percentage seem reasonable TO the legis
iature the law should be amended accord
ingly so as to obviate the necessity o.
changing the amount to be allotted fOl
this purpose each session of the legis
lature.
Some states are now employing thei
prison convicts in building highways
Colorado has been especially successful il
the development of this idea. If it be pos
sible to apply it advantageously in Wis
consin, it is highly desirable; but befer
finally deciding the matter preliminary ex
. periments should be made. / respectful.
recommend therefore that the Board o
Control and the Highway Commission b
ton to carry on a joint investigation o
this subject by the use of limited mum
Der of convicts in road work in the north