Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1913-01-21

4 optrvs-...cn q years administration OF The
| new law has fully Justified all the claims
OF its advocates and demonstrated for thf
nrst time in the history of the country that
| state income tax can be made effec-
| tive revenue producer. The report of the
| Tax Commission, which is ready for sub
| mission to you, presents a summary OF the
principal provisions of the law and the
fuH results of its operation The Snow
| ing there made completely yindicates the
come tax and the Legislature in establish
ing It. D1sregarding the personal prop
erty Offset during the first year of its
administration 1t has yielded over s3.500..
| VoV IN reVenue-more than was collected
| throughout the entire United States under
| the first Federal Income Tax OF 1868, and
| many times more than was ever before
/ collected from this source in a single yea
| IN all the states OF the Union put together
| TIE success of the law as a revenue pro
| Queer mas 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
| full share. No poor person will contrib
/ ute a single dollar of revenue under this
| law. and no excessive burden is imposed
| upon the weil-to-do or the wealthy The
| tax reaches less than 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
/ the popular endorsement of the income
| tax at the recent election in the face of
tne most determined opposition. it is plain
| that the principle of Income taxation has
! come 10 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 il ard rem
DER II more effective in administration.
The situation is by no means strange
There were no satisfactory pracedents
among the income tax laws of other states
and 1t 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
pc eXVempted 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
PIGMENTS and tools. and 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
inserted in the act authorizing any per-
son paying a personal property tax to
offset 1t against his income tax This in
erect 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
nad 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 $3500000. 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
! erty may now be exempted except public
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
| foregoing figures indicate that the income
| tax falls $250.000 short of the amount
| derived from the personal property Still
| assessable, and nearly s2,000,000 short of
| the amount derived from personal prop
| erty taxation as it was prior to the re-
lcent 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 its 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.
If 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
uiation in recent years is strongly toward
the cities with consequent neglect of rural
development. The effect of this tendency
is to increase the cost of living and lessen
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 a check on the abnormal drift of
population to industrial centers. In dis
tinctively agricultural counties the income
tax this year will fall considerably short
of the amount raised from personal prop
erty. Doing away with the personal prop
erty tax would Inevitably increase the bur
less the basis for the distribution of the
| proceeds of income taxation should be
| changed at the same time.
The income tax in its present form may
| and probably will yield the full equivalent
| of the personal property tax before the
| next legislature convenes. Then also adj
| definite, fixed course and most if not all
| of the legal questions now open will have
| been determined.
l recommend that no radical change in
the general scope or character of the in
come tax law be undertaken at this ses-
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.
The last legislature created the Wiscon
sin Highway Commission and appropriated
$500 of state money to aid towns and
counties in the construction of roads and
bridges. The first work under this law
was done in 1912. Despite the fact that
the season was rainy and bad for road
building and that almost all of the state
engineers and the county highway COM
missiOners were Inexperienced in the work,
over 500 miles of road in SIS counties and
276 bridges in 50 counties were completed
in a very satisfactory manner. at a total
cost of about 100000 of this amount
$4,000 for bridge construction. The state
contributed practically opethird of the
cost. In addition 10 this financial aid the
commission furnished plans for the con
struction of county bridges that cost $685.
600 and made surveys and plans for many
/ road improvements in counties, villages and
towns.
The policy of state aid for the eonstruc-
inaugurated two years ago has therefore
| proved n complete success Indeed. il is
| almost too successful The petitions for
/ state aid for 1913 call for an appropriation
/ of SS23,00 by the state This is almost
! three times as much as was spent in 1912
/ IL is a rapid increase; but Ii possible the
| legislature should not permit this work TO
/ lag for want of necessary funds or the en-
/ coura cement cooperation by the state af-
i fordS. IL should be borne in mind also
\ that in order to make such an additional
! appropriation available in time for work
/ during the present year il must be made
very early In the session.
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 il up from the general revenues OF
\ the state aud 10 raise only the amount
( not thus available by a state tax
The last legislature appropriated a def
mite sam annually to cover the cost of
sunerviSing the construction of roads and
bridges Since this item of expense must
necessarily vary with the amount of WORT,
: to be supervised. il is desirable that a
more elastic provision be Incorporated in
I ell sFRas -,