Eagle River review. [volume] (Eagle River, Wis.) 1890-1927, 1913-01-17


of its advocates anG demonstrated for the
first time in the history of the country that
a state income tax can be made an eHec-
Tax Commission. which is ready for sub
mission to you, presents summary of the
principal provisions of the law and the
full results of its operation The snow
ing there made completely indicates the
wisdom OF the people in demanding an in
come tax and the legislature in establish
ing it. Disregarding the personal prop
administration it has yielded over $3,500.-
600 in revenue-more than was collected
throughout the entire United States under
the first Federal Income Tax of 1868, and
many times more than Us ever before
collected from this source In a single year
in all the states of the Union put to gether
The success of the law as a reven--e pro
Queer has been demonstrated there ore be-
yond dispute.
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
law, and no excessive burden is imposed
upon the we'll 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 pur-
poses In the light Of this experience and
tax at the recent election in the face of
the NEST determined opposition, it 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 1t 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
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 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
taxed upon their personal property as
heretofore.
AS originally introduced in the legis-
Iature 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 tue same time Il pEONlSIOu WIS
inserted in the act authorizing any per-
son paying 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
10 ftA Nfs1I SAlA ~ al
erty was $5,10S.550. During the first year
Of its administration the income tax
amounted to over $3,500000. The yield
from personal property still subject to tax
alton is estimated at $3,752,250. In view
Of these facts the Tax Commission sug-
gests in its report that all personal prop
utilities, and the stocks Of banks and trust
companies. PROFESSIONALLY this is the
final goal we all wish to reach and if
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
tax falls $25O,000 short of the amount
derived from the personal property still
asseSSable, and nearly $4,000, 600 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
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.
/ 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
and more, easily understood by the tax
payer and more effective from an admin
istrative standpoint should be adopted
without delay
HIGHWAYS.
Under the present law the state high
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 a def
mite sum annually to cover the cost of
supervising the construction of roads and
bridges. Since this item Of expense must
necessarily vary with the amount of work
to be supervised. 1t is desirable that a
more ELASTIC provision pc incorporated IN
work of this sort the expense of super
vision is customarily figured at a per-
centage of the total cost. In many states
this item runs as high as fifteen per
cent Of he entire amount. The High
way Co,omission has informed me now
ever that it will be able to carry on
the work for not to exceed five per cent
Of the cost of construction. Should this
percentage seem reasonable to the legis-
Iature the law should be amended accord
ingIy so as to obviate the necessity of
changing the amount to be allotted for
this purpose each session of the legis-
lature.
Some states are now employing their
prison convicts in building highways
Colorado has been especially successful in
the development of this idea II it be pos
sible to apply it advantageously in Wis
consin, it is highly desirable: but before
finally deciding the matter preliminary ex-
periments should be made. | respectfully
recommend therefore that the Board of
Control and the Highway Commission be
given authority and a limited appropria-
ton to carry on joint investigation OF
this subject by the use of limited NUM-
Der of convicts in road work in the north
ern part Of the state. preferably on lands
reserved for reforestation, and that they
be required to report to the next legisla-
ture the results of the experiment, togeth-
err with their recommendations.
There is some criticism Of the lack of
continuity in the stretches OF road now
being built by means of state aid and
many suggestions have been made for the
more rand comnlpti0u Of fhp main lines