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statistical data. The fact that more than one-half of the states have made definite progress along this line shows that the work of providing for a more efficient system of assessment and taxation has long since passed the experimental stage.

Thus it appears that the statement made by Professor Goodnow in 1897, that central administrative control of finance "has not been thoroughly worked out" no longer represents the true condition of affairs in a substantial group of commonwealths. Especially during the last decade, legislative centralization has been supplemented by a degree of administrative centralization hitherto unknown in the American political system; a movement which has characterized not only the field of public finance, but numerous other lines of governmental activity. While the practical necessity of this development cannot be denied by the student of economics and political science, the fact remains, however, that every step forward should be taken with caution and only after the most thorough consideration of the problems involved.

In this connection we must not forget that if the time should ever come when the work of administration in the commonwealths is centralized in the same degree as is legislative authority, under present conditions, the counties, townships, and other local units. of government would be reduced to mere geographical expressions and local self-government would cease to exist. The writer does not believe that there is any immediate or even remote danger that political and social evolution will bring the American people to such a system of government. The fact remains, however, that while we are urging the necessity of greater centralized administrative authority to the end that political organization may be in harmony with industrial and social conditions, our enthusiasm for mere efficiency should not cause us to forget that there is another side to the problem. While it will be generally admitted that modern capitalistic industry, with its machine production and rapid transportation, makes it necessary to centralize certain functions which only a few years ago were local in character, this does not necessarily mean that the advancement of material civilization has not brought to the front other problems which can best be solved by the cities and other subdivisions of local government. Hence, the "home rule" movement would seem to rest on a logical basis and will probably receive greater attention in the future, as admin

istrative control of general problems becomes more and more centralized.

With these considerations in mind it follows that administrative authority should be properly distributed among the various units of government from the state down to the minor subdivisions. A more centralized administration does not necessarily mean the transfer of power from the township to the county or from the county to the state. The reasonable demands of centralized administrative control are provided for when the functions of each unit of government are placed upon an efficient business basis. This holds true of the township, city, county and state. In matters of public finance, however, it has been found that the county rather than the township, from an administrative standpoint, is best adapted to meet the requirements of a scientific revenue system, made possible by a wise correlation of state and county authority.

At the present time the legislature of the average commonwealth is more or less arbitrary in determining the maximum tax levies and bond issues of counties and other subdivisions of local government. Aside from the legislative authority thus exercised by the commonwealths over the local units of government, it may be said that the tax commission movement, so-called, means that a central state board of some kind should exercise the following powers: the administration of the tax laws including the supervision of assessors, boards of review and all other local taxing officials; the collection of all statistical data necessary for the purposes of review or equalization; the assessment of the property of public service corporations where the ad valorem system prevails; and, finally, the reassessment of taxing districts in cases where it is considered necessary, or even the sending of agents to perform the work of reassessment. Numerous other functions might be mentioned but these can be determined by consulting the tax commission laws of any one of a score of commonwealths, especially those of Ohio, West Virginia, Wisconsin, Minnesota and Kansas.

In conclusion, the essential facts presented in this paper are briefly set forth in a plan of state tax reform outlined by the writer in an address delivered before the fifth national conference of the National Tax Association, held at Richmond, Va., in 1911, which, with some modifications, is as follows:

1. A permanent state tax commission or tax commissioner,

appointed by the governor with the consent of the senate, paid good salaries and serving for not less than six years, said commission or commissioner to have general supervision of the entire revenue system, with authority to assess the property of public service corporations in states where the ad valorem system prevails, act as a state board of equalization, or, in case of a single commissioner, to serve on said board, with additional power when necessary to compel the reassessment of property in any taxing district of the state or even send expert agents to do the actual work of reassessment.

2. A county assessor or county tax commissioner, to be elected by the people or appointed by the county board of supervisors or tax commission, his term of office to be not less than three but preferably four or even six years, having authority in turn to appoint deputies to aid in assessing all the taxable property of the county, or, in cases where the prejudice for the township system is too powerful to be overcome, to be at least a necessary connecting link between the local assessors and the tax commission, having general supervision of the former and serving as a member of the county board of equalization.

3. The gradual transfer of fiscal authority from the township or similar local unit to the county, said transfer to include both the collection of taxes and the assessment and equalization of property, the actual changes being made with great caution, only after a thorough study of the history of township and county government, and always with due regard for the prejudices and political habits of the people and other legal, economic, or constitutional considerations.

4. The local taxation of property or business that is local in character, and the state taxation of property and business that is non-local, thus having its legal situs at the capital of the state; it being apparent from a careful historical and comparative study that the exclusive state taxation of local property and business, following the inevitable logic of the advocates of segregation, places an unjust burden upon the cities; and the local taxation of property and business not having a local situs, e. g., main track, rolling stock, and franchise or intangible value of railroads, compels the majority of rural taxing districts to bear the fiscal burdens of the minority through the payment of telegraph and telephone tolls and railroad and express rates.

5. In cases where the state tax on non-local property and business, coupled with the customary fees and an inheritance tax both collateral and direct, is not adequate to meet legitimate needs, a levy of the required millage on the actual cash value of all taxable property in the state; and in cases where the revenue from said sources is more than sufficient for state demands, the distribution of a part thereof to the local districts for various purposes and on a basis in harmony with the conditions prevailing in a given commonwealth.

6. The assessment of property on a geographical basis at its actual cash value, real estate to be listed separate from the improvements thereon, the rate on moneys and credits, however, being placed at not more than five but preferably four or even three mills, it being recognized that an efficient administration of the general property tax on any other basis is impossible; and finally, when practicable, the extension of the ad valorem system to the property of public service corporations in order: first, to obtain a true measure of fiscal burdens, both individual and corporate; and second, to find a common ground in fair valuation for the equitable taxation and intelligent regulation of these great and necessary enterprises. In states, however, where a tax on earnings has become well established, a change to the ad valorem plan should not be made without very careful consideration, for the obvious reason that the most essential thing is the efficiency of the administration and not the question whether the tax itself happens to be calculated with reference to value, earnings or some other method.

While conditions are materially different in different states, it is believed that this fiscal law, founded as it is upon centralized administration, the proper correlation of power and authority as between the various divisions of local government, actual cash value of property, a desirable substitute or substitutes for the worn-out personal property tax, and the equitable distribution of taxes. received from public service corporations, is sufficiently elastic to serve at least as a working basis of rational tax reform in the average American commonwealth."

State and Local Taxation, 1911, pp. 82, 83.

PART THREE

PLANS FOR THE REORGANIZATION OF COUNTY GOVERNMENT

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