Income taxes and inheritance taxes have been levied by the Federal government, but as these taxes have also been resorted to by the states, we may defer our discussion of them to a later page. We come next to taxation by the commonwealths, and in beginning it may be well to study the following table showing the revenues of New York State for the fiscal year ending September 30, 1902:

Direct State Taxes (including the general property tax) $6,973,663.82 T
axes on corporations and their organization . . . 7,606,750.29
Tax on transfers (inheritances, direct and collateral) . 3,303,554.72

Liquor tax (State's share)..........4,221,671.99
Miscellaneous,fees, sales, etc.........1,555,134.61

Poll-taxes. One antiquated source of revenue which does not appear separately in the table is the poll-tax. Many states levy poll or capitation taxes, to be paid into the state or local treasury. Poll-taxes are taxes usually levied at a uniform rate upon practically all male citizens. They are difficult of collection, in the highest degree inequitable, and are gradually disappearing from the financial systems of advanced governments.

General Property Tax. The greater part of the revenue entered in the table under the name Direct State Taxes is from a general property tax, a tax which is levied in theory upon nearly all property, real and personal, in the hands of the people. The importance of this tax appears in the fact that revenue derived from it in the commonwealths of the United States constitutes nearly three-fourths of the state and local revenues, and nearly one-half of the total revenues of the country, national, state, and local.

And yet no economist who has ever written upon the subject, and no state officer who has had to do with the administration of the tax, has ever been able to speak of it except in terms of the severest condemnation. Naturally, then, there is now a strong tendency to work away from this form of taxation. Some of the many serious faults which the general property tax has everywhere shown call for comment and explanation.

Though the method of assessment and apportionment differs in many details among the states, it is the usual custom for assessors in each community to prepare complete statements of all kinds of taxable property owned by the people of the community. In some states the assessors receive from all residents sworn " lists" of property owned and subject to tax. By the terms of the law, the property is supposed to be rated at its true, full value, though by the acknowledged practice of assessors and courts of review, the real rates vary widely from state to state, and even from community to community. On the basis of the property valuations thus made the state and local governments county and townlevy direct taxes at a rate fixed from year to year according to the fiscal needs. The tax is then collected by local officers, and of the whole amount the portion levied by the county and state is passed on to the designated officers after each minor political division has set aside its share.

1. Unjust Apportionment. The first of the defects of the tax appears in the apportionment of the state's share of the tax. Each community has a narrow, selfish interest in reducing its valuation that it may escape its just share of the tax. In this sordid struggle of community against community, assessments are made to vary all the way from 10 to 90 per cent of the true values. The same mean struggle is especially frequent between city and country districts. To correct the evil, state boards of equalization are usually appointed, but experience has shown that such boards are unable to do much to lessen the inequities inherent in the system.

2.Inequity as between Realty and Personalty. In the second place, the general property tax has proved grossly inequitable in laying an undue proportion of its burden upon real property, allowing various forms of personal property to escape with a slight tax or with no tax at all. A secondary result of this inequity is that the rural districts bear a disproportionate burden, since the greater part of the tax-escaping personalty is owned by the wealthy citizens of our cities.

3.Inequalities of City Assessments. Very similar to the preceding evils is the further injustice wrought by the tax through the disproportionate assessment of the pieces of real estate in cities. During recent years several state tax commissions have found and reported that in the case of city properties the proportion between the assessed value and the real value quite regularly varies inversely as the value of the property. Thus in one case it was found that some of the most valuable properties were assessed at only about one-tenth of the real value, while properties of little value were regularly assessed at from five to six-tenths of their value.

4.Temptation to Dishonesty. It follows from the evils already described that the general property tax leads to a shocking amount of dishonesty, perjury, bribery, and other forms of corruption. Indeed, as one writer has expressed it, " The general property tax has gone far toward making perjury respectable and even virtuous."

Inasmuch as the general property tax has been condemned by nearly all students of finance and by financial administrators, we should all welcome the present tendency on the part of the states to turn to other forms of taxation. In several commonwealths the state governments have entirely or nearly abandoned the general property tax, leaving it chiefly to the smaller political divisons; 2a and other commonwealths are moving in the same direction.