Page Six 



THE I. A. A. RECORD 



WATSON ANSWERS IIDITOR ON THE STATE 



INCOME TAX 



Editor, The Chicago Daily News, 

 Chicago, 111. 



THE reference to the State income 

 tax bill in your news article, April 

 28. and in your editorial the following 

 day needs correction. The question 

 asked me in the joint leg^islative hear 

 ing in Springfield related to the effect 

 on farmers of the provision permitting 

 any taxpayer on property to deduct his 

 property tax from his income tax. To 

 this question I replied that whether 

 such a deduction is permitted or not, 

 I doubted whether, under present con 

 ditions of farmers' income, five per 

 cent of them would pay any income 

 tax. 



I call your particular attention to 

 the words "whether such a deduction 

 is permitted or not" and "under pres 

 ent conditions of farmers' income.' 

 Both clauses were -omitted in the news 

 article, and their omission is the basis 

 of a so-called "admission" on my part 

 My reply was not an admission but a 

 statement of fact about the income of 

 farmers. Its truth has not been de- 

 nied and cannot successfully be chal- 

 lenged. 



Reference in your editorial to class 

 legislation shows that you have not 

 carefully considered the purpose and 

 effect of the income tax bill. Is it 

 class legislation for farmers and wage 

 earners to offer a constructive measure 

 designed to give owners of real estate 

 and tangible personal property (not 

 only farmers, but the much larger 

 number of city and village people) 

 some measure of relief from the unfair 



class legislation for the minority of 

 Illinois people who own real estate, but 

 pay nearly all of the taxes to ask for 

 a measure requiring some contributiori 

 to the cost of government from tht; 

 greater number of people who hav€ 

 much the larger portion of the income 

 of the State, but pay little or no di- 

 rect property taxes? If this is class 

 legislation, the revenue amendment 

 v/hich was supported last fall was 

 class legislation. Any other remedia 

 measure which might hereafter be of 

 fered would be class legislation. 



We hold that the present unfair tax- 1 

 ing system, which is taking an increas- 

 ing proportion of the return producec 



and deductions provided for income 

 from farm property apply also to in- 

 come from city and village real and 

 personal property. A very substantial 

 percentage of people owning city and 

 village property have income which, 

 without the exemptions and deductions 

 provided in the bill, would require 

 them to pay an income tax in addi- 

 tion to their property taxes. All au- 

 thorities agree that farmers have very 

 low net income. If there were no ex- 

 emptions and deductions provided in 

 the bill, comparatively few farmers 

 w^ould have any taxable net income. 

 These provisions of the income tax bill, 

 therefore, will help owners of city and 

 village property far more than they 

 will help farmers. 



Your argument that a tax on the net 

 income of persons would be shifted 

 brings you into conflict with practically 

 all economists. If you were right, the 

 people who have taxable net income 

 would not pay it, but would collect it 

 from others. Why, then, do they (or 

 you) oppose the bill? If some of the 

 provisions of the bill can be made "fket- 

 ter, why do not they (and you) help 

 to improve it? 



Other statements in your editorial 

 betray ignorance of the provisions of 

 the income tax bill and little compre- 

 hension of the serious situation it is 

 designed in some measure to relieve. 

 The small amount of tax it would re- 

 quire of people who now pay no direct 

 taxes could not be a burden to them. 

 They would be better citizens if they 

 I^aid it. It is no defense to say that 

 they pay indirect taxes, for property 



burden they are carrying under the ^^^^^^ ^^j.^ ^j.^ taxpayers also pay in 

 present vicious taxmg system? Is it| direct taxes. 



John C. Watson, 

 Director Taxation and Statistics. 



