Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1921-03-22

State finances. The items which make
up that report are the foundation
and plans upon and by which we shall
erect our completed financial struc.
ture. II It were not for this report
we should be without the plans o'
the architect, and II as the building
progresses It becomes necessary tc
alter certain details Of these plans
our doing 30 does not detract from
their value.
The States income for the calen-
dar year 1920 was $s.045,S70.6o; the
estimated income to be received FOL
the Is months period from January
1921 to June 1922, according to the
schedule submitted herewith is, $11,-
06,s32.84. The first item shows the
income for period Of II months
while the second Is for 1S months
The proposed change In the fiscal pc
Rod and In the due date Of certain
| corporate taxes, produces a situa-
ton that makes comparisons di6hcult
OF necessity II Is difficult to esti-
mate in advance the States income
The Budget Committee has expressed
the opinion that the taxes OF rail-
roads, express, parlor car, telegraph
and telephone companies will be
$778.245.s4 greater for the II months
period from June 30, 1921n to June
80, 1922 than it was for the calendar
year 1920. II temporary business
depression causes decrease in rail
road earnings, the taxes accruing to
the State from these earnings may
not equal the Budget estimates, and
it viii not be prudent to base expeudi-
lures ON this somewhat fiuctuatine
source of revenue. The increase In
the States income comes from two
sources: FIRST, from an increase In
the valuation of the real and personal
property, Of the State; second, from
| an increase in the excise Of franchise
taxes. The first is usually referred
to as direct taxation. and the second
| indirect. The State tax Of 6 mills
produced a revenue Of $3.50, 86.07
| in 1917, while in 1920 the 7k mills
| produced a revenue Of $4,188,344.76
| These figures show an increase from
direct taxation in that period OF ST.
| O57, $3.50. The increase Of the cash
expenditures of the State from 1917
| to 1920 was out Of all proportion b
the increased income received by the
state from direct taxation during the
| same period, as the cash expendi'
lures in 1917 were $7,7s6,254.N whil<
In 1920 they were s13,Sf4 ,s36.25. 1r
other words the States income from
direct taxation In 1920 was 80 7/1(
per cent more than in 1917, while the
cash expenditures Of the State in 1921
were II per cent more than those o.
| 1917. Had it not been for the marked
increase in the States revenue o
| $4,4sS, ,Sa349 from indirect taxation
| during this period, the $5,548.6S2.1'
| increased expenditure could not have
| been met by the State.
It is Of practical importance to dis
tinguish between direct and indirec
| taxation, although the division lint
| Cannot always. be drawn between
them. In general it can be said that
taxation levied upon persons or prop
erty Ia direct taxation, while that
levied upon industrial processes or
| franchises or duties levied upon cer-
tain classes of property with the ex-
pectation that the burden Of this tax
| alton will be distributed IN such q
manner that those who actually pay
the tax will not feel Its burden, Is
| indirect taxation. TAe practical ad-
vantages of indirect taxation are the
ease with which 1t is collected, and
| the fact that it's collection creates q
minimum Of opposition on the part oi
| the taxpayer, who often does moi
realize that he pays the tax In the
price Of the articles purchased. Indi'
rect taxes are likely to encourage
wasteful administration, since the
governing authorities who levy them
| do not come In direct contact with
the people who pay them, and as
| consequence are not held to sucf
| strict account for their expenditure.
Bonded Indebtedness
In the past few years there has
been q marked increase in the bonded
indebtedness of the State. On De-
ember 81, 1917, the State bonded In
debtedness was $2,629, 10000; In 1920
this was $S,9o2, 10000, an increase OF
| $6,273, 100000 or 1855. Highway bonds
issued since 1913 amount to $5,21S,-
10000 Of which s5s5,c00 have been
paid. The total amount Of interest
which the State must pay on these
bonds between the dates Of issue and
maturity is $4,162, ,46O. I'M other words
the State will pay $1.7s, principal and
interest, for every dollar it received
from the sale Of Highway bonds. a
similar situation exists with the 81
600 900 issue of War Loan Bonds, or
.:ich the State must pay $1.61 fo'
every dollar received, while on tht
Soldiers Bonus bonds the State mus
pay $1.30 for every dollar received.
From these figures you will realizs
that the State should proceed slowl!
In the issuing Of bonds, for which fu
ture Legislatures must provide In
terest and principal payments. Some
times when a large expenditure o
money is under discussion In thes'
legislative halls It Is suggested, as al
easy way out OF the problem, tina
bonds be issued. The state could b'
as careful about issuing bonds a
about levying taxes. Bonds place tn
burden upon the shoulders Of thos
who succeed US, and we should b'
careful about increasing their bur
dens for they viii face problems N
less acute than ours.
Legislatures Of the past often hav
assumed that q small annual fncreas
In the state tax rate would be unnoticea
by the Taxpayer, who has been le'
along by easy stages not realizing
that his load gradually was becomin
more than he should be caRed upol
to bear. This constant Increase Il
taxes has produced an ever increas