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Maryland a law was passed this year imposing a tax of one cent a gallon on gasoline. I hope that some note will be taken of that in that paper.

Now, on the valuation of automobiles, we have had quite a good deal of experience with that in our state; particularly in the city of Baltimore. Years ago we hit upon a plan of taking the list price and using an arbitrary percentage for the first year, and alsɔ a percentage for the next year. We took two-thirds of the cost price the first year, three-fifths for the second year, one-half for the third year, and after that it was a question of proof. Usually it remained at one-half, until the parties came in and showed that that was an improper standard. The same rule was applied to usea cars. It did not matter how many hands a car might have passed through; it was a question of the age of the car and not the length of ownership by any particular person, so that if I bought a used car, which was in its second year, I came in the sixty per cent bracket.

This question of imposing an automobile license tax in lieu of a property tax, which of course would mean an absolute certainty in the collection of the tax, is not novel or untried, and I think it would be interesting to hear from Mr. Law of New York, whose commission administers the automobile tax law. Under the New York law that tax is imposed and the tax is apportioned in part back to the localities.

WALTER W. Law of New York: We have just a license fee in New York, which brings in between twelve and thirteen million dollars. The tax is administered by the tax commission. One quarter of the receipts go to the county in which the owner is domiciled. The tax is distributed by the tax commission and paid to the county treasurers. It is not enough. We have about one million machines in the state; that means between twelve and thirteen dollars a machine. Some of us believe that the fairest tax for an automobile, supplementing a license fee, which I think should. always be imposed, is a gasoline tax.

There are several very obvious reasons for that. If you have a machine in storage, that machine is paying its license tax, but does not pay any gasoline tax. Then again, I thoroughly believe, as Mr. Carlstrom says, that we have a very unequal situation as between the railways and the trolley lines, who are paying taxes on their right-of-way, and the Ford trucks and the jitney lines, which are competing with them; using the right-of-way that is maintained. by the public, towards the expense of which the railroads and trolley companies contribute. It is not fair, and a gasoline tax would be one step in the direction of equalizing that present inequality.

We have figured it out pretty carefully, and believe that a cent a gallon tax would bring in about $450,000 a year in our state. Of course, it is not necessary to restrict it to one cent. If the conditions are such that it is thought wise, it can be made more than that. Then, that tax bears more heavily on the pleasure machine that scorches, also the very heavy pleasure cars will pay more than the Ford; and of course the heavy trucks and jitneys will pay in proportion.

There is another point, referred to by the gentleman from Montana; that the visitor who comes through your state, and whose domestic license you recognize, would contribute something towards the upkeep of the roads which he enjoys; on the other hand, when you visit another state, you leave something in the public till, as a mark of gratitude for the hospitality which you have received from it, which is no more than fair.

JOHN E. BRINDLEY of Iowa: Pardon me for rising again, but I have a question. Are there any states that use the gasoline tax for any purpose other than for the benefit of the public highway? Is it used for the general fund in any state?

MR. LAW: I made a slip of the tongue. I said that that figure of a cent a gallon in New York would bring in about $450,000. I should have said four and one-half million dollars.

C. J. BUELL: May I ask Mr. Law a question. Would your one cent a gallon apply on all gasoline sold in the state?

MR. LAW: Yes, sir, for any purpose whatever. That was our plan. Of course the farmers of New York use a large amount of gasoline on their farms, which is used in machinery that has nothing to do with the highways whatever. There is also a large amount of gasoline used in gasoline engines in industry that has nothing to do with the highways. The farmer also uses an automobile on the highway, but it is a very different proposition to the farmer from what it is to the ordinary pleasure automobile. The farmer's automobile, when he uses it on the highways, is being used in his business as a farmer mostly, and not for pleasure purposes. He takes his machine and goes to town on business and not for pleasure. Those are questions which you would have to work out in some way which enter into the proper gasoline tax.

The point is a very good one and we have considered very carefully the amount that would be contributed by farmers, and tractor engines are of course an element there. They would be propɔrtionally a small element; I have forgotten the figures, but we made an estimate of that item. We figure, however, that while there is some reason for omitting that item, and some reason for omitting the item of gasoline used in the arts, that is, in tailor shops and so

on, the danger of inaccuracy and the difficulty of administrationbecause that gasoline is bought from the same pumps as the other— the difficulty of keeping an accurate track of the thing would more than offset the inequality that would result in taxing the whole business.

MR. LESER: I am not surprised at Mr. Law, well-dressed as he is, referring to tailor shops as an art, but I am surprised at his assumption that the farmer never goes on the roads for pleasure and that the city man never uses the roads for business.

MR. LAW: I think the answer to that is obvious.

