COST OF GOVERNMENT IN MASS. 211 



Nero Taxes^'^ 



While the principal increase has been in property taxes, two new taxes 

 have been introduced since 1910 that add a substantial amount to total tax 

 levies. The income tax introduced in 1917, together with automobile registra- 

 tion fees, furnishes 8.7 per cent of total taxes for State and local purposes. The 

 entire income tax, less the cost of collection, is distributed to cities and towns. 

 The fees from automobile registration, together with drivers' licenses and court 

 fines for highway penalties, make up most of the revenue of the State highway 

 division. While not a new source in the strict sense of the word, higher registra- 

 tion fees, together with increase in total collections, have made this source of 

 revenue more important to the State government than any other. 



Massachusetts was one of the first group of states to use a State income 

 tax as a partial substitute for a property tax on intangible property. The tax 

 has been in operation for twelve years and has been successful not only in rais- 

 ing additional revenue but in partially equalizing the tax burden between 

 owners of real property and the owners of intangibles. It has also brought 

 about a better distribution of taxes between property owners and the salaried 

 groups not previously contributing directly to the cost of government. 



Massachusetts was one of the first states to study systematically the prob- 

 lem of taxing corporations. As a result there are now approximately twenty- 

 five taxes applying to different types of corporations. More than one-half of all 

 corporation taxes collected are distributed to cities and towns on various bases. 

 The total estimated corporation taxes for State, local and federal purposes are 

 shown on Chart 11. 



The Tax Rate 



The tax rate per $1000 assessed valuation is commonly used as a measure 

 of the increase in taxes as well as of tax differences between towns. In 1926 the 

 tax rates of the various cities and towns in Massachusetts varied from $10 to 

 $50.40 per thousand of valuation with an average rate of $30.34 for the state. 

 Table 39 shows the number of cities and towns having various rates in selected 

 years. 



Table 39.— Tax Rate in Cities and Towns, for Selected Years. 



From Table 39 it appears that in 1925 only 30 cities and towns had rates 

 of $20.00 or less, while in 1910, 305 were below this figure. Since 1920, rates 

 have varied more between municipalities than in previous years, due to the in- 

 crease in expenditures and to the failure of many towns and cities to raise 



" Since this was written, the gasoline tax has been added, and the automobile ex- 

 cise tax has replaced the local taxation of motor vehicles. 