Income Tax Before Legislature 

 (Continued from page 2.) 



ate after a short, spirited debate, on 

 Thursday morning. The vote was 30 

 to 11. Senators Rodney Swift and 

 John Denvir attacked the measure bit- 

 terly. Voting for the bill were Abt, 

 Bailey, Barr, Bohrer, Boyd, Burgess, 

 Carlson, Dailey, Dich, Dunlap, Em- 

 mons, Flagg, Forrester, Hamilton, 

 Jewell, Kessinger, Lantz, McNay, 

 Meents, Meyers, Reynolds, Learcy, 

 by property, is class legislation, notl Smith, Sneed, Starr, Telford, Thomp- 

 designed to be such but not less effec- son, Urlson, and Woods. Denvir voted 

 tive than if it had been designed. for to enable him to enter a motion 



The people who are arousing class for reconsideration the following week, 

 feeling are not the proponents of the Against the bill were Barbour, Boehm, 

 bill, but the people who profit by th^ Broderick, Courtney, Haenisch, 



present unfair taxing system and figh1 

 every attempt to change it. 



Your reference to "various exemp- 

 tions adopted for their (farmers') 

 special benefit" is also without founda 

 tion. Farm property on the assess 

 ment books is now only about thirty 

 I>er cent of the total of all property 

 taxed in the state. The exemptions 



Huebsch, Hughes, Joyce, McDermott, 

 Marks, Swift. This bill has a good 

 chance to pass in the House next week. 

 There is no reason why the Chicago 

 Board of Trade should not be subjected 

 to the same supervision as are banks, 

 public utilities, and insurance com- 

 panies. There is a general feeling that 

 the Board would not objecti. to mild 



I- 



supervision such as is imposed by the 

 Kessinger bill if all its dealings were 

 legitimate and ahove board, i' .« ■.■■■ 



Rush Bills Burisd. 



The two Rush bills providing for 

 authorizing county advisers to vaccin- 

 ate pigs against cholera and test cows 

 for tuberculosis are buried in sub com- 

 mittee. These bills are not sponsored 

 by the I. A. A. and will not be sup- 

 ported by the Association. Their pas- 

 sage might lead to ill consequences. 



The anti-poultry thief bill sponsored 

 by Prairie Farmer is getting on nicely 

 and will probably go through without 

 opposition. Flood sufferers in the Illi- 

 nois Valley will be given aid as a re- 

 sult of the passage of the Arnold bill 

 appropriating $250,000 for this pur- 

 pose. The University of Illinois ap- 

 propriation measure passed without dis- 

 sent. The well known woman's eight 

 hour bill regulating the hours women 

 may work to a maximum of eight daily, 

 lost by three votes. Lottie Holman 

 O'Neill, its sponsor for the past three 

 of four sessions, promises to stage a 

 comeback in the next Greneral Assem- 

 bly. Watch for the next legislative 

 story in the I. A. A. Section of the 

 Bureau Farmer. j jp ; 



MISSOURI CUTS LAND AS^ 

 SESSMENTS 



The State Board of Equalization re- 

 cently voted to cut farm land valuations 

 for assessment purposes $21,281,930 

 announces the Missouri Farm Federa- 

 tion. The net reduction in other farmer 

 owned property consisting of livestock 

 and machinery amounted to $3,249,688 

 below last year. 



"This reduction in valuations comes 

 after many months of work by the Mis- 

 souri Farm Bureau Federation first 

 with the assessors before the assess- 

 ments were made, then in rendering as- 

 sistance to tlje assessors in helping 

 them arrive at fair valuations of the 

 various classes of property," says the 

 M. F. B. News. 



The Missouri Farm Bureau appeared 

 before the State Tax Commisison and 

 the State Board of Equalization fre- 

 quently to present the need for a true 

 valuation of f ram property. There was 

 a slight increase in valuations on sheep 

 and a larger one on hogs. 



The total net reduction, however, on 

 all classes of farm property amounts to 

 $24,531,618. Should the state tax rate 

 this year total 12 cents on $100 valua- 

 tion, this reduction will mean a saving 

 of $29,437.92 to the farmers of Mis- 

 souri. 



f 



Bloomlngton Dairymen Organize 



Milk producers about Bloomington 

 are making rapid progress with their 

 new association modeled after the one 

 at Peoria. More than one-third of the 

 dairymen have already joined the or- 

 ganization. One of the three larger 

 dealers recently started price cutting 

 by selling ten milk tickets for one dol- 

 lar, which means a drop in the retail 

 price of 1 % cents a quart. 



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