Democratic Sentinel, Volume 15, Number 25, Rensselaer, Jasper County, 10 July 1891 — A BLESSING TO INDIANA. [ARTICLE]

A BLESSING TO INDIANA.

The New Tax A Wise Measure. History of Its Enactment—lts Purposes and Provisions—Address by Representative Beasley Before the Democratic Editors. At the midsummer meeting of the Indiana democratic editorial association held at Lake Maxinkaokee recently the Hon. : John T. Beasley, representative from Sullivan county, delivered, by invitation, an address upon the new tax law. The address" which is an able and convincing argument, was as follows: Mr. President and Gentlemen of the Association— When the general assembly of 1891 convened on the Bth day of January, that body found itself confronted with a state debt approximating nine million dollars, with an annual expenditure of two million dollars and a total ordinary annual revenue of one and one-half million dollars, with an empty treasury, and with a tax and revenue system eonfessedly imperfect and inefficient. The governor had oalled especial attention to these matters in his biennial message to the general assembly; they had all been conspicuously prominent in the campaign preceding; the press of the state had oalled attention to them, and the people were anxious for a revision of onr tax and revenue laws.

How the Law Was Made. The legislature, in obedience to the demands of the people and the exigenc es of the occasion, addressed itself to the enactment of a new tax law, whioh would embrace some of the previsions whioh our new an I progressive civilization and conditions seemed to render necessary,— In order to accomplish this j nrpose some of the best men in the general assembly were chosen on the committee on ways and means in the house and the committee on finance in the senate respectively. The committee on finance in the senate consisted of Senators! Magee, Hayden, Byrd, Howard, Akin,|Hobson aud Clemans, the first five demoorats and the last two republicans. The committee on ways and means in the house consisted of Representatives Oppenheim, Curtis, Harrell, Nolan, Work and Beasley, democrats, and Representatives Hess, Claypool and Haggard, republicans, and confessedly among the strongest men the republicans hau in that body. As soon as these committees were appointed an arrangement was made whereby they were to act jointly in the preparation of a new tax law. To that end joint meetings were had of the two committees to which all the members of both committees were invited irrespective of politics. It was soon discovered that the work of preparing a bill oould better be accomplished with fewer members present, and with consequent less confusion. It was therefore mutually agreed that a sub-committee from each of the two committees named, should be appointed, and these sub-committees were to engage in the actual preparation of the bill. On these sub-committees the republicans had a representation as well as the democrats, and the work of preparing a bill proceeded without any reference to politics or political effect. The work progressed slowly as it involved a great deal of olerical labor and a vast amount of study and comparison of existing laws in this and other states, oovering the same Bubjeot. At last, however, when the sub-committees had the bill completed and ready for introduction, the same was submitted to a general meeting of the full committees before mentioned, and wa- fully and minutely explained and disoussed. The bill was acceptable to all the members of both committees, save that there was some donbt expressed as to the provision requiring railroad corporations to pay all their taxes to the state and be relieved of local taxes, and relieving all other property of the state from the payment of state taxes entirely. At this juncture and upon this proposition the democratic members learned, for the first time, that there w s to be any politics in the legislation of the session concerning the question of taxation. Led on by the Indianapolis Journal and the railroad corporation lobbyists, the republican leaders in the house suddenly discovered that that provision of the law was probably unconstitutional and would operate inequitably upon different parts of the state. They thereupon set about to defeat it, which thsvdid, by the aid of some members of our own party, who were compelled to take that position by the people of their respective localities, where, they were led to believe, such a law would ruinously affect their local taxation on other property. After the defeat of that proposition of the law, which we then believed and yet believe to have bees the most valuable provision in it, there remained no other alternative and in lieu es the provision just mentioned, a provision was enacred by a separate bill, creating a levy of 6 cents on the SIOO for the special purpose of raising sufficient funds to meet the constantly increasing expenses of our growing benevolent institutions. As the law passed, however, it was practically without opposition and particularly is it tru , that there was no republican opposition to a single feature of the law which our republican friends have so industriously and insincerely condemned and criticised since the law went into operation. The Alleged Objections. We will briefly notice these alleged objectionable features- of the law and see, if we can, what there is in the criticism of those features and the source from which these criticisms emanate. They are: (a) That the levy of taxes for state purposes was needlessly, and therefore wrongfully, increased. <b> That the law requires all property to be assessed for taxation at its true cash value, and (c) That the law discriminates in its provisions in favor of corporations and the wealthy, and against the farmers, laborers, and poorer classes of people. The Taxation of Corporations. Our republican friends are loud in their assertions that this law reduces the taxes on sleeping car companies 80 per oent.;on t.lephone companies. 75 per cent.; pntelegraph companies, 50 percent.; and on express companies, 50 per cent. An examination of the act of March 0, 1891, and a comparison of the new law

