Show INEQUAlITIES Q all TIES IN OUR OURI 0 UR I PRESENT TAX SYSTEM f SHOWN BY R HAMMOND The he I as as an i general O property tax of Utah bon tion constitution ion aS a'S tv w as operation before the J mJ in 10 to the thc rheas constitution con adopted adopted and ind was vas as written m- m in m Hr much same form very ery the I mI inI in which it had been operation m in w while lle so o it is Utah was as a terrItory I Utah The really fact older that than the State te of the made part of system was as I made h it our organic org law has s substantial impossible to make an any sub sub- sub sub- I ii 1 1 i bonous change ch except e through h the i lof of amending the e fe changes Consequently during ha hale hae e been made tie the Ij riat a t thirty five toe ne time tie the year ea At ur was as adopted tax tem is a fei- fei toe of ie state e and was as kee In Ith the elc stage of ment lop lop- In the state t at that tIme Al most I taken u am place re chan changes ba hale bae e our in m our mode of living in ain in andin the means ns of earning a livelihood 11 and form of wealth eal t t dur the ng u t thirty dh dhe e years but no basic ba alter alteration tica ha ba has been nn nude made e in 10 our tax ten s his our system s stem hisa of and kept ept changes pa pa-e pa a with Ith these these dc in m our economic and so- so so eni A J A- A AT at att at T me when hen the st rd of measure measure- ment measurement ofa of f fa a wealth was bias hIS n of property and md posses possessions Slone Slon has not the tax system now outlived its usefulness Today the J 1 standard of Ifa a persons person's wealth e and nut sis tasis his ability to pay taxes os ta is 13 based more his upon earnings or nom ome e eThe The perpetuation of the ofa system of a in m Utah has undoubtedly re- re resulted rc in m ini i a great many inequalities j I not to paint these m- m I mI c todo e ea here nor is it necessary to toI I do so The home bome owner the farmer real estate holder andall and all others har- har haI haring ing ha I mg ing of tangible pro property pert are areMel r 11 Mel ell awre aure aVo re tha that t they are being ta tax tax- tax taxed ed d 1 almost to the breaking point ble tremendous income and foi fOl tunes rn inthis this state go practically untaxed Tome Some S see the entire earning power ill af M their properties being taken for forthe tori the support of o government nd and o some forI I r others are even witnessing the dual Jual conflation confiscation ahon of their real es- es es-E es k 4 t de fe holdings by the tax consuming A not only tie the entire earning power but on the principal itse f 1 Doe Doe Doea our ta tax 5 system need revision Let Tet u ti exan- exan ne the basis upon which it is found founded d dand and see se whether our present system meets the require require- requirement requirement requirements ment ments of today The annual prop prop- property property property erty ta tax of the past few v years has been n abou about This is for forstate forstate forState state school county nd municipal l I Purposes In addition to this amount about is now being ral raised ed flom penal taxes The greater put part of of this re revenue comes from the gaso g sine ame tax and is used for road roid purposes r 11 The ta tax has been raised from rom levies on property and almost fill of it has ico ne ico-ne a from tangible prop prop- property property ert erty During the past sear vear ear or 1 two 10 0 Je less s thin th one and one half per cent of t ts ti s has been from irom the tax tn hon on intangible property n 52 per cent of all the gene property Properly ta es come coone frOom seal leal estate and buildings A little littlemore more than 25 per iper cent comes from mmes mines and ut utilities The remainder is levied on live stock fin and oth other r forms of tangible personal property Is 13 this situation wrong Should we c continue to raise the bulk of the revenue for the various Vanous public pur pur- pur-I pur purposes the same manner that we c weare weare poses roses are arc no nov in v doing Let Us u look 1001 deeper I and see if we can unto the problem fInd an ver as as er to this question canI I Examine the situation from fromn the of ability to pay taxes standpoint tan i of the sifter after all that is 15 one because questions in m any plan of I Is there any consIderation taxatIon I l property tax as to ones one's ability ln in a No because property ont own own- t I to pay taxable does not represent ent The sole question in m a prop prop- property property prop prop-erty determination of the tax is a erty value of the property in question questIon classes of property have haven havea True certain value which 15 det rm market vaby t a n but this capacIty by thisby their earning nor is It itis is 15 not true ti of all property I true rue of an any property at all times timp it bee ec use there ire are circumstances when property has bas no earning capa capa- capacIty capacity capacity city whatsoever er but still has bas a mar mar- market market market ket slue The sole question