THE AMERICAN PROPERTY-TAX.
INTE11ESTING evidence was given before the Income-tax Committee of the Rouse of Commons, by the Honourable Dudley Selden and. Colonel johnson, formerly Senators of the State of New York, and. by. Mr. Ashbell Smith, formerly Secretary of State in Texas, on the principles upon which are assessed the direct taxes forming the principal revenue of those States, and. on the popular machinery for raising them.
has, then the merchant is as much exempt as the labourer at thirty shillings a week. So it is with professions. If all the yearly income is spent the earner pays no tax. A physician in New York earning ten thousand dollars a year, if he spends the whole, is only assessed on so much of his furniture as is beyond the margin of his legal exemptions, and on his house—if it be his own--as real estate. • Both in the ease of real property and personal property there are exemptions. But in the State of New York those named seem to be personal: they include the furniture necessary for the citizen's family—bed, bedding, clothes, tables, stools, cooking-utensils, and Stoves, and the food. for a cow and a pig,—about one hundred and fifty dollars' worth; also every seat in a place of worship, and— most honourable exemption—books for a family library to the value of twenty-five dollars more • altogether, about two hundred and fifty dollars' worth. In the Slate of Texas the exemptions are more comprehensive; they have a wise liberality calculated to fos- ter in the citizen the warmest attachment to his native soil. In a borough, they include a house worth two thousand dollars; in the country, a tract of land worth two hundred dollars; and about the same quantity of furniture for the domicile. The object is, that the assessment shall not despoil the poorest citizen of a house to live in a bed to lie on, a table to eat upon, and a pot for the cooking
dhis daily meal -
In both States, the great engine of taxation for all the purposes of State Government, and of Local Government, is the single means of a tax on realized property, directly levied, in simple proportion to its capitalized. value. The principle of valuation is this. In the case of real estate, the law requires that the assessment should be simply the actual cash value of the property if it were bona fide put up for sale in the market to pay a debt. In the case of personal estate, it is a similar assessment of all that a man has "over and above his just debts and the property which by law is entitled to exemption." In the case7f real property, great assistance to the assessor is afforded by the general usage of a registration of assurances in the States of the Union. Even in reference to the unsettled. State of Texas Mr. Ashbell Smith said, "You can go into any county in the State and on ten minutes' search can tell who is the legal holder of the fee-simple of any piece of real estate in the county, without any fee." Of course there are some pieces of land for which owners cannot be found: the State makes stringent pro- visions to ascertain if any person exist who has a right to these estates; and. if such person have perished, or gone away leaving no sign, or have chosen to abandon his estate, the event is ascer- tained in a period which never exceeds two years: all land for which the tax is unpaid during that time is sold under a State extent. The unsettled lands, it is of course borne in mind, belong to the State already; as in England, if they still existed, they would belong to the Crown. But it is seen that this sort of real property is always the soil itself. The American law, like our own, considers certain " inci- dents " to the soil as real property, and not personal property; for instance, rents, and real annuities. But, in the first place, there are but few rents, or annuities, in the Union States—in New York there is a law against the demise of land for any longer term than twelve years; and in the second place, annuities are not realized property: so far as they are in fiattro they are not the object of tax, and so far as they have already been received they become mere cash in hand. With regard to personal property, all which a man has, whether at home or abroad, is brought into assessment; and nothing be- yond what he actually has. Real property in England or any other foreign country is not assessed. against the citizen resi- dent et: ti nine. afth the eStafutes ; ,byuotupeearsonotal brought into assessment : still it must be realized property—never income, and never profit. Mr. Dudley Belden argued.