The broad ax., 1916-10-07
ILLINOIS BEHIND
OTHER STATES
Just Systems for Taxation Of
lntangibles Elsewhere Relieve
much Of the Tax Burdens
Now Borne in Illinois.
OUR CONSTITUTION DISTRICTS

Pending Tax Amendment When
Adopted Will Make 1t Possible to
Put Illinois Abreast of Other States
In Modern Tax Methods-Must Have
Majority Vote.
While Illinois has remained tied
to an impossible system of taxation.
other states have devised new sys-
tens especially for deriving revenues
from accumulated wealth, and not
only have other states outstripped
illinois in improved taxation meth
DDS, but it is also fact that nowhere
IN Europe is the old-time uniform tax
system attempted to be applied to
taxation of intangible values.
In New York state the closest at
tention has been given to the revenue
producing and equitable phases of
taxation:
Since 1880 the policy towards the
taxation of personal property has
been to classify such property and
to impose special tax upon each
separate class. In 1913, as a result
of the classified system, the propor-
ton of tax burden paid by real estate
showed a reduction from 81 per cent
TO % per cent. In Illinois the tax
proportion of real estate is slowly but
surely increasing. In New York in
the last year-190S-when effort was
made to assess mortgages on the
same basis as real estate-the pres
ent Illinois system-less than a mill
lion dollars of revenue was derived
from the tax. At the present time,
under the new system, about four
million dollars are collected.
Classification in Pennsylvania.
The Constitution of Pennsylvania
provides that "All taxes shall be uni
form, upon the same class of subjects,
within the territorial limits of the
authority levying the tax" This
provision has been in the Pennsyl-
vania constitution since 1874. 1t is
much more comprehensive than the
amendment to be voted on in Illinois,
which permits classification only of
personal property. For more than 80
years Pennsylvania has taxed intan-
gible values at the rate of 40 cents
on each 500 Of full value, and about
half of the tax collected is derived
from mortgages. The amount of in
tangible values now assessed in Penn
sylvania is somewhat over a billion
dollars and invariably each year
shows an increase.
Massachusetts for Modern System.
The state of Massachusetts, is now
bringing about more modern taxa
ton system. Minnesota has amended
the state constitution so as to give
the legislature full power over CLASH
fication and taxation of all kinds of
property. In the year 1911 the legis-
dunn to the people. In 1911 the legis-
lature prescribed a 30-cent tax on
each 500 of intangibles. At that
time the total intangible property
assessment in the state was less than
$14,000,000. In 1914 the assess
ment had increased to nearly $780,
900 900, and the number of persons
assessed was 1000 per cent greater
than under the old system-showing
that the tax is now much more evenly
borne. The total tax now collected
from intangibles in Minnesota is
about twice as much as under the old.
Michigan and Rhode Island.
In Michigan, where Governor Pin
or tho 70 rnfnrnn aUifofinn
about 20 years ago, the Constitution
was amended in 1906 so as to per-
nit the classification of all kinds of
property for taxation. Rhode Island
formerly had the Illinois system, but
abandoned it as impractiCable and
a system like that Of other
advanced states. The Wisconsin Con-
stitution gives the legislature broad
powers.
MARYLAND and Other States.
Maryland began a classification OF
personal property in 1896. At that
time interest-paying bonds. etc. in
the city of Baltimore, at $2.17 rate,
yielded only $4,000 in revenue. In
1897, with a 47-cent rate. the reve-
nues more than doubled, and in 1915
\ Ascent rate produced nearly mill
lion dollars. November 2. 1915.
Maryland voters adopted an amend
nent giving the legislature still fur
her powers of classification.
Other states have classification sys-
ems with low rates for intangible
Talues. At the same time. in almost
,very state in the Union the move
nent is for similar reduction OF the
AZ on intangibles.
The pending tax amendment will
make Il possible for the legislatures
II Illinois to provide q modern sys-
en-. This will prevent Illinois from
,eing outdistanced by other states In
,roper methods for dealing with in
angibles. But, II must not be lost