which the asses assessor or must decide is how much mucha I a given piece of property is worth orth on the market regardless of its past or present earning capacity Once thatis that thatIS thatis IS determined and the assessment placed on the tax tar roll the levies are applied against such valuation This brings us to the very fiery heart rt of the ta tax problem in m Utah Mr Ir John JohnC JohnC C Watson director of the depart depart- department ment m nt of taxation and statistics Ill Ill- Illinois Ill Illinois moLS Agricultural association has prepared some very significant m- m information m formation form relative to the income re- re recen re received cen ed from frem all sources in Utah and andin andin in other states of the nation nhon Ihs his figures for Utah show that during I the past few years ears the average an- an annual nual income his been about 00 per year Of this total tot Only about 25 per cent comes flom proper proper- property tv ty while the remaining 75 per centor cent centor or about i 1 lo the result of person I 1 services such su-h as wages ages salaries commissions etc I How is our tax ta system applied to I this earning capacity of approximate approximate- ly approximately We levy lew i tax x of upon property which earns only 25 per pcr cent of the thc income and we levy not one cent of one on onI I the source of income which I I ili per cent of the total In other r about income e rued med in this state pa pays no state te Or lo oral al tax ta The burden of the gener- gener genera a tax falls entirely upon that prop prop- pr property p- p erty ety wh h eh ch produces only one one fourth of all the income of the state and nd 1 which has bas only one-fourth one of the to total total total tal earning capacity In the final all taxes must be bs pa d out I of income It is of course couise po poss pons s ble bleto bleto bleto to pay taxes out of c capital as long longas longas as capital remains but the thc continuation I allon of a ta tax which every even year ear takes lakes takesI I put part of the capital and all of the m- m in income come simply means that it is only a aI I I questIon cf time until the capital IS confiscated I To i limited extent this nus process 15 going on in m Utah tOOn today On the ern a average e we are arc not taking taking- capital to Pay property tae ta but in m certain w w ar ara taking so much of the income received re from the tang be property to pay the tax bill that ht- ht littie lit little tIe tle income is 15 left after taxes es are pad the value alue alue of the property as 1 as d as a result In a afew few e extreme cases all of the income from the property has bas been absorbed bed m the tax ta bill and the pro property pert Itself has been confiscated ted in m order to pay the taxes ta levied upon it If vve me are to present an accurate picture of the situation tIon we e must look into the fie problem relative to I the taxation of property and the net netI income which come cornea from property I Tie The 70 net income WhICh has been the average return from I property in m the state each year ear dur dur- durI during during ing mg the past few years ears includes the I from intangible property s as aswell 1 well ell as from all other kinds of prop prop- property property property erty But how mu much h of this burden of 20 doe intangible proper proper- property property property ty bear Earlier in m this discussion we stated that the total revenue re- re re received ICen ed from intangible property to less th than n one and one hal per cent of the total receipts I from general property taxes ta It is 15 impossible to say just how much m- m intangible in intangible tangible property there is in m the state hut but the federal income tax returns I indicate that there is at least I worth of productive 1 be property owned b by persons who ho hoI I pay a f federal deral income tax In adds addition I tion to this amount there is a great deal of intangible role property owned m in small blocks by persons who ho do not come within the limits of the present notI federal income ta tax so that the situa sItua- situation situation I tion in m Utah today shows sno clearly that It is 15 the tangible property that is pay paying paying mg ing the great bulk of the tax that payl property is responsible for less than one and one-half one per cent of the total property ta tax and that no tax whatsoever is 15 levied upon m- m in income come conic Utah's problem of tax reVISion therefore ore wIllbe will be Ibe a readjustment in 10 inthe inthe the distribution of the tax burden which will shift hift part of the cost of state and local government go from tangible property which has been carrying the load to income or to intangibles which while they havethe have havethe havethe the balmy bality to pa pay have not been brought brou ht to the tax rolls here Subsequent articles will show thIs could I be dealt I under the pro pro- proposed pro pro- proposed proposed I posed constitutional amendments to tobe tobe tobe be weed to ed on next November |