Federal aid moneys all come from indirect taxes, for the Constitution forbids the national government to levy direct taxes.
In Alaska 65 per cent. of the “Alaska Fund,” a fund derived from all returns from liquor, occupation or trade licenses obtained outside incorporated towns, must by Congressional law of 1905-1906; be spent in Alaska for roads, trails, and bridges.
License fees on motor cars and sales taxes on gasoline belong to the class of indirect taxes, and are attempts to charge the user of the road in proportion to the wear and tear produced by him or his consumption of it. If the motor car is an express truck, a bus, or a taxicab the tax is passed on to the patron, and this patron charges it to the cost of living and attempts to pass it on to his employer through increased wages or those who do business with him. It is finally paid for by that visionary personage the ultimate consumer—everybody.
Special Taxes.
—Special taxes are those levied upon property for a particular improvement that is demanded by public interest. They are not uniform but must be levied in proportion to the benefits accruing to the property from the improvement. This class of taxes is very popular for financing the building of roads and the paving of streets as well as other public construction. The area adjacent to the road or pavement for a certain specified distance back, or possibly, halfway to the next thoroughfare, is assessed for the improvement and in road work is technically known as “fronting property.” Each piece of fronting property is required to pay toward the whole cost of improvement an amount proportional to the benefits derived from the improvement.
These benefits evidently decrease as the distance from the improvement increases. They may not always vary in the same ratio, but appraisers will usually follow some definite rule and deviate from it only in extreme cases and as local conditions demand. That they should not decrease directly as the distance but in some geometrical ratio, most engineers agree. Law courts have frequently upheld assessments made upon some such basis.
For the purpose of initiating an improvement by petition it is customary to adopt a fixed scale for the measure of the benefits, based upon distance, that will probably be derived from the improvement. Some legislative bodies have enacted definite rules for evaluating “influence” in petitioning. Generally the rule is based upon some mathematical variation. For example that the assessed value or influence of property of uniform width extending back from the roadway shall vary as the square root of the maximum distance back. In the [figure] on page 313, a lot of one-unit area fronting the street is given a value of 31.62. This is from the mathematical formula
y2 = 1000x
where y represents the assessed value or influence in petitioning, and x, the distance back, considering the value of y = 100 for x = 10.
To draw the curve mark off on a straight line ten equal distances; at the mid-point of these distances or units erect perpendiculars. From the formula calculate values for y as shown in the [table]; lay these off on the verticals and plot the curve through their extremities. To clarify this some, suppose that upon the center of the first space, there being one unit area or lot here, there is stacked up the value of the assessed benefits 32 (31.62) silver dollars. On the next space, since there are two lots extending back from the street, the stack would contain 45 (44.72) silver dollars—continue this for each space and for the number of lots extending back. A curved line passing through the tops of the stacks representing the assessed values will be the influence curve plotted.