152 RIGHT TO OWN PROPERTY AND TAXATION. prevent the shifting of the burden on to the shoulders of productive labor. "Fifth-Prohibition of the granting of further franchises by municipalities, except by direct vote of the people of the territory affected. "Sixth-Submission of a constitutional amendment to put all corporate taxes upon the same basis as to appropriation as those raised by direct levy; except that the corporate taxes now paid into the primary school fund shall be so paid. "Seventh-Faithful, impartial use of present means to secure uniformity of local taxation." THE LAW CANNOT PROTECT THE RIGHT TO OWN PROPERTY AGAINST THE POWER OF TAXATION. No property owner can legally hold what he has legally acquired against the power of taxation legally exercised. The county court of Cook County, Illinois, rendered the decision following, August 1, 1900: "Except in the case of fraudulent assessment or evident exceeded jurisdiction by the board of assessors or the board of review, the County Court will not interfere to stay the collection of taxes." INCREASING ASSESSMENTS. The state tax commission of Michigan concluded its labors in Jackson, July 26, 1900. Seventy-three corporations and individuals had their assessments RIGHT TO OWN PROPERTY AND TAXATION. 153 under fire during the two days' session. Of this number only nine escaped without an increase. Prominent among these increases are the following: Jackson Gas Company, from $35,000 to $190,000. Jackson Electric Light Company, from $19,950 to $75,000. Jackson City Railway Company, from $22,000 to $75,000. P. B. Loomis, from $56,000 to $146,000. An increase was made all along the line from one-tenth to twenty fold. The total increase amounts to $948,725. This is on personal property. Some twenty of the concerns whose assessments have been raised have retained counsel and the validity of the proceedings will be tested. The main contention will be the claim that, under the law, bona fide indebtedness may be deducted from not only taxation credits, but from the value of personal property. The commission claims to be abundantly fortified in its position that debts cannot be deducted from credits. The above cases show some interesting possibilities of the exercise of the power of taxation. If the debtincurring power of a municipality is fixed by law at 10 per cent of the value of all property assessed for taxation, an increase of $1,000,000 in valuation increases the debt limit by $100,000. The property owner is first fined by having the valuation of his property increased and then the public mortgage on his property may be increased by 10 per cent of the 154 GOLDEN RULE OF TAXATION. increased valuation. He must pay a tax upon the increased valuation and the increased debt authorized on account of the increased valuation. Business men will show greater sagacity by studying taxation problems for themselves and taking security against unjust taxation by the enactment of laws prohibiting taxation for unnecessary purposes; taxation to provide funds to cover unnecessary deficits and waste, than by contesting assessments. Retaining counsel is necessary under existing conditions. At the same time teachers of correct principles should be retained to change conditions in the direction of greater certainty and justice. THE GOLDEN RULE OF TAXATION. The letter by Enoch Ensley to the governor of Tennessee on "The Subject of Taxation," should be read by every taxpayer in this country. Written in 1871, as the result of independent thought, by a farmer whose interests were wholly in land, and the products secured by its cultivation, we find in it the true philosophy of taxation, stated in clear and simple language, which none who read can misunderstand. If any taxpayer wishes to know how far from correct the system of taxation of his state is, let him read this article and compare the conditions stated in it as the requirements of correct taxation system, with the conditions enforced by the local and state governments to which he pays taxes and he will know. GOLDEN RULE OF TAXATION. * * * 155 When taxes are properly levied and governments are efficiently administered, taxation will not be a burden; it will be a benefit. The money invested in government, by taxes paid, ought to be as productive as the capital invested in any business. When this stage of ideal development is reached the taxation question will be settled. Mr. Lawson Purdy, in his introduction to Mr. Ensley's letter, very forcibly and correctly says: "There is no reason why different principles should be advanced to justify payments to the state from those who justify payments in business dealings between man and man. Each taxpayer should be called on for the full equivalent of the pecuniary benefits he receives from the state-no more, no less." When every taxpayer receives an equivalent for the tax paid, taxation is not a burden. But more than this will be accomplished by causing taxation systems to conform to the principles laid down by Mr. Ensley. The state will confer benefits of greater value than their cost. Taxpayers will receive more than an equivalent for the taxes they pay. The administration of governments should contribute to the prosperity of the people, as well as their individual industries. 156 UNEARNED INCREMENTS. UNEARNED INCREMENTS. Real estate owners do not always reap as rich a harvest from unearned increments as has been popularly supposed. The assessments they pay for public improvements, in addition to their portion of taxation for local and state public purposes, are usually lost sight of by those who compare the value of a piece of real estate-say twenty years ago— and now. To ascertain the value of an unearned increment, the value of the property at a given time must be taken as a basis for calculation. To this value there must be added all sums paid as special assessments, general taxes and interest upon the full original value. These sums must be added and computed annually. The difference between the amount so obtained and present value may be taken to represent the unearned increment. When the value of real estate is dealt with in this way there will be many surprises to see that unearned increment has entirely disappeared. This result may cause a different attitude on the part of many toward real estate owners when questions of public improvements are being considered. |