TAX AND TAXES 



5714 



TAX AND TAXES 



in the. states, the provinces levy special taxes, 

 such as those on incomes and inheritances, and 

 also derive some revenue from royalties and 

 special license fees of various kinds. All local 

 or direct taxes, however, are levied by and for 

 the local units. The list or "roll" of the asses- 

 sors gives the value of all the taxable real and 

 personal property. The municipal council 

 levies a tax on this property sufficient to pay 

 the debts and expenses of the government. In 

 case a taxpayer feels that he is assessed or 

 "rated" too high, he may appeal for a reduc- 

 tion to a court of revision, usually composed of 

 members of the local council, and finally to the 

 regular courts of the province. 



National Taxation. In Canada the Do- 

 minion government levies no direct taxes, and 

 in the United States only the income tax is a 

 national direct tax, and that only since 1913. 

 Both Canada and the United States derive 

 most of their revenue from customs duties 

 and internal revenue. In a technical sense the 

 United States income tax is a direct tax, but it 



falls on such a small part of the people that it 

 still remains true that both national govern- 

 ments are supported by indirect taxation. 

 Some idea of the importance of trade and com- 

 merce may be gained from the fact that the 

 United States government derives one-third of 

 its income from customs dues and one-third 

 from internal revenue, and the Dominion gov- 

 ernment receives two-thirds of its total income 

 from customs duties alone. If the customs du- 

 ties, for any reason, should be greatly lessened 

 or totally disappear, radical changes in the sys- 

 tem of taxation would be inevitable. W.F.Z. 



Consult Adams' Public Finance; Daniel's Ele- 

 ments of Public Finance; Judson's The Taxing 

 Power. 



Related Subjects. In connection with this 

 discussion of taxes the reader may consult the 

 following articles in these volumes: 

 Assessor Internal Revenue 



Customs Duties Poll Tax 



Free Trade Single Tax 



Income Tax Tariff 



Inheritance Tax 



The Mathematics of Taxes 



The amount of tax levied by the government 

 depends upon the expenses it must meet. The 

 rate of tax depends upon the expenses to be 

 met and the value of the property to be taxed. 

 For example, the town of D has taxable prop- 

 erty assessed to $10,000,000, and the tax to be 

 raised is $275,000. The rate of tax is 2%% or 

 2% cents on the dollar, or 27% mills on the 

 dollar. The rate is the relation of the tax to 

 the assessed value of the property, as shown 

 below : 



Rate = Tooooie^ ~ Toooo - 2 % % 



In the town of D a person owning property 

 assessed at $16,500 will pay in taxes .02% of 

 $16,500 or $453.75. 



Problems. 1. There is to be raised in a cer- 

 tain town for a new school a tax of $8000; 

 the assessed valuation of property is $400,000. 

 What is the rate of taxation? What is the tax 

 of Mr. James, who owns property assessed at 

 $1,350? 



Solution : 



Tax = $8000 



Assessed valuation = $4000 00 



2 



Rate of tax=- 



= 2% 



* 100 

 Mr. J's tax = .02 of $1350 = 



2. In a certain large city the tax needed was 

 as follows: for the state $1,300,150, for the 

 county $1,800,000, for the city $5,478,300, for 

 the schools $6,000,000, for the parks $1,500,800. 

 The city property was valued in full at $1,- 

 286,340,000. Property was taxed on % of full 

 value. What was the rate of taxation? What 

 was the tax of Mr. N, who had property valued 

 at $7500, full value? 



Solution : 



State tax $ 1,300,150 



County tax 1,800,000 



City tax 5,478,300 



School tax 6,000,000 



Park tax 1,500,800 



Total $16,079,250 



Assessed property value = 



268,000 



$16,079,250.00 _ 



$1,286,340,000 



= $257,- 



- 



$275,268,000 



Assessed value of Mr. N's property = = 



$1500 

 Mr. N's tax = .06}4 of $1500 = $93.75 



3. In the town of E a tax of $20,000 is 

 needed; there are 380 polls, each paying $2. 

 How large a property tax must be raised? 

 Ans. $19,240. 



4. If the rate of tax is $13 on every thousand 

 dollars' valuation, what is the tax of a person 

 owning property valued at $7000? 