—Profits are shares in the national stocks of foreign countries, ships seas, and partnership stock in all the localities of the world—are tax protpheem as roofivts : the a all wi o they world.: the are already earned. they are property, and in that shape they are liable like other property: income is disregarded in assessment, except so far as it is a criterion of value: therefore the labourer earning small wages is taxed as infallibly- as the merchant making large refits, if each of them has accumulated property • if neither "OsiVseems to be its sirn 411 - The grand recommendatioa 4 I plicity : by confining theassessment.tnrealizedRroperty, they get rid of the great ,bulkof the difficulties urge4 in t,hns. emustry n.sainst ' the various expedients suggested for lessesimg the inequality of the direct taxation. None of the evidence disclosed any material diffi- culties in the way of making a capitalization of the various possible interests in stack or other personal property. In reference to the stocks of all private corporations—shares in the stock of incor- porated bodies—the State goes in against the corporation itself, and a.ssesses its tax on the' property of the corporation; which then places the tax to account in its profit and loss books, before making its dividend: but on the State stocks the tax is levied in the hands of the holder, as so much realized property. But though no difficulties were described in the mere process of calculating the value of the interests, yet it would appear that the pressure of the inquisitorial machinery of direct taxation on the privacy of per- sonal affairs is galling; so much so, that Colonel Johnson's long experience was "unable to suggest any law sufficiently stringent to secure the full collection of the revenue due.froin personal pro- perty, which would not at the same time endanger the credit of the honest but enterprising merchant" "A full statement of all the details of a man's business, the names of his debtors and credi- tors, and the amounts to each and everything about it, would, as regards commercial men, be a very hazardous and disastrous thing." he local assessors have fall power to examine every person on oath, on every particular concerning his property. In respect of the charges on real property, all the world may learn as much as the assessor; for no mortgage is good against any succeeding mortgage till it is registered, like every purchase of land. When the assessment-roll is completed, it is open to the in- spection of all the world.: none of the particulars or grounds of the assessment are disclosed, but the simple amount of every man's fortune, when its owner and the assessor have agreed on the assess- ment of it, is ascertainable by every citizen at the mere trouble of inspecting the public records. The machinery by which the assessment is made is simple and popular. Every rural township, or municipal ward, has three as- sessors, one of whom retires every year, and is redected, or put aside for a more popular candidate: the duties of the assessor are moderately paid, and. the class of men chosen are the ipost select in the county. The Assessors, individually, and acting in boards, assess every foot of real property and every shilling of realized personal property of which they have cognizance; and they make a return of their assessment to the Court of Supervisors; who are elected yearly by the people, and bear somewhat the same relation to the Assessors that our Aldermen do to the Councillors—or rather, that our County Magistrates sitting in administrative bench do to our Municipal Magistrates sitting in judicial bench only. The assessment of the Assessors is supervised. by the Court of Su- pervisors; who equalize the assessment of discrepant counties and wards, and decide appeals from individual citizens demanding juster valuations. The Supervisors are the ultimate court of as- sessment; and. when they have revised. the assessment, it is sent to the Comptroller of the State Finances. This officer returns to each Court of Supervisors a statement founded on these assessments, of the share which each county has to bear of the State expenses. The expenses of local government are added.; and then the Col- lectors, a third body of popularly-elected officers, are set to work to raise the tax from each citizen according to the individual as- sessment of each, already publicly recorded. The State and County taxes together of the State of New York, in 1848, were about four millions of dollars ; the Town taxes were about one and a third million dollars. The proportion of the tax to the assessment of the property in the State was about 3s. 44. sterling on 20/. 16s. But it is very important to notice, that of this sum, the ex- enses of the State did not amount to above ten per cent. In exas, the whole State expenses last year were not more than between eighty and a hundred thousand dollars. In the new state the cost of government would naturally be small, but in the old state it must be considerable. The State of New- York derives it . chief revenues from the great system of remunerative public works which are the public property—chiefly from the Erie Canal. So that the ten per cent above mentioned is an illusory datum in reference to the real proportion of State to Municipal expenses. Then, in addition, the Federal Government levies almost all the cost of Federal administration in the shape of duties on the im- ports from abroad. Thus, direct taxation has nothing to do in supplying all the expenses of foreign relations—the cost of pre- serving peace, or the penalties of levying war, with the friends and foes of the Union all over the These ese exceptional facts show that the American evidence before the Select Committee on the Income-tax had a complex and not an explicit bearing on the question of how far the whole expense of governing a nation may be raised by direct taxation on realized property alone.
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