The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-12-07
Trends
Politics, Economics
Involved in
Taxation.
= BY VINCENT S. LYONS
Times Financial Editor

pressed a LIU4SU tUdL IS Of
distinct interest to every taxpayer
in the country Monday night when.
in an address before the National
Association Of State FAX Admins
traitors. he declared that taxation.
the foremost Of the state problems
demanding revision, Is being made
q political issue when it is in fact
an economic problem.
With municipalities throughout
the Nation confronted with the
task Of shouldering an increasingly
large burden Of the relief for the
destitute and unemployed Gov.
McNutt's statement assumes a
significant timeliness. In the last
few years the bonded Indebtedness
of local governments has mounted
consistently and. in too many cases.
a condition Of bankruptcy devel-
oped
At present bonds outstanding Of
all municipalities amount to we'll
over the $4,000 100000 mark, less
than s10O00,OOO under the aggre-
gate public debt of the United
States Government. New York City
alone has a debt which is greater
than that Of the entire Dominion
of Canada.
TAXATION is the chief source
u of revenue for municipalities.
In view Of the huge load of debt
which must be amortized from time
to time, it is difficult to justify the
prevailing tendency of making Of
taxation a political function rather
than an economic necessity.
While it is true that IN recent
years corrupt politics was RESPONSE
bic for a considerable part of the
difficulties in which municipalities
found themselves, such as default
of bond interest, payleSs days and
so forth, the storm which followed
in the wake of the disclosure OF
unsound practices brought citizens
to their senses. Upheavals of poll
teal machines ensued and econo-
mics we're put into effect to bring
about a proper balance.
The wOrthiness of these econo-
mics was offset in part by the raw
ages of the general business depres-
sion. Fewer incorporation papers
for new business we're filed, customs
collections dipped and private citi-
zens. beset by troubles of their own,
were unable to meet their assess
ments
WlTHIN the last year or more
w we have witnessed the pas
sage of sales tax measures by quite
a few states. Only yesterday New
York City approved a measure
levying 2 per cent tax on all
sales, except articles of food. and a
3 per cent tax on public utility rev.
enues. It is quite possible that the
latter development may be the start
of a movement on the part Of cities
to expand their revenues.
In each instance where the levies
were voted they we're preceded by a
flood of protests from the sources
which were % be taxed. When New
York City proposed to put tax on
security trading the brokers bluffed
their way out of this predicament
by threatening to move the Stock
Exchange and the whole business Of
security trading across the river to
Newark. N. j.
Il is in these instances that the
political motives enter the situation.
Politicians arc prone to levy taxes
where it will do them the least
harm and the result is that little
new revenues are acquired. Expen-
ditures by governments have risen
sharply in the last few years and
new methods of taxation must be
discovered to take care of this adol-
tional outlay Subjugation of the
levying of taxes from a political
expediency TO an economic func-
ton. as Gov. McNutt suggests.
will help the entire municipal struc-
ture.