wuh former laws, discloses that the tax on express companies prior to the act of 1889 was “1 on each SIOO of such receipts,” to be ascertained by an annual statement by such companies to the auditor of state, “showing the entire reoeipt of eaoh company doing business in |hiß state for the year then preceding the Ist day of April” —allowing deductions to be made from the gross reoeipta for expenses paid for transporting freight, for wages to employes, and money paid for tangible property; all tangible property of the corporation to be asseessed as other property. (R. S., 1881, seo. 6,352.) The act of 1891 on this snbjeot is a literal oopy of the aot of March 29, 1881, supra. (See sec. 68 of aot approved March 6, 1891.) The tax on telegraph companies prior to the act of 1889 was “one dollar on each one hundred dollars of suoh receipts" to be ascertained as in case of express companies, and their tangible property to be assessed and taxed as other property.— (R. S. 1881, sec. 6,353.) The act of Maroh 6, 1891, on this subject is a literal oopy of the aot of March 29, 1881, on the same subjeot. (See seo. 79, aot of March 6, 1891.) The same thing iB true, barring some slight change of phraseology of sees. 70 and 71 of the act of March 6, 1891, corresponding to secs. 6,345 and 6,355, R. providing the manner and rate of taxing telephone and sleeping car companies.— But our republican friends say, admitting all this to be true, yet there waß a great reduction on these corporations as compared with the acts of 1889, passed by a reform democratic legislature. If our critics will take time to critioally examine the acts of 1889 on these subjeots, they will discover that:

(a) As to te egreph companies, the aot of 1«89 omitted the following provision contained in the act of 1891, viz: ’’Provided that nothing herein contained shall release said telegraph oompany from the assessment and taxation of its tangible property in this state, in the manner that other tangible property is taxed and assessed.” In lieu of this provision one less speoifio and satisfactory was incorporated. A further distinction is notioed in that the act of 1889 limited the assessment on gross receipts to business which “originated and terminated in this state.” Acts 1889, p. 389.) (b) As to telephone companies it will be noted that the act of 1889 limited the assessment on gross receipts to business which “originated and terminated in this state.” (Aots 1889, p. 397.) (o) As to sleeping oar companies it will be noted that the aot of 1889 limits the assessment of gross receipts to business “originating and terminating in this state." (Aots 1889, p. 398.) (d) As to express companies it will bo not ed that the act of 1889 omits the following provision of the act of 1891, viz: “And provided further that nothing herein contained shall release such exp ess company from the assessment and taxation of its tangiblh property in the manner that other tangible property is assessed and taxed;” and in lieu thereof appeared a provision less speoifio and satisfactory, and further, the act of 1889 lim its the assessment of the gross receipts of such companies to business “originating and terminating in this state." (Acts 1889, p, 272.)

A Queer Bit of History. In addition to the substantial differences between the aots of 1889 and 1891 concerning the|taxation of express, telegraph, sleeping oar and telephone companies, if these matters are to be treated from a purely political standpoint, simple justice requires that the whole truth Concerning the origin, enactment and subsequent operation of these laws shonld be told.— When the whole truth is known, the attitude and conduct of the demobratio party as affecting those laws is infinitely more consistent and oreditable than to at of our republican accusers. The fact is that those laws were prepared by end under the direction of the then republican attorneygeneral and chairman of the republican oommittee. They were not only prepared by t is “boss” of the re publican party, but were distributed by him to “trusted men” of hiß own political party to claim their authorship in the general issembly. (See H. R. No. 175, by Representative Craynor, concerning taxation of express companies; H. R. Mo. 178, by Representative Hessler, concerning 85, introduced by ienator*Olemans, concerning taxation of telephone companies; S. R. Nos. 81 and 83, by Senator Bozeman, concerning the taxation of sleeping car and telgraph companies respectively.) In the closing hours of that busy session, in the belief that these bills were what they purported to be, honest measures to increase the taxes of those corporations, they were almqst u animously passed by that democratic body. But to the surprise of those who had taken a hand in the passage of these laws, the time had hardly arrived for them to bear fruit in the way of increased taxes from the corporations affected thereby when this same republican attorney-geLeral, who had procured the passage of these laws, in his zeal (?) to see the burdens of taxation bear equally upon those rieh corporations as upon tne poorer citizens, discovered that these laws wore unconstitutional; and by and with the advice and consent of Governor Hovey allowed those corporations to pay taxes according to their own weet will.