O. D. FOSTER of Kansas: I very much dislike to see any policy adopted that would discourage people from riding in automobiles. In Kansas we have no gasoline tax. Our automobiles are taxed as personal property, and in addition to that we have a license tax, a minimum license fee of $8, and graduated fees, according to the weight and horsepower of the car, running up, I believe, to about $22. The tax collected on the assessment of the automobile as personal property goes into the general fund, like all other taxes. The license tax is divided into three parts; fifty cents goes to the state, for the license tag, $4.50 to the road drag fund, and the remainder to the state aid road fund. All of the license tax, except that fifty cents that goes to pay for the license tag, goes into two separate funds and is expended entirely on the roads of Kansas. The law pertaining to the license fee is administered by the secretary of state. The tax is apportioned back to the district-county and township-where the automobile is used. Of course, our road problems in Kansas are not so complicated as they are in some other states, our state being fairly level, and a good portion of it being dry, where dirt roads are considered good enough, if they are properly dragged. The law has worked very nicely in Kansas. As far as I know, there is no agitation for a gasoline tax, and I don't anticipate that one will be enacted very soon. I am not prepared with definite figures as to just how much money we raise each year and put into our two separate road funds, but it is a considerable amount, and in the western part of our state, where I live, it is ample to take care of all of our road work.

CHAIRMAN LORD: If there is nothing more to be said about gasoline taxes, we might take up the growth of exemptions or the American school tax problem. We have eight minutes we might devote to the subject, if anyone has anything to offer; first, the growth of exemptions. It is a pretty vital question.

H. C. MCKENZIE: There is one word I should like to say on the question of the American school tax problem, and that is the relative service that the pupils who live in the country get in the way

of schools, as compared with the service rendered to the children in the city. In the state where I live the rate of school tax in the country district is about as high as it is in the larger cities. In the cities they have not only schools up to the eighth grade, but high schools, and there is even a demand now that the state should pay the cost of putting the pupils through college, or through a university. In the country, if we get as much as the eighth grade, we think we are very fortunate. The country schools, as a rule, in the state of New York, are in a very unsatisfactory condition. We have had in our state, during the last two years, a committee which has been studying that question and which has recently rendered a report, and one of the things that that report contains is a recommendation that our school laws be so changed that the appropriation of state moneys be based not on the amount of taxable property in the school district, but on several other factors; first, that the school district be itself compelled to pay a reasonable amount of school taxes, and that in addition the moneys from the state be apportioned in inverse proportion to the amount of taxable property in the district. That is going to help out in several ways. Another thing that the committee has proposed is that special allowances be made to teachers having special qualifications, who will go into the rural districts and stay there and teach. The proposition submitted by the committee was that each teacher who has such qualifications, shall receive from the state an additional grant of $20 per month salary. These things are going to help the rural schools. It is the opinion of the committee that failure to keep up the average intelligence of the community and the average efficiency of our rural schools, will constitute one of the greatest menaces of our American republic. Always heretofore the rural population has been the backbone of our country, and if we allow the rural intelligence to degenerate, our whole country will degenerate in proportion.

MR. LESER: There is a better device to encourage the efficient assessment of real estate. Suppose it were the rule to appropriate school moneys in inverse ratio to assessable value.

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MR. BUELL: I don't know whether the gentlemen present would care to have pointed out a few of the very important exemptions from taxation which we enjoy in Minnesota, but possibly it might be enlightening. Up to the present time, for instance, the people who own mineral lands within the state, nearly all of them, or a large number being non-residents, have been absolutely exempted from any taxation upon a net clean-up annually of from sixty to eighty millions of dollars, out of which they have paid nothing whatever to the state. Of course, they paid to the federal government but not to Minnesota. A bill passed at the last session will

probably take about four millions out of that exemption and put it into the state treasury, but it leaves a pretty large exemption yet. The mining royalties in Minnesota, if I am correctly informed, amount in normal years to something like $16,000,000 —if I am wrong, Mr. Lord will correct me, and if he does not correct me, I shall assume I am pretty near right. I shall have to confess that I cannot tell you exactly how much they are and I hesitate to make a statement of it, without knowing definitely; I haven't the figures in mind.

CHAIRMAN LORD: Probably $16,000,000 a year is a conservative


MR. BUELL: That is in normal times. Out of that the state has never yet received a cent. The royalty factor has thus far gotten away absolutely, without paying a cent of tax to the state or any locality. I reckon the next senate is going to act on that propɔsition, because most of the senators who voted against it are not going back. Then there are certain other exemptions. Here in the city it happens that the people who own the land under this hotel are collecting my recollection is something like $32,000 a year. Maybe I am mistaken about that, but it is somewhere around there. This is net ground rental, upon which they pay neither the city of Minneapolis nor the state a cent of tax. The people who own the Glass block at Nicolet and Sixth are receiving pretty close to $240,000 a year net ground rental, upon which they don't pay the state a cent of tax, or the city of Minneapolis, so they get away with $240,000 which is absolutely exempt from taxation of any kind. Of course, if we had an income tax we might get a little out of that-probably we should. If we had the New York law relating to taxation of ground rents, which we tried to pass at the last session, we should get a little of it. That bill will be introduced again at the next session and may pass.

The Plymouth building is in the same fix; gathering in the unearned increment and paying not a cent of tax. It is the same way with a large part of our downtown valuable business property, both in Minneapolis and St. Paul. That net ground rental does not pay a cent of taxes to the municipality or the state; that is a clean exemption.

Those are some of the exemptions that have been bothering me. I confess that they look to me bigger than some of the little picayune exemptions we have that amount to $150 or $200, or something of that sort.

CHAIRMAN LORD: Gentlemen of the conference: The hour has arrived when, in pursuance to the resolution offered by Mr. Tobin of New York, the conference will finally adjourn.

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