Democratic Sentinel, Volume 18, Number 34, Rensselaer, Jasper County, 7 September 1894 — INDIANA TAX REFORM. [ARTICLE]

INDIANA TAX REFORM.

Invaluable Service to the People by the Democratic Party. _ History of the Tax Law of 1891 and Its Beneficent Results. x A Barbarewa System Replaced by • tat •nd Equitable Code—Burdens BqnalIsed end Texes Proportioned »• Posseesions trasted—Former Still Complaining of Partiality In Exemptions and Favoritism to Corporations—Latter Puromt at the Expense of the People—FaoSe Md Figures In Illustration—Superiority of the Indiana Plan—Democracy's Oreat Triumph.

For many years the necessity for reform in the system of taxation was one of the most pressing questions in the state of Indiana. It was recognised that the prevailing system was unjust, vicious and oppressively unequal in its operations, but every effort for a change long proved abortive. Under the old laws prevailing in the state up to the year 1891, the corporations always managed to evade payment of their just proportion of taxation. The corporate influences appeared to be in complete control of the machinery for levying taxes, and for years, by means known only to themselves and the revenue officials, shifted almost the entire burden of taxation to the shoulders of individual property owners. While only a small per cent of the taxes were paid by corporations and railroad interests, their holdings largely exceeded the total assessed valuation of the entire state. Hundreds of thousands of individual property owners throughout the state were for years assessed at from one-third to onenaif the actual value of their possessions, while the corporations were either entirely overlooked by the local assessors and state board of equalization, or succeeded in having their aggregations of * wealth listed at one-tenth, or even onetwentieth, of its value. Nor was this all or the worst. Many rich corporations, such as the Pullman Car company, escaped taxation altogether. Though doing business in the state on a large scale, enjoying the protection of her laws and getting the benefit of her rich resources, they returned not a dollar to the treasury* in compensation. The attempts to remedy this Iniquitouefaystem long proved vain. The Republican party, though pften in power, refused to do anything. The demands of the people were unheard or unheeded. The old code, out gfsate and unjust* to the last degree, Was'allowed to remain on the statute books. Such was the situation when the Democratic party assumed control of the legislature in the winter of 1890-91. The leaders of the party had determined to make a sweeping change in the whole system of taxation and the session was largely taken up in framing and passing the new law. It was carefully studied qnd framed cm scientific principles, in accordance witn the views of the most enlightened and progressive students of political economy. Its passage was opposed at every step by the privileged corporations, backed by the Republican party. It was only after a bitter struggle that the measure finally became a law. The Republican press and speakers assailed it with utmost virulence, attacking both its principle and details, and calling upon the people to defeat the Democracy and restore the old system. In fact, opposition to this great law was made one of the cardinal Republican tenets ip 1892, and had that party been given power there is no doubt that it would have been repealed. Every device was resorted to to prejudice the people against it. The operation of the law was obstructed in every possible way, payment of taxes was resisted and suits were brought to declare the law unconstitutional. The basic principle underlying this law is that all persons shall pay taxes in proportion to their means, while none are allowed to escape, they will all be assessed equitably. The wealthiest corporation must bear its burden equally with the small farmer or householder. While according equal rights to all, special privileges will be allowed to none. How unjustly the old plan operated and the inestimable reform that has been accomplished by this great Democratic law may be judged from the single item of railroad property. The total assessments of railroad properties in the state of Indiana for the year 1890, under the old system, was $69,762,676. For 1891, after the new law came into effect, the assessment of the same properties was $161,089,169. For 1892 it was $160,696,802 and for 1898 it was $169,248,878. It will be seen that the aggregate for these three years was $480,883,844, as against $209,288,028, which would have been the assessment during these three years on the basis of 1890, showing an excess under the new law of $271,595,816. But while railroad property, being the largert item, attracts the most attention, the operation of the law worked a similar reformation proportionally in all kinds of corporate property which bad theretofore escaped taxation in whole or in part. This enlargement of the list of taxables, while greatly increasing the state's resources, also operates to relieve the smaller taxpayers of the unjust burdens put upon them by the inequitable operation of the old method. Perhaps no better way can be employed to bring into bold relief the public benefits conferred by the great Democratic reform law of 1891 than to contrast the present conditions of the two neighboring states of Indiana and Illinois. In the latter the old system still prevails, the tax law there being very similar to the one in operation here up to 1891. The state boards of equalization of the two states have been in session during the past two weeks, and the merits ana demerits of their respective laws may readily be compared. In Indiana ho complaints are heard except 1 from a few big corporations, who are begging for a lowering of assessments on account of hard timeis and bad business. The people generally are satisfied, understanding that they pow have a law that is perfectly just in its pro- 1 visions apd only peeds and fear-