Tbce Cash Value. So far as the criticism of that feature of the new law which requires all property to Le assessed for taxation at its tine cash value is concerned, it is a sufficient answer to say that substantially the same provision has been in foroe in this state ever since it had an existence. Indeed, it is the recognized basis for valuation of prt perty for taxation in every state in the union. Th merit of the new law on that subject, however, lies in the fact that it contains provisions which will insure that its requirements are observed. But it is argued by the euemies of this law that this feature of the law will cause an appreciation in values for tax purposes of 100 per cent, or upward, and that, therefore, our taxesfwill be increased in the same proportic n. Letus see how far these assertions are borne out by the facts. The amount of taxes required to meet the public demands depend, vary largely, indeed almost exclusively, upon local officers, boards of county commissioners, township trustees, road and municipal officers. The rate of taxation is determined by two things, viz: amount of money ap-

propriated and expended by the local offl. cers, and the assessed valuation of property upon whioh taxes are to be levied to raise the necessary public, funds to meet publio expenditures. The amount of money necessary to be raised by taxation being once fixed, then the rate of taxation is determined solely by the assessed valuation of property for taxation. If the valuation of property for taxation be increased the rate of taxation it follows, as a matter of course, may be decreased in the same proportion and we have the same income from taxation. There are a few fundamental principles of taxation whioh ought to be observed in framing all tax or revenue laws. Briefly these may be stated as equality, uniformity, universality, certainty. It was with a view to making the burdens of taxation in this state bear with equality and uniformity upon all

property that the provisions were incorporated into the now tax law requiring all property to be assessed at its true cash value. These desirable features of taxa tion oould bo accomplished in no other way. It is amatterof common knowledge that under our former tax laws taxes have not been equal and uniform. There have been unfair discrepancies as between individuate, different townships in the same county, and as between the various counties in the state. Particularly is this true as to the state taxes. There has always been a “race of diligenoe” to see who of us could most nearly esoape taxation. To do this, there was always a strong incentive for undervaluation. The result is well known. In some oounties and townships property was assessed atitsaotual value, or nearly so. In others it ranged down to, 75 per cent., 50 per cent., and even less than half its actual value. It necessarily followed that in plaoe of equality and uniformity, we had inequalily and injustioe on every hand. The Law Benefits the Poor.

That the requirement of the law that all property shall be assessed at its true casu value is in the interest of the poor as against the rioh, both persons and corporations, is easily demonstrable. To illustrate: Suppose farmer “A” was possessed of property at the actual value of SIO,OOO. But under former appraisements it was taxed at $5,000, half ns aatual value. 1 armer “A” thus escaped taxation on $5,000. Suppose banker ”B” was possessed of property of the aotual value of SIOO,OOO. But under former appraisements it was taxed at $50,000, half its actual value. Banker “B” under the same rule, thus esoaped taxation on $50,000. Under the new law we will suppose that farmer A" and banker *B ,# are eaoh re* quired to list their property at its true cash value. The “raise” on banker “B” will thus subject to taxation enough property, heretofore escaping taxation, to pay all the taxes, state and looal, of five farmers, with as much property as “A.” Or, to put it another way; the “ralße” on banker B” under tho new law will fu/n----iHh enough additional property, subjeot to local taxes, to pay an amount of local taxes equal to the increased taxes hyreason of the additional 6 cents, state levy, on the property of probably one hundred farmers, eaoh possessed of as muoh taxable property as “A.”

The State Levy. So far aB the complaints made by onr republican friends against the increase of the state levy are concerned it oertainly oomes with poor grace for that party to complain of a tax of 6 cents on eaoh SIOO of taxable property, levied for the express purpose of earing for the afflioted and unfortunate portion of our people who are compelled to find a habitation in the various benevolent in titutionsef ( ur state. It is, according to republican claims, gross extravagance, incomperence, partisanship run mad, for a democratic legislature to levy a state tax of 6 cents on eaoh SIOO of taxable property owned by these malcontents, to support the blind, the deaf and dumb, the feeble minded, the soldiers’ orphans and the insane. But it is the ytry acme of statesmanship and patriotism .for a republican congress to appropriftt,ef * r frdiauato pay $33,000,000 or nearly $4 on the hundred of taxable property in this state, according to former assessments, in order that enormous bounties may be granted to the rieh manufacturing establishments and vast subsidies voted to the great railroad and steamship companies of tbs country. Have our republican friends never stopped TO REFLECT THAT INDIANA’S PROPORTION OF THE APPROPRIATIONS OF LAST CONGRESS WILL COST THE TAX-PAYEBS OF THE STATE NEARLY SEVENTY T IME AS MUCH AS THE INCBEASE OF THE STATE LEVY BY THE LAST LBGISLATUBE? * Acting upon the recommendation of Governor Hovey in his message to the general assembly the state levy was increased, not to 25 cents, as he recommended, but to 18 oents on the SIOO. As taxation is relative in its burdens, it may be interesting to compare our state levy with our sister states. The Levy in Otheb States. Tho following table, basedupon reports for the year 1887, will give the rate in the various states:

