646





RECORD   AND   GUIDE





November 18, 1922





the firing of steam boilers and small-house furnaces.
Reserve stocks are being accumulated slowly and are
still far below normal for this time of the year. Sub¬
stitutes for coal must be used whenever and wherever
possible, especially as the production of anthracite can¬
not possibly amount to more than 60 per cent, of the
usual annual output. Soft coal, coke and wood to the
extent of twenty-five per cent, should be mixed in with
anthracite if suffering is to be avoided when cold
weather sets in.

These precautions are the physical reminders of a
fight that was waged to supersede the law of supply
and demand by the dictates of minorities not well in¬
formed and certainly not backed up by public opinion
generally.

The admirable way in which the various public offi¬
cials and the business men who have co-operated with
them have worked to get the country out of the
threatening position into which the strikes had brought
it should indicate to those who would make over the
government into a gigantic community work-shop that
common   sense,   tried   business   methods   and   public





opinion formed by widespread publicity still can be re¬
lied on to function properly, even in emergencies so
critical as that which was brought about by the strikes
of last summer. Exercising common sense and business
methods, wise public officials and men in commercial life
have pulled the country out of the hole into which
greedy labor leaders and uncompromising coal operators
thrust it.

Politics was not allowed to enter into the working out
of a sane and highly satisfactory plan for getting coal
distributed before severe weather made the task doubly
hard. A disagreeable and dangerous situation has been
overcome by the exercise of the commonest kind of
business sense, and it ought to be possible for these
same officials and merchants, having the further aid of
the information now being collected by the President's
Fact Finding Commission, to draw up and put into
operation a plan for the mining and distribution of
coal which will not only avert the strike already
threatened for next Spring, but which will assure the
country permanent relief from this annual attack on its
pocketbook, its good nature and its well-being.





State Collects $124,000,000 Taxes Other Than Real Estate

By WALTER W. LAW, JR.
President, New York  State Tax Commission





FOR fifty years the main problem in taxation has been to
distribute an equitable share of the burden to intangible
personal property and thus relieve the disproportionate
share borne by real estate. Perhaps more progress has been
made in this direction in the State of New York than in any
other  state of the  Union.

No taxes are welcome for their own sakes. But when it
is realized that more than $50,000,000 is collected from corpora¬
tions, $30,000,000 from personal incomes, $15,000,000 from in¬
heritances, $15,000,000 from automobiles and $14,000,000 from
mortgages and transfers of stock, and that all these sums would
otherwise have to be raised as an additional burden upon real
estate, it becomes obvious that we have made some progress
toward equalizing the burden.

Equity means equality. Equality in taxation means an equal
proportionate burden. The constant effort of wise statesman¬
ship is to distribute the burden of taxation fairly and propor¬
tionately upon the various forms of wealth and the holders
thereof excepting only in the case of exemptions allowed by
law  based  on  well-considered   reasons.

The two things that are of fundamental importance in taxa¬
tion are (first) the amount of money raised by the taxing au¬
thority, and (second) the distribution of the tax burden among
the various taxpayers, because even though the tax levied
may be a very moderate one if it is unequally distributed the
burden may fall upon the persons of the community who
are least able to bear it and thus become more onerous and
cause more suffering than even a larger levy which is distrib¬
uted according to the ability of the taxpayers to respond.

As to the first point, it must be remembered that government
orders its finances differently from individuals. Mr. House¬
holder first determines the amount of his income and then
fixes his rent and other living expenses to come within the
amount that he can spare. Government does very largely
the opposite. It first determines the amount of its expenditures
and then looks around for sources of income and fixes the
rate of tax levied sufficiently high to pay its anticipated
expenditures. Consequently the control of the income is exer¬
cised when the amount of expenditures is fixed.





In 1910 the taxes paid in the State of New York amounted
to an average payment of $35 per capita. By 1920 tha tax
per capita had grown to nearly $95. The total increase amounted
to  170 per cent.

Where waste and extravagance have occurred there is, of
course, no excuse that should be accepted. One fruitful
source of high taxes in some localities is the heritage from an
overfree use of municipal credit, that is, of issuing long (erm
bonds to pay for improvements and services which will not
outlast the life of the bonds. Some mayors have been allured
by the idea of having the credit of constructing municipal im¬
provements during their terms of office, the cost of which
will be borne by subsequent administrations, and it has been
calculated that for every dollar realized from the sale of long
term municipal bonds it will ultimately cost the taxpayers in
principal and  interest  about $3.

Any city that will keep as closely as it can to the pay-as-
you-go policy will ultimately be in better circumstances than
the city that too freely resorts to the use of her credit even
though the former has to wait longer to secure the desired
improvements.

It should be borne in mind that the money levied by taxa¬
tion is taken from the citizens by soverign authority and is
withdrawn from the channels of business, when probably if
it was left with the individual it would find its way into in¬
vestment in railroads, factories or other industrial use, by
which it would give employment to labor and increase the
total wealth of the community.

We are all taxpayers, whether we realize it or not. Some
of us pay taxes directly to the tax gatherer and some do not,
but those who do are very alert and astute in passing on their
taxes to the ultimate consumer. The landlord can do thii by
including it in the rent he charges the tenant; the factory owner
can recoup himself for his taxes by adding a little to the seUing
price of his merchandise. Indeed, no small part of the high
cost of living today is explained in the rise of the per capita
tax from $35 to $94 in the brief interval that has elapsed
between 1910 and 1920. The cost of living aflfects labor, the
cost of labor necessarily rises as a result of the high cost of
living and the high cost of labor in turn increases still more
the cost of living.