The state and the city derive their revenue almost entirely from taxes levied on real and personal property. The state and the county derive part of their revenue from a tax levied on towns and cities, from a tax on automobiles, and from a tax on incomes.

The national government derives a large part of its revenue from a tax or duty on articles imported from other countries, and from a tax on incomes.

The tax levied on property is called a property tax.

The tax levied on persons is called a poll tax.

The tax placed on a man's income is called an income tax. The tax placed on imported goods is called duty (tariff).

Property Taxes

After the government officials of a city or town determine how much money is needed to defray the expenses for the year, certain officials, called assessors, place a value upon, or assess, the property in that city or town. (The assessed value is usually only a part of the real value.) By dividing the total expenses for the year by the total assessed value of taxable property, the officials determine the tax rate, which may be expressed in several ways, the most common being:

a. A certain number of mills on each dollar of assessed valuation; thus, 17 mills on the dollar.

b. A per cent; as, 1.7%.

c. A certain number of dollars or cents on each hundred dollars of assessed valuation; thus, $1.70 on each $100.

d. A certain number of dollars on each thousand dollars of assessed valuation; thus, $17 on each $1000.

The person who collects the property taxes is called the tax collector.

To find the property tax.

Example: Mr. Ely's house is assessed at $10,000. What is

his tax, if the tax rate is $2.12?

1. State each of the following tax rates in two other ways: 2.8%, 32 mills, $2.52.

2. What is the tax rate in your city?

3. If the board of assessors assesses property at of its real value, for what amount should Mr. Horace's land, valued at $10,000, be assessed?

4. If the tax rate is 2%, what is Mr. Atkin's tax on property assessed at $4000?

5. How much tax must Mr. Lewis pay on property assessed at $5000 when the tax rate is 20 mills?

6. Mr. Lamont of town A pays a tax at the rate of $2.58; Mr. Walters of town B pays a tax at the rate of 24 mills; and Mr. Dawkins of town C pays a tax at the rate of 2.6%. Who pays the most? If each has property assessed at $1000, how much does each pay?

7. A tax of $.0027 on a dollar is how much on $100? on $1000?

8. If the tax rate is 4 mills on each dollar, find the tax on property assessed at $10,000.

8. What is the tax rate in your city this year? What is the tax on property assessed at $8500?

9. In a certain town a house is valued at $6400 and the tax rate is $18.52 per $1000. Find the tax.

10. What is the tax on property assessed at $12,600, when the tax rate is 16 mills?

11. When the tax rate is 14%, find the tax on property assessed at $16,500.

12. At 12 mills on the dollar, how much is the tax on a farm of 120 acres, worth $100 an acre, assessed for only of its value?

13. If the tax rate is $20.80 per $1000, what are the taxes paid by a man who owns a house assessed at $6800 and land assessed at $4500?

14. The tax rate in Manhattan in 1919 was $2.32 per $100. What tax was Mr. Halstead required to pay on a house assessed at $7500?

Federal Income Tax

The United States obtains part of the money it needs to run the government by taxing incomes. The tax on incomes of citizens of the United States levied under the United States law is known as the Federal income tax.

Before the World War this law required every unmarried person to pay an annual tax of 1% of the amount of his or her income over $3000, and married persons living together an annual tax of 1% of the amount of their joint income over $4000. Thus, if an unmarried man's income in 1915 was $5000, he was required to pay an income tax of 1% of $2000, or $20; if a married man's income was $5000, his income tax was 1% of $1000, or $10.

On incomes over $20,000, an additional tax (surtax) was levied.

During and after the World War laws were passed calling for much larger income taxes. Thus, in 1918, unmarried citizens were required to pay a tax of 2% of the amount of their income above $1000, and married citizens had to pay 2% of the amount of their income above $2000; in 1919 and 1920, unmarried citizens were required to pay a tax of 4% of their income above $1000, while married citizens had to pay 4% of the amount of their income over $2000.

Incomes over $5000 were taxable at higher rates.
Find out the income tax rate for the present year.

[Use pencil when needed]

1. Mr. Tilden, an unmarried man, had a net income of $4500 Find the income tax he paid. (Subtract $1000; 4%

in 1919.
of $3500= ?)

2. Miss Alston's net income for 1919 was $3500. What income tax did she pay?

3. Find the income tax on the following net incomes of unmarried men in 1919: $3000, $3500, $3750.

4. Find the income tax on the above net incomes (example 3) of married men.

5. Henry Lane, a single man, earned a salary of $2500 in 1919, and had an income of $1000 from rent and $500 from taxable bonds. What was his tax?

6. In 1920 Miss Lillian Lowe earned a salary of $1600. What income tax did she have to pay?

7. In 1920 Samuel Smythe, unmarried, earned a salary of $3000. What income tax did he pay?

8. A stenographer earned a salary of $1250 in 1920. If unmarried, what income tax did she have to pay?

9. Mr. Arthur Doane, married, had a net income of $5000 in 1920. What income tax was he required to pay?

10. What income tax was levied in 1920 on the following net incomes of unmarried women: $4000, $2000, $3000, $5000, $3500?

11. Find the income tax levied in 1920 on the following net incomes of married men: $4500, $2500, $6025, $8200, $9025.50.