less administration to secure ideal results. In Illinois the complaints are loud and deep and a demand oomee up from every quarter of the state for the passage of a tax law similar to that in Indiana. The records in Illinois show that more than $100,000,000 worth of railroad property does not pay a oent of taxes, while every acre owned by the fanner is assessed to the fullest extent. The same records show that the colossal corporations of the state, with capital stock reaching into the hundred million figures, pay taxes on but $5,863,947. It goes witnonftaying that such a condition of affairs constitutes a crime against every individual taxpayer in the state. It is wholesale robbery of the people by the trusts and corporate monopolies, aided and abetted by officials chosen by the taxpayers to secure an equitable distribution of the burdens of taxation. Farming lands throughout the state are assessed at from sl2 to SSO per acre, while a corporation like that of the Pnllman Palace Car company, having a paid-up capital of $86,000,000, owning a city In itself and possessed of assets valued at $50,000,000, is permitted to pay taxes on leas than $2,000,000, or about 4 per oent of its real value. Owners of humble homes worth from $2,000 to $5,000 are assessed al from SI,OOO to $2,500, or half their real value, while railroads owning $20,000,000 worth of property are allowed to escape on an assessed valuation of less than $1,000,000. Real estate experts estimate the value of railroad property in Chicago at $600,000,000, yet the state board of equalisation places the assessed value at less than $18,000,000 and in the entire state of Illinois at $82,000,000, although known to be worth $1,000,000,. 000. In other words, the individual taxpayer has to pay taxes on about one-fourth the real valne of his property, while the big railroad corporations escape with assessments of from one-tenth to one-twentieth of the real value of their holdings. The SBO,OOO, (XX) paid-up capital stock of Pullman’s Palace Car company is assessed at the pitiful figure of $672,846. This same company has never paid a dollar of taxes in Indiana until' the present year, which is the result of a law passed by the last Democratic legislature of Indiana. It has made millions of dollars in the state during the last 80 years without returning a single dollar in taxes. The remedy for this glaring abuse is due solely to the Democratic party. Last year the total assessed value of property in Illinois was $847,181,516, of which $7(10,887,855 was placed ok real estate and personal property, $70,531,788 on railroads, and $5,863,947 on capital stock corporations other than railroads. This tells the story of how the people pay the taxes while the corporations, which have the people by the throat, escape the bunlens of government. Precisely similar to this were the conditions prevailing in Indiana until the legislation of 1891 plucked up the abuse by tne roots, made mandatory provisions for equal and just assessmetlts and compelled all classes of property to bear tnelr fair share of the taxation. How it has operatod as to the railroads is illustrated In tliiMgures above fciven, contrasting the assessment of 1890 • with subsequent years. But it is pot simply necessary to nave a good Jaw to insure justice to the people. To the Democratic party of Indiana belongs the credit of first enacting the tax law and then enforcing it with vigorous impartiality and stern justice to all. The administration of the law was resisted by one of the most powerful combinations ever formed for such a purpose. All the railroad companies of the state united in refusing payment of taxes and in a suit to declare the law unconstitutional and void. This litigation involved more money than any other tax case ever before tried tn the. United States. How It was fought through for the state and finally won by the Democratic attorney general; how the railroads were compelled to come to time and settle their long withheld dues, are matters of recent history and form one of the proudest triumphs of the Democratic party. Valuable as was the service to the people of enacting such a law, the honest and fearless enforcement of its provisions constitute a still stronger claim for public approval and public gratitude.