T^VEXTY-NI^'TH FHUIT-GROWERS" CONVENTION. 



19 



and upon the Avhole "chaos" is the only descriptive term applicable 

 to existing conditions in commonwealth taxation. 



There is a marked tendency in all these States toward making earn- 

 ing power the basis of taxation for quasi-public corporations. Properly 

 directed, this must be regarded as the correct principle and capable of 

 practical application to such corporations under existing industrial 

 conditions. There is also, hoAvever, a strong inclination to cling to the 

 old system in part, and to use this principle in conjunction with some 

 feature or factor of the property tax, more particularly to use earning 

 power as a basis of property valuations in connection with property tax 

 or "uniform" rates. 



A mistaken conception of the property tax theory of "uniformity," 

 and a general disposition to apply the misleading iron rule of equal 

 taxation to all forms of property, are revealed in most of these States, 

 so far as public sentiment is concerned. As bearing upon this observa- 

 tion, the following is quoted from the case of Pacific Express Company 

 vs. Seibert, 142 U. S. Supreme Court Reports, page 351: "This court 

 has repeatedly laid down the doctrine that diversity of taxation, both 

 with respect to the amount imposed and the various species of property 

 selected either for bearing its burdens or for being exempt from them, 

 is not inconsistent with a perfect uniformity and equality of taxation 

 in the proper sense of those terms; and that a system which imposes 

 the same tax upon every species of property, irrespective of its nature, 

 condition, or class, will be destructive of the principle of uniformity 

 and equality in taxation and of a just adaptation of property to its 

 burdens." 



The great problem of commonwealth taxation, of commanding in- 

 terest in all States, consists practically of reform in the methods of 

 taxing corporations and individual personalty of an intangible char- 

 acter, and an improved administration of a circumscribed property tax. 



The principle that taxes should be levied in proportion to ability to 

 pay, and that, even under the general property system, they are de- 

 signed to be upon persons rather than upon property, is generally 

 recognized. Under existing economic conditions property is no longer 

 regarded as an adequate test of ability to contribute to the support of 

 the Government. Hence, the marked tendency to apply different tests 

 to special classes of property owners. There is a growing class of 

 citizens who receive large incomes or salaries, and enjoy all the advan- 

 tages of society and good government, who, though possessed of abun- 

 dant ability to pay taxes, are, under existing systems, practically exempt 

 from taxation or are inadequately taxed. This class is receiving, and 

 must continue to receive, especial attention in the revision or reforma- 

 tion of taxing systems in the several States. 



