The Watertown weekly leader. [volume] (Watertown, Jefferson County, Wis.) 1912-1917, 1913-01-17


| first time in the history Of the country that
Il state income tax be made an efec
tive revenue producer. The report of the
| 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 Sow
ing there made completely vindlcates the
| wisdom Of the people in demanding an in
| come tax and the legislature III establish
erty offset. during the first year of its
| administration it has yielded over $500
900 in revenue-more than was collected
/ throughout the entire United States under
| the first Federal income Tax of 1853 and
| many times more than was ever before
| collected from this source in single wear
in all the states of the Union put together
| The success Of the law as d 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
| ute u single dollar of revenue under this
law. and no excessive burden 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 viii 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
dom therefore now confronts you. That
question has been settled by the decision
or 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 satisfactory precedentS
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.
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
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
/ De 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 state had sue
ceeded in administering income tax
law, this provision defeated. The act
as passed did exempt moneys and credits,
household furniture, farm machinery, i'm
plements 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 81 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 Il 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
aTY1nIl tod tn g Thn old
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. Unquestionably this is the
final goal we all wish to reach and if
conditions were ripe for the change L
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 100000 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 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
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.
l recommend that radical change In
the general scope or character of the in
come tax law be undertaken at this SEES
sion and that no further exemption of
personal property be made. But amend
ments necessary to make the law simpler
payer and more effective from an admin
iStrative standpoint should be adopted
without delay.
HIGHWAYS.
Under the present law the state high
way fund is raised by 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 a state tax
The last legislature appropriated a def
supervising the construction of roads and
bridges. Since this item of expense must
necessarily vary with the amount of work
to be supervised. it is desirable that a
more elastic provision be Incorporated in
the law L told that in engineering
work of this sort the expense of super
centage of the total cost. In many states
this item runs nigh fifteen per
cent of ihe entire amount. The High
way Commission has informed me how
ever that il will be able to carry on
the work for not to exceed five per cent
of the cost OF construction. Should this
lature the law Should be amended accord
ingly 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. If it be pos
Sible to apply it advanta geOuSly in Wis
conSin. it is highly desirable: but before
| finally deciding the matter preliminary ex
periments should be made. l respectfully
recommend therefore that the Board of
Control and the Highway Commission be
given authority and a limited appropria-
this subject by the use of Il 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-
er 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 rapid completion of the main lines
of traffic One way in which this object
may be promoted is to change the auto
mobile license tax from u uniform sum
per car as at present to Il reasonable mini
mum charge for the lighter cars. with a
proportionate increase for the larger auto
mobiles depending on horse power or
weight. The proceeds of this tax instead
of going as ut present in large part to
the counties where it is frequently fritz
tered away without any permanent inn
provement to show for it. should be used
under the direction of the Highway Com
mission in the maintenance and construc-
ton of the lines of traffic which connect
the principal cities and villages of the
state.
CONSERVATION OF NATURAL. RE-