XXXVII. TAXATION: THE PROPERTY TAX

“Taxation without representation is injustice and oppression."

-Burke.

Introduction.-The expenses of government amount to a vast sum of money. The salaries of officers and employees have to be paid, large public buildings have to be erected, roads and streets have to be built and kept in repair, a costly system of public schools has to be supported, vast fleets and armies have to be maintained. The money necessary to pay for all this comes from the pockets of citizens in the form of taxes. In this lesson and in the next you are to learn how government exercises the power of taxation, how it compels citizens to contribute money for the support of government.

Taxation a Power of the Lawmaking Department.Which of the three great departments of government has the power of taxation? This power belongs to the lawmaking department and to it alone. A Mayor, a Governor, a President, a Judge, cannot raise a single penny by taxation. Americans will pay only such taxes as they themselves in person have agreed to pay or such as their representatives in a legislature or lawmaking body have ordered to be paid. The City Council levies the city tax, the State Legislature levies the State tax, and Congress levies taxes for the support of the National Government.

Not only does the lawmaking branch have the power of raising money by taxation, but it also has the power of directing how that money shall be spent. The executive branch, it is true, actually spends the money raised by taxation, but it must spend this money precisely as the legislature directs. The legislature orders a certain sum of money to be collected from the people and placed in the public treasury and then it prescribes the manner in which that money is to be taken out and spent. Thus the power of the purse is given outright to the legislative department. In our study of the powers of government few facts have greater importance than this.

The Property Tax.-A very large part of the money raised by taxation is collected from property owners who are compelled to pay the tax because they are property owners. The rule followed in laying taxes on property is this: The more property a man owns the greater must be his share of the tax.

For purposes of taxation property is regarded as being of two kinds: (1) real property, which includes lands and buildings on land, and (2) personal property, which includes such things as household furniture, money, goods, bonds, stocks, mortgages, jewels, horses, carriages, and farming implements.

In most of the States there are certain kinds of property that are free from the burden of taxation. Thus, churches, cemeteries, schoolhouses, free libraries, charitable institutions, and all public buildings, are exempt from taxation. Likewise, in many States, household furniture

worth no more than two or three hundred dollars is not taxed.

How Each Taxpayer's Share is Determined.-A tax collector presents to your father a tax bill, calling for, let us say, $33.50. How was this bill made out? How was it determined that your father should pay to the support of the government just $33.50, no more, no less? Let us try to get an answer to this question.

Let us suppose that you live in a town, and that it is your town government that has sent the bill. The first step taken is to determine how much money is needed. It is found that the town needs

For its schools, police, streets, waterworks, and other ex

penses of Town Government

For taxes due to the County Government
For taxes due to the State Government

$40,000

6,000

4,000

$50,000

This $50,000 must be paid by the property owners of the town. In order to distribute the burden fairly, one or more Assessors visit all the houses and places of business in the town, and place upon every man's property what they think is a fair valuation. Thus they find that A has a house worth $3000 and furniture worth $500, or property worth in all $3500. B is found to own a factory worth $75,000 and goods worth $25,000. He is, therefore, assessed at $100,000. C owns building lots worth $2000 and horses and carriages worth $500. C's property, therefore, is put down on the Assessors' list at $2500. D owns a little house which the Assessor thinks

is worth $400; his furniture is so scanty that no value is put upon it, and it escapes taxation. Your father's property, we will suppose, is placed on the Assessors' list at $1675. In this way the value of the property of every taxpayer in town is estimated by the Assessors and put upon the assessment list. By adding together the fortunes of A, B, C, D, etc., the entire value of all the property in the town is found. Let us suppose that this amounts to $2,500,000. You remember that the amount to be raised by taxation is $50,000. Now if property worth $2,500,000 must pay $50,000 in taxes, property worth one dollar must pay two cents in taxes. Every man in the town, therefore, must pay two cents in taxes for every dollar's worth of property he owns. This two cents, or 2%, or .02 is called the rate of taxation.

You now see why your father's tax bill is $33.50.

The Collection of Taxes.—After the tax bills are made out, the Tax Collector collects the taxes from the owners of property and turns it over to the treasury of the town government. The Town Treasurer sends to the County Treasurer the share that belongs to the county, and to the State Treasurer the share that belongs to the State, and retains what is left for the expenses of the town government.

When a man refuses or neglects to pay his tax, the law will compel him to pay. The Tax Collector must collect the taxes, even if he is obliged to sell the property

to get them. When land is sold for taxes, the owner may regain the land by paying to the purchaser within a specified time the amount of the taxes with interest.

QUESTIONS AND EXERCISES

1. When a property owner thinks his property has been assessed too high, he may complain to the Assessors, and if these officers think his complaint is just, they will reduce the assessment. Suppose the owner thinks his property has been assessed too low; should he go to the Assessors and request them to make the assessment larger? If a man should send you a bill for three dollars when you know you owe him five dollars, would you call his attention to the mistake? Should we be as honest with the government as we are with our neighbors?

2. How is the money for the support of your school raised? Who is the largest taxpayer in your school district? Does he get more benefit from the government than any other man in the district?

3. Name some of the returns taxpayers get for the money they pay to the government.

4. Is wheat in a barn real property or personal property?

5. What is the tax rate in your town? In your county? In your State?

6. Name the kinds of property in your State that are exempt from taxation. (Examine your State constitution.)