s Wash 50 TZOOr 1121 UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY '■^^ \^i^5\•.(^n^- 1-^"^*'') ^'^^ l^-.«5lwoJ\•^ L»fl^«\V^^^ ng REPORT of the STATS OP WASHINGTON TAX imrSSTIGATIOU COMIIITTEB Appointed by The Governor, Louis P. Hart, By virtue of Chapter 171 of the Session Laws of the State of Washington, 1921. T H ^ 21 fl »dt to HOTjDKIKSAW 'iO STAT8 SSTTLHiOD i:0 ITA£)IT3£VHI XAT •^d tsdT.ioqqA .d-rrsH . i: eiuoj ,rronisvoT) sxlT »r£;t ^0 ewaj no x a a ©8 . isei ^ Z 1. The Act providing for the investigation of taxation. (session Laws, 1921. Chapter 171. S.B.204) •^ for. IITVBSTIGATIOIT OF TAXATION . An Act authorizing the Governor to investigate the subject of taxation and to employ assistcince in mak- ing such investigation, and making an appropriation there- WHSBSAS, real property and tangible personal property are now "bearing the entire "burden of taxation; and YilfflREAS, this class of property cannot be any more burdened without confiacation; and WHSREAS, it is necessary that some steps be taken to bring about a more equitable and fair distri- bution of the burdens of government as related to rais- ing of revenues; BE IT EITACTED by the Legislature of the State of Washington: GO^RITOR AUTHORIZED TO UAICS ; Section 1 . That the Governor of the State of Washington be, and he is hereby empowered to take such steps as he shall deem necessary to properly in- vestigate the entire aibject of taxation. •.n, .1 .i:oit;j(AT to i.;citasit5z:vt:i -iis;.: nJ- aorrjeJal&ae ^olqxas oi- bos noicfjBXBt lo d'osi^cfue sxfJ ■ siedt rroi^jciaqoiqqjc ns anxyijsni i^nje .noiJaBi^savni iioue ani .101 ',Cioi.^sx£i lo nahni/cf silon© ©rid gniiflscf won sie ^c^asqciq Jjn£ ■^njB sd ;tonn£0 TcJrroqoaq lo eealo axxi;t ,8Al'JIZK,V 1)06 inoid-^oailaoo iuoditv boaobiud sicxk 9cf aqo;ta scoa isdi ^leaasosn el ctx tBASU'di'Jii -axBi oit l)od"Blei a*; ttieiznisro^ lo ansi^'xxfa' 9x1* lo aoiiud ;asjjr;ev9i lo gni 9d-i3*3 odi lo snx/cfBlalssJ ax{;f \;cr CIETOA/Ifc TI tiE :no;t8nixIaBV/ lo aasiflOHTUA HOTj^iavop z ELIAII O T 9*s*8 oxi* Ic lon-xavoO axi^t ;tsxfT , I noiJ-oaB ^' 82lBd' oJ" f)ei&v,'oqm9 Y-^9'X3xi si sxt Jjnjs ,9a" noi-jnxrlsBW lo -ni ■'clioqo'ic ci '^n^eaeocn cissf) Ilsxie sxf sb aqa^ts xioxra ,noli-J?Xfid" lo too^dm stttcie erf* sJsgJcd'asT 2. A5SISTA1TTS; Section 2 . That he shall employ such expert assistants as he may deem necessary to make a thorough and comprehensiTe investigation of the entire subject of taxation. REPORT ; Section 5 « That he shall make and publish a report of his findings and recommendations regarding the subject of taxation at least six months before the meeting of the next Legislature, and file his report with the Legislature for its information. APPROPRIATIOIT $20.000.051 Section 4 . There is hereby appropriated from the general fund to the Governor of the State of Washington the sum of Twenty Thousand Dollars ($20,000,00) or so much thereof as may be necessary to be expended upon his personal voucher to pay the expenses of said investigation. Passed by Senate March 1, 1921. .. .'.■3. Passed by House March 8, 1921. Approved by the Governor March 21, 1921, U*. -.iviall .s j8TT:AT8I88A ioslaue sixths aiii 1o nox*£3i^ssvnl erlansrlanqnoo ims ;TfiOqgIg gfjxiriJiaoi snoid'i:l)n3f.!c:oo9'i i^os asniiinil aixi "lo ^laqs-x jj 9x1* eiolscf aii;trioir. xle isBal ie. twiiBr^i Ic ioeidum edi iioqsi. Bid slit bne ,3iiij-£lei39j *x8n odi lo ^nitoesi • noid'BflncolnJ: ati lol eniui£lai.