Henderson daily dispatch., 1936-10-29

and occupies a $4,000 home would
pay taxes on only $4,000 valuation. A
person who occupies a home valued
at $1,000 or less would pay no taxes
at all.
Nov let us see what would hap
pen If homes were exempted from
taxation on $1,000 valuation. In the
first place, the amendment would al
low the exemption only on homes oc-
cupied by their owners. 1t would not
apply to homes which people rent.
And so applying the exemption only
to .he class of property owners set
forth in the amendment, that is home
owners, we find that in Cleveland
County over IA percent Of the total
valuation on, which the tax rate is
levied would Sbe exempted from taxa
ton; in Duplin County over 20 per-
cent would be exempted; in Gates
County nearly % percent; in Caswell
County nearly Is percent; and in War
rem County nearly SO per cent of the
valuation of all property in the coun-
ty would be exempted from taxation.
Nov this amendment will not re-
duce the cost of government. The
money must come from somewhere,
and so it can only mean that if the
valuation is reduced by IA, 25, or so
percent, the tax rate must be increas-
ed a corresponding amount to raise
enough revenue to operate the local
government. In other words, property
which people rent: homes, farms,
apartment houses, property of mer-
o1,o ~
ers who would not benefit from the
exemption, will have to stand a much
larger tax than they are at the pres
ent time paying. The effect of the
amendment would be to raise taxes on
one class of property in order to SUBJ
sidiZe another It would mean that
the many people living in their
own homes valued at $1,000 or less
would pay absolutely no tax what
soever They would pay nothing for
such services in a city, for example,
as keeping the street cleaned in front
of their homes, removing the gar
bage at regular intervals, maintaining
sanitary sewers, police protection and
fire protection. These services would
all be free to this favored class. They
would pay no service charges, or as
we usually call them, taxes, for these
functions. They would be paid for by
someone else. After all, a local pro-
perty tax is nothing more than a SER
vice charge for functions and services
performed by the local government
as the result of demands made for
these services by the citizens them
selves
"Now they say that .nis exemption
proposal will encourage home owner
ship. In fact, some very worthy and
distinguished gentlemen are advocat-
ing the passage of the amendment for
that reason. They say it will abolish
the evils of farm tenancy. 1 am very
much afraid that these gentlemen
have not given much thought to that
argument, but have merely accepted
the word of others. Now let's think
this thing through. Let's take an ex-
ample. The tax rate of Wake County
is IS cents per $500 valuation. If a
farm is worth $1,000 the taxes on
that farm for one year would be $3.50
Or, if farm is worth $4,000 and ST.
600 were to be exempted from taxa
ton, the savings in taxes would be
$3.50 No man can stand up and con-
vince me that by escaping the pay.
| ment of $3.50 in taxes during one wear
that that is going to encourage home
ownership. No, all it will do will be to
save one individual a very small a.
mount; but the reduction in taxes fol
! thousands of individuals will total 6
very large amount and will wreck
local government finances. Oh, but
they say they do not desire to apply
the full $1,000 exemption at first. We
can start with $500, they say, and
gradually step it up until after a pc.
Rod of years it will be to the maxi
mum limit of $1,000. Well, supposing
we do start at only $500 exemption
on home occupied by it's owner. If
this home were a farm located in
Wake County and $500 were exempted
from it's valuation, then it is to be
saved the grand and magnificent total
of $3.50 per year in taxes This, say
our friends who advocate this amend
ment, will encourage home ownership
$3.50.
well, you say, if the amount of
taxes which would be exempted is so
small, why 90 the North carolina
League of Municipalities, the County
Commissioners Association and other
non-partisan agencies oppose the
granting of this exemption. The rea-
son is that although the amount of
tax saved in any individual instance
is small, so small, as I have said, as
not to encourage home ownership,
even though it is small, the total a
mount will be enough to cause a seri-
Gus situation in local government fl
nances. It would he enough to cause
a considerable increase in the tax
rate. Well, they say, the Supreme
Court would probably interpret the
exemption as not applying to debts
contracted by cities and counties for
capital improvements in the past. The
court would hold that the exemption
would apply only to taxes levied for
operating expenses or for new debts.
That could only mean that two tax
rates would have to be levied, one on
the full valuation to pay for debts
contracted in the past, and the other
on the reduced valuation to pay for
current operating expenses and new
debts. This would mean two sets of
tax books, computing two different
1f