Montana labor news., 1938-02-24
TEACHERS HEAR
ISSUES

MISSOULA.-Taxation problems
was the subject for discussion at an
open meeting of Local Union ACT at
the State University on the evening
of February 7th. Members of the
last legislature from Missoula Coun-
ty and local members of the State
Board of Education were invited to
attend and to take part in the dis
cussion.
Speakers were Mr.. A. P. L. Turn
er and MI. M. c. Turney, members
of the Economics department, and
Mr.. F. E. Coad, assistant professor
in the Law School. The general
property tax, the sales tax, and the
income tax were surveyed in their
general aspects, and some local ap-
plications were pointed out.
Property taxes have long been the
backbone of our tax system, it was
stated, and r likely to remain so,
in spite of their obvious disadvan-
tages. No increase, however, can be
expected in the near future from the
general property tax, At the pres
ent time, the problem of delinquency
overshadows all other questions rel
alive to this tax. In Montana. it
was stated, there were 10 million
dollars in delinquent taxes in 1887,
amounting to five per cent of the
total valuation. The significant fact
in this connection is the high cor
relation existing between tax delin-
quency and the type of land or prop
erty taxed. 1t seems fairly obvious
that the property tax has reached
its maximum productivity in this
state for the present.
Sales taxes, on the other hand, are
of fairly recent origin. In 1886, "a
states had a sales tax. In most cases,
this tax has been passed as an emer-
gency measure to are for relief or
for educational needs. Few states,
however, have retired the tax once
it was adopted, and there is evil
dence that its status is becoming
more permanent. The great adj
vantage of the sales tax is, of course,
that it brings in a stable amount of
revenue at a small cost for collec-
ton. Surprising Montana had had
a three per cent sales tax in 1886,
it would have produced approx
mately 100000 dollars in revenue,
based on retail sales for that year of
1870 million dollars. On the other
hand, the sales tax falls most heavily
on those least able to pay. It is a
tax on needs, not on the ability to
pay. It is a tax on the consumer,
whether his income be 500 dollars
or 500 thousand dollars.
A tax which has taken the place
of the retail sales tax in some states
is the gross income tax. It is a tax
upon the merchant or anyone dis
pensing services, to be fixed at a
given rate and collected in one sum,
rather than from the consumer at
the time of the transaction. Revenue
resulting from this tax will amount
to practically the same as that from
a sales tax, but the irritation caused
by the innumerable details of the
sales tax is avoided.
AS for the income tax, it was
pointed out that Montana has a very
low rate on incomes. In the neigh
boring states of Idaho and Oregon,
the tax rate on incomes is almost
double that in Montana, and the
exemptions are lower. The income
tax is generally conceded to be the
most just form of taxation, in that it
is based on the ability to pay. It
must be remembered, however, that
there are dangers in pushing income
taxes too high and too suddenly.
Gift and inheritance taxes should be
frightened in order to gather revenue.