-Q9j. sdi dOxr "i^o".o :c.osf moil i)S^£i'xqoiq.qi5 ^jc'siQxf ax oiaxiT . ^ noxJosS noi-sniriB3W "ic ?i'.od"8 srl^ Ic 'xoniovoO exlJ o^ Jbni;"i lisasnss sdJ 08 10 (CO.OGO.OS^;) aifilloG LaeexjoxIT Y^nswT Ic rrjje exicJ- slri noqjj Jjsbnaqx? scf o* ^iBeesoan ecf •'^jbc: e£ losierfd" dousa »fioi:^aS-t^3 9vni ijxea "io osenoqxo sdi Xfiq oi nedoucv Ifinosisq .XSSI ,1 rfoislT 9J-J3ri98 ^cf ijsaaja^ 3. Pursuant to the a"bove resolution, the Governor addressed a coinmunication dated June 17, 1921, to the following named citizens of the State of Washington, requesting them to act as a committee to investigate the tax system of the state and report to him a sufficient time in advance of July first to permit him to make the report required under the Act providing for the investi- gation: Nathan Eckstein, Seattle D. W. Twohy, Spokane Alex Poison, Hoquiam George M. Elliott, Tacoiaa i to •■ Prank D. Oakley, Tacoma W, W. Robertson, Yakima Peter lIcGregor, Hooper S. B. L» Penrose, Walla Walla Robert H. Harlin, Seattle, CHAPTER I . ORGAITIZATIQIT OP COMLIITTBB . On Wednesday, July 13, 1921, the persons named met with the Governor in Seattle for the purpose lonisvoB Bdi ,noid"uIo23i svocfiJ erf* o* inBueiifZ 9x1;^ ci ^I^fil ,VI snyl i)3d-a£i noii-eoinrncioo f5 besee'S-bbs fidi s;££u ocf ciin j-xnieq oi iaill 'iluL Tto son-.vbs nx SiT(l;t :noxcfi58 raexupoK ^noelo'^: rrsIA snoosT .iioillS ,il ajiiooD eX'tocsT ,\;9l:xB0 .C ^fiuei^ sniiaLsY ,noed"iscJofl ,W .V.' nsqooK ,Tco£,9iColI isd-sl &11&1' jbII^'kV ,9eoir£9C[ .J ,& ,p ,9ld-J-638 .nilixiH .H d-iscfoH .I_HaT3AH0 anoansq 9r{;t ,isei ,S/. y-^J^T. .■'C£j3Gsni)9W nO 4. ■5 ^ of organization. The Governor called the meeting to order, stated its purpose, and requested the coimnittee to select a chairman and secretary. Mr. Prank D. Oakley was elected temporary secretary. Mr. Eckstein of Seattle was elected chairman. He was instructed to maintain the office of the committee in Seattle, Reeves Aylraore, Jr. , of Seattle, was elected permanent secretary of the committee. The only other business transacted at this meeting was that of fixing dates for future meetings and giving instructions to the chairman to secure and equip an office and engage clerical help. It was decided to hold regular meetings of the committee on th^ second Monday of each month. EUELIC MS5TIIIGS . The committee decided to hold public meetings in all of the principal parts of the state, and to extend to every taxpayer and to those interested in tsixation, an Invitation to express their views concerning the changes to be made in the tax laws. Twelve public meetings were held at: Seattle, Tacoma, Aberdeen, .» »aoiifF.iciB:Qi.o to ,i9bio oi sniJ"96m ori^ LoIIbo 'ionievoC 9xfT o;^ oscl'i'lmntoo edi b&ieesjpei bna .asoqiiJu: ail beiBie lo rTi9d'Q:ioj ,TcM ,y,i^isioas v;rii^.ioqxrt&^ iigJ-oelg sew od' hetoiJiianl saw 9H .nsffliisrio i)9;fo9l9 sbw sI;toB9B .sIJ-jBga ni 9&Ji"xrat:oo sxil lo eui'ilo exTJ^ nlB^nJt^sat • as^^irranoo aiii lo liijecfe^osa qlsjgB brts--. e'iuoss oi nsmiisiio adi ot anoiioiJitani gnivls Jbnooao sricf no esJcfiininoo sxfj' Ttc aanxc^pgm iBlsj^et blod ,xic^^0Ia xiojss to c^bnoliL a3ni;t09rn ollduq blod oi bsbioeb eQiittsmoo 9xiT bna&xe ci bciB ,3iBtB grlJ- lo eitsq iBqlonitq oxfJ lo ILb ni. ,noiJ£Xscf ni beieeisini saorlJ- cd" i)nB isT^fiqxBct' y'I9V9 o* 9xict snJ:ni9onco aweiv zledi aeaiqxo oi ftoxJ"scfivni n^- oilduCT svIstyT ,swbI ;cs;i 9;IJ nx ab&a. ed oi aggnimo ,n99i)iacfA ,bcioobT ,9lc}"J"£98 :l£ i)l9Xi siaw Egnx;t99xa 5. Chehalis, Vancouver (Washington), Yakiraa and Spokane. Certain dates were set for the lumber interests, the railroads, real estate owners, fanners, and fruit growers, and at these meetings an effort was made, with satisfac- tory results, to have every interest in the state repre- rcfj .a ae iwo o 3i re sented. Chambers of commerce and other organizations were invited to send representatives to discuss the subject of taxation and to recommend changes that would bring relief. These meetings were well attended amd much inter, est was shown in the subject. In the earlier meetings an attempt was made