Alabama, 55 Mississippi. 35 Arkansas, 40 Missouri, 40 California, 56 Nebraska, 81$ Colorado, 55 Nevada, 90 Connecticut, 12i N. Hampshire 19 Delaware, , 0 New Jersey, ;29 9-16 'Florida, / 40 New York, 27 Georgia, 35 N. Carolina, 37i Illinois, 35 Ohio, 29 “Indiana, 18 Oregon, 31 lowa, 25 Pennsylvania 30 Kansas, 41 R. Island, 12 Kentucky, 474 8. Carolina, 424 Louisiana, 60 Tennessee, 30 Maine, 274 Texas, 374 Maryland, 17$ Vermont, 10 Massachusetts, Virginia, 40 Michigan, 12$ W, Virginia, 35 Minnesota, 13 Wisconsin, 15$

[S«e Ely on Taxation in Amerioan states and cities, p. 496.] It m worthy of note that only seven states in the union have lower state tax levies than our own, as now fixed, and that the republican states of Illinois and Ohio, immediately adjoining us on ettber side, have a rate of 36 and 29, respectively, compared with our 18 cents. A Repubijoan Bequest. Xt was the misfortune of the democrat* io party whon it last came into power in this state to inherit hn interest beariag debt of 55,000,003, nearly, and ntterly inadequate facilities in the way of educational, benevo ent, penal and reformatory institutions, adequatelyeqaii.psu} and wel; supplied wit^efficient governing offi.

o«rB, and a state tax levy lower than all other states in the union, save seven. But, it is agreed, that even if the six cents additional levy was neoessary, and was wisely ereated. there should have been a reduction or repeal of the state school levy of l(i oents. It is claimed that the appreciation in values undor the new law will produce too muoh tuition revenue, with al6 oentlevy. Let us see. Suppose that under the new law property will be increased for tazpurposes 60 per cent. This will be equivalent to a school levy of 24 cents on the basis of former assessments. We have had a law in force since June 6, 1867. (See R. S. 1881, seos. 4,469 and 4,470) authorizing school offioers to make a looal levy not exceeding 25 cents on the 5100 in addition to the 16 oent state levy, which tax is known as the local tuition tax. In those townships or sohool corporations whioh have availed themselves of this law, to its limit, they have had a sohool tax of 41 -.ents for tuition purposes, state and local. It will be found upon examination, that nearly all the townships and school corporations in the state have maintained a looal tuition levy of from 10 oents to 25 oentß, the limit. So that the average levy for tuition purpof es, heretofore existing, has been largely In excess of the highest am’t that can possibly collected under the stato levy alone, on the basis of the new appraisement. If itfis foundjupon comparison of the new appraisement with former ones that the state levy of 16 oents will raise sufficient revenue for tuition purposes without a looal levy, then it will be the duty of the looal officers to see that the looal levies are reduced or remitted entirely This oan be easily ascertained and readily adjusted.

If our republican friends assert that the tax law of 1891 discriminates in favor of corporations, we answer that it taxes their franchises, compels them to disclose and give in for taxation Ann their property, tangible or intangible, provides for county assessors and state tax commissioners, whose duty it is to oompel them to pay taxes as the poorest oitizen. And the same legislature adopted a proposed amendment to the state constitution providing for the taxation of the gross earnings of corporations. If they assert that the law requires all property to be assessed at its true cash value, we answer thatonly the tax-dodger and law-breaker is hurt thereby. If they assert that the state levy was increased 6 oents on the SIOO we asx them to point out the m*n who oomplains of paying 6 oents ou every SIOO worth of >ropi rty he owns for the support of the >enevolent institutions of the state, if, at the same time, the corporations and tax dodgers are taxed sufficiently to lower the looal tax rate to an amount equal to the 6 eont increase for state purposes. Enfobce the Law Honestly. In conclusion, gentlomen, permit me to suggest that only one thing is needed to make the new tax law popular in Indiana, and that is its honeßt enforcement according to its true intent. For this we oan only look to the democratic press of the state. The legislature has done its work. The law is now on our statute book. With its fair enforcement will oome the commendation of the people, beoause the law is right in its spirit and intent. Its aim is to secure equal and exact justice to all men. The occupation of the tax-dodger in Indiana is now gone if this law is rightfully carried out. As the sentinel on the watoh-tower gives warning of approaching danger, so it will be the duty of the demoeratio press to warn all who contemplate transgression of this law that transgression will be followed up by punishment according to its strictest ;erms. To the democratic party of Indiana is due the everlasting gratitude of all ?’ood citizens for the three groat oompanon pieoes of modem reform legislation—the new election law, the new sohool book law and the new tax law. Gold, oough, coffin is what philosophers term “a logical sequence.” One is very liable to follow the other; but by earing the cold with a;dose of Ayer’s Gherry Peotoral the cough will be stopped and the coffin not needed—just at present.