FARM TAXES IN MASSACHUSETTS 115 



Another fact should he considered in comparing taxes with income for the 

 farms under discussion. Many of the farm owners, especially in the western 

 part of the state, derive a considerahle part of their cash income from out- 

 side work, away from their own farms. Income from outside sources can not 

 logically he included in income from the fann. Accordingly the income from 

 outside sources was subtracted from the farm income in order to show the 

 relation hetween taxes and the actual income from the farm business. On this 

 basis, taxes equalled 19.2 per cent of the corrected farm income of 227 farms 

 in 1922, while in two towns in the western part of the state taxes took over 

 40 per cent. Individual farms in several towns did not show a net cash in- 

 come large enough to pay taxes. This fact supports the statement often made 

 by hank appraisers that taxes are larger than the fair rental for many farms. 

 However, it must be remembered that tlie farm furnished a dwelling, some 

 fuel, and a considerable quantity of food for the family. In spite of the fact 

 that assessed values are low in proportion to actual values, many farms are 

 not making interest and taxes. This means that reported values are probably 

 too high and in many cases the assessor is closer to the actual value than the 

 owner, at least closer to the productive value for farming purposes. 



The Relation Between Corporation Taxes and Income. 



It has been pointed out tliat farm property is assessed relatively lower than 

 other property and it remains to be discovered whether there is a correspond- 

 ing difference in the relation between income and taxes. Fortunately, cor- 

 poration data are available from which rough comparisons may be made. In 

 1925 the Commissioner of Corporations and Taxation reported for the first 

 time the total net income chargeable to Massachusetts received by domestic 

 and out-of-state business corporations operating in the state. The total net 

 income reported was $255,397,770. Taxes paid by business corporations during 

 1925 were as follows: 



Total net excise tax Ie\ ied $13,384,000 



Property taxes paid, based on an estimate of 

 an assessed valuation of 80% of $1,250,000,000 

 at state rate of $28.53 per $1000 28,530,000 



Total Massacinisetts Taxes 41,914,000 



Net income from business in the state 255,397,770 



Income before deducting property taxes 283,927,770 



Per cent of iiicome taken for 

 Massachusetts taxes 1^.76 



In addition to the excise and property taxes collected in Massachusetts, tlie 

 Federal government imposed a tax of 121/, per cent upon the net income after 

 allowing for local and excise taxes already paid. The total taxes of corpora- 

 tions doing business in Massachusetts in 1925, therefore, amounted to 26 per 

 cent of their net income before deducting taxes. 



No data are available on incomes of business corporations for earlier years, 

 but from statistics of public utility companies it is apparent that the percent- 

 age of income going to taxes has been increasing. The percentage of net in- 

 come going to taxes, before making deductions of taxes, interest, dividends, 

 etc., is shown in the following summarv: 



