Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1935-03-28
SOLONS PREPARE FOR
/. BATTLE OVER TAXES
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small taxpayer. But an analysis of
the bill shows that larger proper
tionate benefits from the measure
would accrue to the absentee land
lord class-the owners of large prop
critics who live, perhaps in New York
or Chicago or elsewhere outside the
state.
Also standing to gain largely by the
plan are the absentee Landlords"
who. while living in Minnesota, de-
rive their income from business or
industrial properties which they do
not occupy or use themselves. In the
absentee landlord" category fall the
large holders of city and farm real
estate, the big mining companies, and
other promoters.
How Plan Would Work.
To determine how the proposed linn
itation would work out, let us make
some comparisons.
First, take the case of the owner
of $4,000 homestead in village or
city where the tax rate is 100 mills.
Under the present law he pays ON a
valuation of 25 per cent. Thus he
pays $1O0 on an assessed valuation
of $1,000 or full and true value of
$4,000.
Under the Limitation he would pay
base tax of $50 on his full valua-
tion of $4,000.
But it must be noted that the pro-
posed amendment does not apply to
taxes necessary for bond retirement,
etc. It is now assumed that the limi-
tation would wipe out the classified
assessment law, so that taxes which
would be levied for debt retirement
in addition to the taxes allowed under
the one and one half per cent limi-
tation would be levied on the basis of
the full and true valueI
Would Pay Same Bill.
Therefore assuming that there
would be a 10 mill levy for debt re-
tirement purposes this is fair
average estimate-Such a property
owner would find another $40 added
to his tax bill. In other words, his
property tax bin would be the same
as under the present system.
Furthermore, if a sales tax such as
| is advocated by proponents of the tax
limitation plan were imposed it would
mean that the total tax bill of this
typical small property owner under
hn ;fo< no irh ho,
at present.
When we skip from the homestead
owner to the owner of real estate
worth 100000, we find that the latter
at present pays taxes on a valuation
of 40 per cent, so that his tax now,
under the 100 mill rate, is $4,000.
However, under the limitation his
base tax would be $1,000 and his tax
for debt retirement $1,000, making a
total of $4,000. His tax cut would be
371a per cent.
Benefit to Mines.
Now to go on to the iron mining
properties. With a total ad valorem
or real estate levy on iron ore for
| local and state purposes of 215 per
cent, plus a 10 mill levy for bond
property would pay total of $32,50O
under the tax limitation plan. At
present the mines pay on a SO per
cent valuation. so that a million dol
lar property now pays $4,000 where
it is taxed at the rate of 100 mills.
Many Of the pending tax bills, how
ever, including major measures, are
due to go into the discard, apparently,
as the result of action by the tax
committees of both houses. These
committees have approved sub-com-
mittee reports favoring an omnibus
bill to take care of the whole tax
situation.
Sales Tax Asked.
The omnibus bill would substitute
a straight retail sales tax of 2 or
perhaps per cent for the gross re-
ceipts or gross income tax, according
to the present plans. The committees
may exempt food from the sales tax
plan. If all retail sales we're sub
jected to a per cent tax it is esti-
mated the added revenue from this
source would be S12,000.0O0.
The net income tax provisions set
forth under this program represent
a compromise between the net income
tax bill now before the Legislature
and the present law. The maximum
rate would be increased from the
present per cent to per cent, and
the exemptions would be lowered to
$500 in the case of single persons,
and S1,50O in the case Of married
persons. 1t is estimated that by rails
ing the maximum from to per cent
additional revenue of S1,387 900 would
be raised
| The taxes on telephone comp anies
under the omnibus plan will be raised
from to per cent. Inheritance
and gift taxes would be increased
to provide an estimated additional
revenue of 100000. Three million
dollars additional is estimated as the