NEED OF A STATE TAX COMMISSION IN COLORADO 95 



Among these are the substitution of the habitation tax or the income 

 tax, or the separation of the sources of the state and local revenue. 



The habitation tax is a tax on rents. It is recommended as a 

 substitute for the tax on personal property. It is urged that a tax 

 on rent would be easily levied, as the rent which everyone pays is 

 well known. By making the tax a lien on the property, its payment 

 would be guaranteed. By exempting rents below a certain amount, 

 and by making special exemptions in the case of families with a large 

 number of children as is done in Tasmania, the tax can be so arranged 

 as not to bear heavily on the poor or discriminate against large 

 famihes. Whatever the theoretic possibilities of this tax, it is appar- 

 ent that, in the present state of public opinion, it is not likely to be 

 adopted in the United States. 



The income tax is not generally beheved by American writers 

 to be suited to the use of the states as a means of getting revenue. 

 It is disHked by our people on account of its inquisitional features, 

 and the ease of migration here would tend to make capital leave 

 states where the tax was well enforced. Attempts at rigorous enforce- 

 ment can at best be but partially successful, as it is necessary to take 

 the taxpayer's word as to the amount of his income in probably the 

 majority of cases. In England, where the income tax is relied on 

 for a large part of the total revenue, the taxpayer's statement is 

 taken for 59 per cent of the total income tax revenue. While these 

 difficulties might be overcome, the adoption of this tax by our states 

 must await a long period of financial education. 



Another plan by which it is proposed to escape the evils of the 

 general property tax, and particularly the injustice of underassess- 

 ment, is what is known as the separation of sources of state and 

 local revenue. By this plan the same objects would not be taxed for 

 state and also for local purposes. For example, the state would 

 derive its revenue from taxes on corporations, mortgages, stock 

 transfers, liquor licenses and the like, while the local units would 

 secure a revenue by using the general property tax. In this way, 

 the assessment made by the local assessor would not be used as a 

 basis according to which the state tax would be apportioned to that 



