TAX AND TAXES 



5713 



TAX AND TAXES 



citizen should pay taxes, but the expense of 

 operating the machinery of taxation should not 

 add to his burden. 



Taxation in Practice. Local Taxation. In the 

 United States the state and its subdivisions 

 raise money only by direct taxation. All of 

 the states have a general property tax, some of 

 them have inheritance taxes, others have in- 

 come taxes, and a few still have the poll tax. 

 Inheritance, income and poll taxes provide use- 

 ful additions to the revenue of a state, but 

 their uncertain character has so far prevented 

 their adoption as the mainstay of a state sys- 

 tem of taxation. In all the states the general 

 tax on property is the chief source of income 

 for all the units of government. 



Before any money can be raised by property 

 taxes, two fundamental questions must be an- 



treasurer). All taxes are paid first to him, and 

 are properly distributed by him. The tax- 

 payers of a township must first pay the ex- 

 penses of their township. But each township, 

 being a part of the county, bears its share of 

 the expenses of county government. The state, 

 too, calls on each county for its share of the 

 funds which shall maintain the state govern- 

 ment. The amount of money which each unit 

 is required to pay to the next higher unit is 

 determined by the county board and state 

 board of equalization in proportion to the tax- 

 able property in each unit. Thus the state is 

 really supported by the counties, which are sup- 

 ported in turn by the townships. It must be 

 remembered, however, that the county and the 

 township are created by the state ; they tax in 

 their own name, but they derive their authority 



Mr.A-s Tax- $100 



"To Ibwnship Treasurer 

 From Whose Hand It Is Distributed Practically as Follows; 



School District 



Township 



County 



State or Province 



swered first, what is the value of the taxable 

 property, and second, how much money is 

 needed. The first question is answered by the 

 assessors. Every owner of real or personal 

 property is required by statute to file with the 

 assessors a statement of his property together 

 with its "fair cash value." On the basis of 

 these schedules and on the results of their own 

 investigations, the board of assessors fixes the 

 amount on which the owner is taxed. If the 

 owner feels that the assessed valuation is too 

 high he may ask the board of review to re- 

 duce it. 



The second question is not answered so 

 easily, because the tax paid by an owner, whom 

 we may call Mr. A, is distributed among sev- 

 eral governmental units approximately as indi- 

 cated in the diagram below. 



The most important man in this system is the 

 township treasurer; (in some states, however, 

 the taxes are paid to the county collector or 

 358 



from the state. The total amount needed for 

 all purposes, divided by the assessed value of 

 the property in the state, determines the tax 

 rate; for example, if $1,000,000 is needed for 

 all expenses, and if the value of all property is 



1 r\oo nnn i 



$200,000,000, the tax rate 



or one-half of 1 per cent. Standing somewhat 

 aside from these other units is the school dis- 

 trict, which is a division of the township or 

 county for school purposes; in practically all 

 states the voters in a school district pay special 

 taxes to support the schools in that district. 



The Canadian tax system shows one impor- 

 tant difference from that of the United States. 

 In the latter the individual state receives most 

 of its income from a direct property tax; in 

 Canada the province, which is the correspond- 

 ing division, levies no general property tax, but 

 receives most of its income in the form of a 

 subsidy from the Dominion government. As 



