Evening star., 1932-04-06
How Shall We Balance Budget!
Cry Raised against Property Tax, but States Have
Hard Time Finding Another Source OF
Revenue-C0-ordinafion Needed.

nearly $500, 900 year. These taxes
have held up fairly well during the
depression.
Thirteen States now have tobacco
taxes. While the revenue is not very
large and it is form of competition
with the Federal Government, never
thelesS the States have been reluctant
to give up this source Of taxation.
Georgia had a sales tax, but aban-
doned it and now there are only four
States with sales taxes. Other States
have been hesitant to adopt sales
tax because of a fear of interfering
with their own merchants business.
There are difficulties in interstate sales
because they cannot be taxed by the
States.
Some of the States have special license
taxes on chain stores, but in none of
them are the rates high, because of a
fear that they might be declared in
valid if made almost conflScatory. Spe-
cial taxes on motor carriers have been
adopted by some of the States, but
these have resulted in much litigation
due to the interstate character of the
bus lines. In a number of instances
the States have adopted selective sales
taxes or luxury taxes, somewhat the
same as those proposed by the Treasury
Department in its recommendation last
December for the Federal budget.
License taxes have been increaseds so
as to cover almost everything.
Coordination Lacking.
In very few of the States has there
been any attempt made to work out a
well co-ordinated system of taxation
States, counties, towns, villages, school
districts, water districts. lighting dis
tricts, sewer districts, bridge districts
are all part. of the $50, 900 taxing units
which take their toll from the American
taxpayer. Administrative difficulties are
numerous because many corporations do
business in various States at the same
time. State income taxes can be i'm
posed only on the proportion Of the in
come such companies derive from their
operations in particular State Capt.
tai stock taxes present the same diff
Guilty.
What will the cities do? Many of
them already are finding it difficult to
collect the general property tax. The
list of defaults and property sales is
every day becoming more of threat to
the stability of the property tax.
Hitherto it has been regarded as the
most productive of all. If, of course,
the business depression is short-lived
the property tax will recover. but it is
doubtful whether it will ever be relied
upon again almost exclusively for city
revenues, though it is difficult to say
what new forms of taxation can be de-
yised or what old sources can be tapped.
Coordination Paramount Need.
Reduction of city expenditures is the
real problem in America, because the
borrowing power of many cities has been
limited or else exhausted The burden
OF unemployment relief has fallen on
municipalities. No real progress can be
made on this problem until there is CO.
ordination between Federal, State and
local revenue systems. The cities with
| the bulk Of the job to do have refrained
| from invading other tax fields.
Overlapping between the State and
Federal Government has begun. If the
| cities are forced to enter into competi-
tlon with other governmental units the
general spread of nuisance taxes is in
eVltable, particularly on admissions and
on luxur1eS. Already there are some
connlctS between the many taxing units,
Ihis IN itself is costly. Coordination
OF the tax systems in America is the
paramount need developed by the de-
preston.
(Copyright 1922
CTomorrow's article will deal with
overlapping tax systems.)