Evening star., 1936-10-31
PROPERTY TAXES
TOPIC AT SESSION
Strategy for Obtaining Wider
Base for Levies Is Dis
CuSSed.

Base Tor leVleS IS us.
cussed.
Addressing the Conference of Gov
ernmental Research Association at its
recent meeting in Ann Arbor. Mich,
one full day Of which was given to
discussion Of the general property tax,
Herbert D. Simpson, director Of the
Institute Of Public Finance, North
western University, called the atten-
tion Of academic groups and tax
reform groups to the fact that if we
are to get away from the present ex-
treme dependence on the general prop
erty tax, the character of the leader
ship and the tax strategy employed
are Of critical importance.
He pointed out that "our tax sys-
TENS in this country, under various
NEUTRALITY-SUSPICIOUS. accidental and
sometimes ulterior-have evolved into
and principles of constitutional law
may both have to be subordinated to
the realities of the situation" and gave
1t as his conclusion that an ironclad
overall limitation on the general prop
erty tax, established by constitutional
provision and accompanied by an
equally effective debt limitation to pre-
vent evasion, is the most effective
strategy for obtaining a wider tax
base.
lone of the realities" (affecting the
possibility of substantial change in the
property taxi, he said, "is the fact
that in many States powerful groups
who are so situated that they are able
to escape any heavy share of the
general property tax, but who would
be subject to substantial income, in
heritance and other types of taxation,
are sufficiently influential-financially
and politically-to make any change
from the present tax system practically
impossible. They are sufficiently
powerful to block every proposal for
genuine reform of the property tax and
for the development of alternative
forms of revenue. AS result OF con-
siderable contact with efforts in this
field I have come-somewhat reluct-
antly-to feel that rigid property tax
Limitation will prove to be the most
effective dynamite for cracking these
strata of vested interests and OF OPP
position to reform that have accumu-
lated about our present tax system"
Fundamental Elements Cited.
Simpsons address continued:
Discussing the future of the prop
erty tax is something like discussing
the future of the Bunker Hill Monu-
ment. And I say this not merely be-
cause we have had the property tax
for $50 years-that would not neces-
sarily prove anything-but because OF
two fundamental elements in our eco
nomic and political structure.
THE first is the unique position
that property occupies in our eco
nomic system. In the enormous ag-
gregate Of property values that have
accumulated in this country. the ra-
pidity with which this property has
been accumulated, the freedom OF
transfer and tenure. and the wide dis
tribution of property ownership, prop
erty occupies in this country a posi-
ton which it probably occupies in no
other country in the world-certainly
In no Old World country.
I'm this dominant position in our
economic system property represents
definite financial capacity, notwith-
standing a popular tendency in recent
years to argue that property is not a
measure of taxpaying ability. 1t rep
resents financial capacity, If not for
direct income, nevertheless for pur-
poses OF sale or lease, for purposes of
borrowing, for commercial rating and
financial status. For all business and
financial purposes property represents
financial capacity-and that is what
ne mean by taxpaying ability.
The second fundamental element
Is our Enthusiastically local type of
government in this country. Pre-
sumably we all hope to make some
progress toward the elimination of
some of our superfluous local govern
ments. But for the present and for a
long time to come we are likely to
continue to be governed by a multi
plicity of local governments, whose
limited jurisdiction makes it impos-
sible for them to administer income,
excise and more general forms Of tax
alton and consequently limits them
largely to the taxation of the tangible
property located within their terri
torial jurisdictions.
Occupies Unique Position.
"Now. with property occupying the
unique position it does in our economic
system and with local jurisdictions
occupying the dominant position they
do in our governmental structure, it
Is not only perfectly natural-it would
be utterly anomalous and inconsistent
II property did not constitute major
element in all of our revenue systems
and it probably will continue to con-
stitute such an element until we make
some radical change in the institution
OF private property or evolve some
more highly centralized type of gov
ernment than any We can now dis
Germ.
"This does not mean that there win
be no substantial changes in the char
acter or amount Of property taxation,