Askov American. [volume] (Askov, Pine County, Minn.) 1914-current, 1940-06-13
STATE INCOME TAX HAS BEEN A
REPLACEMENT TAX
(By Hjalmar PeterSen)


ProgreSsives throughout the nation
have long advocated the assessment
and collection of taxes on the basis of
ability to pay. Therefore, state net
income tax on individuals and cor
porations became plank early in
Farmer-Labor platforms and has been
consistently followed up.
Those who opposed an income tax
in the state of Minnesota argued con-
tinually that it was necessary to
amend our constitution in order to
have progressive graduated net in
come tax.
Such an amendment to the consti-
tuition was voted upon by the cleo
torate in 1920 but failed of passage.
The amendment was brought to vote
of the people again in the election of
1882 but again it failed of passage,
though a majority voting upon the
question approved the amendment
It failed because of the constitutional
requirement that an amendment must
have a majority of all those voting
at the election.
Became Law in 1888.
In the 1888 session of the Legis-
lature, the liberals were in control
of the House and much progressive
legislation was enacted into law, in
Guiding the income tax. Other pro-
greSsive legislation that became law
in that session included the Home
stead Preferential Act, lowering taxes
on all homes in the state; reduction
of minimum automobile license fees
from $40 to So; and the mortgage
moratorium.
In the 1888 session, after the statu-
tory income tax bill had been intro
duced, conservatives were still pro-
testing that the constitution should
be amended before a statutory law
was enacted. A bill was introduced
for an amendment. It was argued
that the maximum rate of income
taxation should not be more than
three times the minimum rate. In
other words, under that proposal, if
the statutory minimum rate was one
more than three per cent. That bill
for constitutional amendment was
shelved by the liberals.
No More Delay.
Leaders of the House, however
thought it was time to act-that there
had been enough dilly dallying and
planned delay. The people did not
want to hear any more about con-
stitutional amendments, opinions of
constitutional lawyers, and the like,
and so a statutory income tax bill
was drawn up without delay, public
hearings held and enacted into law
in that session.
The late Governor Floyd B. Olson
was a strong advocate of the law
Newspaper articles were written,
radio talks given, and the people
generally informed on provisions of
the act were alert to the need of it..
The attorney general of the state and
his predecessor had given out opin-
ions to the effect that a statutory in
come tax would stand up in court
without amending the constitution.
Rightly SO, the law of that session
was later upheld by the State Su-
preme Court.
The rates in the first income tax
law of 1888 ranged from one to five
per cent on individuals and a like
rate on the net income of corpora
tons. 1t provided exemptions of
$1,000 to corporations; $1,000 to single
persons; and $4,000 to married per-
sons; also an exemption of $3.50 for
each dependent. All of the money
was allocated to the public schools,
regardless of where collected, on the
basis of children of compulsory school
age residing in the district.
Tax Goes for Education.
Realizing that education is a state
problem, it is fundamental, there
fore. that there be equal educational
opportunities so that the boy or girl
living in a poorer section of Mime
sofa will have the same chance for an
education as has the boy or girl in
weather. district. For that reason,
the Legislature of 1888 allocated the
income tax money to the public
schools. The distribution of income
tax money could hardly be for bet
ter purpose.
In the 1887 session, the law was
amended so that the rate for indi-
vidual income taxpayers ranged from
one to 10 per cent. The corporation
income tax was made seven per cent
for two years, automatically going
to six per cent in 1889, with 10 per
cent credit for Minnesota payrolls.