The Republican. [volume] (Oakland, Md.) 1877-current, 1933-03-02

The ability to pay is measured two
/ ways: Possession of wealth or Of
property, and the receipt of income
If the proportional method is applied
his tax will remain the same regard.
less of the size of his wealth or in.
come. Both methods are used extern
sively by all modern governments.
Taxes can be classed under direct
or indirect taxes, but the most general
way is by the different kinds. First,
the general property tax. This is the
best known tax in general, and it is
the oldest form of taxes, reaching
way back when wealth consisted
mostly of land and domestic animals.
This tax is tax on property rights
and wealth irrespective of their ma
ture. For general taxing purposes,
wealth and property rights are di-
vided into two general classes-real
estate and general property. Real
estate consists of land, buildings and
improvements on land; personal prop
erty is divided into tangible and in
tangible property. Tangible property
consists of movable wealth, such as
household furniture, farm machin-
cry, farm animals and jewelry. In
tangible property is property rights,
such as stocks, bonds, notes, mortga,
ges and contracts.
The general property tax is levied
by township, town, city and state au-
thorities. The general property tax
is the greatest source of revenue for
local and state purposes. Each year
all taxable wealth is assessed. The
wealth is then valued and the tax col.
lected soon after.
The assessing of this property is
very difficult job. First, there is an
inequality of assessment between real
estate and personal property. Real
estate is visible and immovable and
therefore cannot be hidden. Taxes on
such property must be paid. Per.
sonal property, like household goods,
watches, jewelry, stocks and bonds
escape taxation because the people do
not declare it and let the assessor find
it if he can.
Second, assessments are usually
made by men who are not qualified
and they very often value property
too highly or not high enough.
Third, legislators have wrong ideas
about wealth and property and this
results in double taxation.
Fourth, there is an unjust appor-
tionment of the tax. Since the COM
munity shares equal in the tax which
the state collects, there is a strong
temptation for the community to I'M
dervalue taxable property and thus
escape some taxation. Such people
are cheating their government as well
as themselves.
Some of the above difficulties can be
overcome by ~ select men who as
sess property who are trained and
educated; (2) double taxation Of prop
erty and wealth should be eliminated;
(3) certain forms of personal prop
erty, both tangible and intangible,
should be withdrawn, since they es-
cape taxation.
The second kind of tax is the in
come tax. This tax is the principal
tax used by Great Britain, Germany
and the United States. Some states,
such as New York and Massachu-
sets, levy an income tax. The Fed
eral income tax applies to all resi-
dents and non-residents who receive
incomes from within the United
States. Two sets of rates are ap-
piled, both of which are progressive.
One is normal tax" and the other
is "surtax." Rates for the normal
tax were as follows in 1881: IL per
cent on the first $4,000 of net income
above the exemption; per cent on
the next $4,000, and 5 per cent on all
incomes above that. The surtax pays
no attention to personal exemptions.
The first $4,000 of the net income
was free. Above that rates ran from
l per cent to 20 per cent. Corpora
lions pay IL per cent on their net in
come.
This tax has a number of great adj
vantages: (D an income is the best
measure of taxpaying ability-no in
come, no tax; ~ This tax is pro-
gressive and more easily applied than
any other tax system; (3) Each cit
izen is paying directly to the govern
ment; (4) the tax is elastic. Rates
can be raised or lowered to make the
tax yield fit the needs Of the gov
eminent.
The inheritance is the third kind of
tax. This is a tax collected on es-
tates as they pass into the possession
of those inheriting.
An income tax is paid from in
come, but an inheritance tax is paid
from capital. The inheritance tax
means the leveling down of enormous