HOW THE AMOUNT TO BE RAISED IS DETERMINED
It is first necessary to know how much money will be needed by the government. Each year, therefore, the heads of the various branches and departments of government make an estimate for the coming year, based on their knowledge of past expenditures and present and future needs. Such estimate can be made intelligently only when there is an accurate and businesslike system of keeping accounts and records, and a well-planned BUDGET SYSTEM. Unbusinesslike methods of keeping accounts and the lack of a budget system have been among the chief weaknesses of our governments, equally characteristic of local, state, and national governments. Efforts are being made to remedy these defects and are described in Chapters XXV, XXVI, and XXVII.
TAXES ON PERSONS, PROPERTY, AND PRIVILEGES
The second thing to be ascertained is the ability of each citizen to pay. In some states a uniform POLL TAX is assessed upon every adult citizen. This is a tax upon the PERSON and usually amounts to about two dollars. Only those are exempt who are incapable of self-support. But the chief reliance is upon a property tax. State and local governments depend principally upon a GENERAL PROPERTY TAX, for which purpose property is divided into two kinds: REAL ESTATE, which includes land and buildings, and PERSONAL PROPERTY, which includes furniture, tools, livestock, money, and valuables of various kinds. In addition to the general property tax there may be taxes upon INCOMES and upon INHERITANCES. There are also LICENSE TAXES, such as dog and automobile licenses. Finally there are taxes upon certain PRIVILEGES which are bestowed upon the individual by the community and have a money value. Of such a nature is the license tax imposed upon a peddler or upon a person who maintains a market stand on the public street. Such, also, are the taxes placed upon corporations for the privilege of using the public highways for car tracks, water mains, or telephone poles.
It is necessary, therefore, for the government to ASSESS THE VALUE of the property (or privilege) of each citizen, and it has its organization for this purpose. Each local community The assessment of (township, county, or city) has one or more TAX ASESSORS, who endeavor to ascertain by inquiry values or inspection the value of each citizen's property. The sum of the individual assessments constitutes the assessment valuation for the town, or county, or city; and the sum of the valuations of these local communities constitutes the valuation for the entire state.
THE RATE OF TAXATION
The third step is to ascertain the RATE of taxation. This is found by dividing the total amount to be raised by taxation The rate of by the total property valuation of the county or taxation state, as the case may be. If the amount to be raised is $500,000, and the property valuation is $10,000,000, the rate would be 5 per cent, and the tax is levied against each citizen at this rate. A citizen who owns twice as much property as another should pay twice as much tax. Each should pay according to his ability.
DIFFICULTY OF JUST ASSESSMENT
This seems like a simple procedure; but it is very difficult to get a just result. The difficulty lies chiefly in the assessment It requires a good deal of intelligence to assess property fairly, even with the best of intentions. Assessors are not always competent. Two assessors may differ in their judgment, so that assessments in one part of the community may run at a lower level than in another part. Thus assessments vary in their fairness in different townships of the same county, and in different counties of the same state. An attempt is made to avoid this by means of county and state TAX EQUALIZATION BOARDS, which seek to adjust differences of this sort. But their efforts are only partially successful.