The 



UliiKHs A^icultuml Association 



:m-mm ^ibcjORD 



Published monthly by the Illinois Agricultural Association at 166 So. Main St., Spencer, Ind. Editorial Offices, 608 So. Dearborn St., Chicago, 111. 

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 vided in Section 412, Act of Feb. 28, 1926, authorized Oct. 27. 1925. Address all communications for publication to Editorial Offices, lUinoig Agri- 

 cultural Association Record, 608 So. Dearborn St.. Chicago. 



Number 5 



MAY, 1931 



Volume 9 



State Income Tax Before House 



Opponents of Measure Raise Smoke Screens and Seek to Delay Consideration 



RATTLING of skeletons in the closet 

 by champions of the tax dodgers 

 has been heard as a result of the hearing 

 before the House revenue committee at 

 Springfield last week when the Lantz 

 state income tax bill and companion 

 measures moved on toward considera- 

 tion in the House. . 



A blast was unloosed against the 

 measure by the Civic Federation of 

 Chicago which represents a 

 small group of wealthy men 

 including large holders of 

 stocks and bonds. The bur- 

 den of the plaint was that 

 security holders would be 

 exposed by the income tax 

 and their stocks and bonds 

 placed on the property tax 

 books to suffer double taxa- 

 tion. 



As a matter of fact pro- 

 vision has been made for 

 administration of the pro- 

 posed income tax by a sepa- 

 rate Department of Income 

 Taxation which under the 

 act cannot impart informa- 

 tion to other taxing bodies. The expo- 

 sure argument is being used as a smoke 

 screen to hide the real reason of many 

 for opposing a state income tax: namely, 

 to avoid paying a fair share of the tax 

 burden. 



Another reason advanced by oppo- 

 nents is that local property taxes would 

 not be reduced by the proposed income 

 tax measure. Yet, if the rates were 

 raised to provide more revenue to re- 

 duce local as well as state taxes the 

 very people who advance this argument 

 would be the first to howl; in fact the 

 Civic Federation contradicts itself when 

 It criticizes Senate Bill 138 because, in 

 harmony with some of the most pro- 

 gressive income tax states, its highest 

 rates are slightly higher than is the case 

 in a few other states. . , . %.'. 



The old bogy of unconstitutionality 

 raised in the Senate is again being 

 trotted out in the discussions over in 

 the House. Yet, there is ample justi- 

 fication in past State Supreme Court 

 decisions and in the constitution itself 

 for believing that the proposed income 

 tax, which is an excise tax, is just as 

 constitutional as the inheritance tax 

 with its graduated rates, the gas tax, 



Tax dodgers get active against income tax 

 bill. - ,-;. 



Smoke screens raised to hide real reasons for 

 opposition. 



Chicago paper changes front, admits income tax 

 a fair tax but wants reapportionment so Chicago 

 can rule the state. •/■_■ \.-::-„:\-^_:..: r,:- .y\~ ;":■:■■■.', , 



Big real estate men want property tax offset 

 feature; objections to this proposal cited. 



How^ companion bills to S. B. 138 make it a 

 "replacement" tax. 



Cost of administration much less than cost of 

 property tax. 



and any other excise taxes. 



The Chicago Tribuiie, which has been 

 a very unfair opponent, apparently has 

 had a twinge of conscience for in a recent 

 editorial (May 8) it modified its previous 

 stand by admitting that the income tax 

 is a sound and fair tax; that ability to 

 pay is an accepted basis of taxation. It 

 admits that "One man may be ruined 

 by the levy on his possessions; another 

 may have an income unrelated to his 

 taxable wealth. Taxation of the means of 

 livelihood without consideration of the 

 revenue produced has injustice bound up 

 in it. A man taxed upon the volume of 

 Tils Investrrients may have his living 

 taken from him. He can stand a tax 

 upon the income derived from these 

 securities." .''.■."•-'•••:•''=.• v;; ;-•:••- 



So has the Tribune endorsed an in- 



come tax and candidly implies In the 

 same editorial that its opposition is not 

 based on any lack of merit of the pro- 

 posed legislation, but purely because the 

 legislature has not seen fit to reappor- 

 tion representation according to popula- 

 tion and allow Chicago to rule the rest 

 of the state. •• ' • .' •••.:■■ 



The opening hearing on the bill and 

 its companion measures before the House 

 Revenue Committee on May 

 6 was marked by general 

 agreement that owners of 

 real estate are being taxed 

 to death; that some relief 

 must be provided. Nor was 

 there opposition expressed to 

 the income tax as a fair 

 method of deriving reve- 

 nue. 



Representatives of big real 

 estate holders in the larger 

 cities, many of whom also 

 own large blocks of stocks 

 and bonds, held out for the 

 property tax offset feature 

 under which property taxes 

 would be deductible directly 

 from computed income taxes. Thus, the 

 real estate owner who pays as much as 

 $1,000 in property taxes would have to 

 get a net income of at least $27,167 if 

 Senate Bill 138 is enacted, before he 

 would pay any income tax. 



It is very likely that this feature 

 would influence many who now own 

 no real estate but who come in the 

 ilicome tax-paying class, to buy a lot, 

 a home, or a flat building, or perhaps 

 even a farm. "Buy a Lot and Save 

 Your Income Tax" might be the slogan 

 of many a subdivider and real estate 

 operator. 



The weakness of the property tax off- 

 set feature lies in the fact that it would 

 greatly reduce revenue derived from the 

 income tax, thus throwing a greater 

 portion of state taxes back on property 



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