to hold the speakers to the subject of changes in the law needed to make the distribution of the tax burden more equitable and relieve real property and tangible personal property. This plan liad to be aban- doned, as only a few people had suggestions to offer, but all wsinted to speaJc on the general subject of "Too much money being spent by the ta:cing bodies in the state," At meetings held in the farming and fruit grow- ing districts it was frequently asserted that the farmer cannot rent his farm to a tenant for enough to pay the taxes on the land, and that if the tax burden becomes .a sriJ- ,cd-Geio;tni ttadnu;! edt io1 tas .sisw aei'eb cilmte^ -9iq9i eisiB evli nt isQistni \;ievs erad oi ,siLuGQi \ioi ■nci^J-f^sinesio leciic bms soiaimiioo lo aisdaiBriO ,b&tnes eiit aauoalb oJ e9vid"ijJ"n9B9iq9i iinea oi bsJivni oisvr -letnt riou.-a bna J!)9£)n9Jw£ Ilaw oiaw 83nld-99Ki 9e9riT aaniJ-osd is x lias erii nl ,;to9t,cfu8 9xi;J- ni xnrorla bbw ;tes i-09i;,^jj3 sxW oi BTCSJtesqa sri;t joIoxI cJ^ absm ssw d-qxcsJJ-jB ne 1o notiisdltiaib atii 3:i£ui oi bsbeaa wjbI edi ni asyasrio lo Xiieqoic Ibsi 9V9J:l9i bna eldsitupe siom n9liircr x^i eAi -xtecfB ecf oi bcxi nslq f-iriT ,vii&qoi'. Isnoeisq slcfisos* Lne d'jjd ,icHo ci- anoxJ-sss^tra £)bx£ alqocc W9l J5 \^Lao es ,Jb9noi) ilaud ooT" "io J-ogtuJfa Ifiisnsa edi no :ie9qe o.t bac^aerr lis ",9^£*a arfj- ni asibocf snixsc^ sdi \,<^ iasqe snigd ^csnom -•wcaa d-iJLTil i>n£ anlmisl sdt nt bled esnxcfssxn iA i&mi^t odi i£S':i bsiiesec -^Licieup^iil aav/ ii atoltietb ^nt adi y,&q oi d^sjoaa 'lol ia^noi s oi mxel sirf *n9^ ionaso a9mooscf nebtisd: xe- edi ti isdi hoc .bnel adi no eax^i 6. heavier farming and stock raising will cease to exist in the state. The principal spesLkers at the meetings in the cities came as representatives of the associations of real estate "brokers rather than as the owners of real estate. The small home owner was conspicuous by his absence. The comnittee held two public meetings for the piirpose of hear- ing from owners of reail estate, but only a few owners ap- peared, and their concern was not in a changed system of taxation, but in some plan to stop the local taxing bodies from proceeding with the expenditure of public funds over the protest of th« owners of the property that carries the load, At several of the meetings papers were read which showed that the several organizations of business and labor in the state were willing to, and did, study the subject with the idea of helping to bring about some beneficial change. These papers are bound in a separate volume accompanying this report. It was not deemed advisable to have a detailed stenographic report of the proceedings of the meetings. The stenographer was accordingly instructed to secure the .a etii nl e^niissa sdt j£ arrssLesqe Icqloninq sxfT iO anoxJ"--. i:oo88£ srlJ" "io ssviJ'ficfnsnaiqoi es snieo eslJ^io ,0d"Bi-a9 liisn. to s'isnwo srf^ as nadi lorlj-Bi ai&aioic'" sJ-^^ea Ii;9*i 9riT .sonoetfi: airi Ycf BtfOJJOxqenoo 3bw lenv/o anioii Ilfima sriT -xssrf xo seoqiuci arij lol asniJQem oxicfuq owi- i)l9x{ aeJ-itiraiioo -qs eiQuwo wal e TC-^nc ^ruu ,9d-ed"as Jxsi lo aisnwo moil sat lo me^fs^s l)9SK^o -s ni J'on ejBW nisonoo ileat bns ,i>9ru:9q asiiiocf §ni:c^d' l£ooI 9iid" qoi"3 o^ n>slq 9ci03 ni j-ud ,noic)"BXjsi- •XSTO abaul oilcjjq lo 9ii/i^iijn9q:c9 uri^J^ ritir a^-ti^s^ooiq nro'x'i asiiieo J-^d- x^isqoici erlt Jo aasnv/o wiii" lo ^tas^oic axii ,f)BOl ^xfc^ Iwr-ot srrsw sasqaq esnx^s9ni 9xid" lo Ibtsvsb d'A sesniaua' lo anold"£:sxneaio Ifiisvsa grlJ J-BX^d- x)9worfG rioixfw YiJWd'a ,i>iii Jbnfi ,ot anilllw eisw 9d^j;o8 gxiJ' ni loosl hciB SKoa Juou£ snxicf cJ- anxqlgxl lo ijsiji: 9xfd' rl^iw ^oaocfx/a grid- 9-£isq9e s nl i>ni;ocf ois a-xsqaq saaxIT .©T^nBXfo IjBXOxlgnscf .d'loqsT: eixL;^ anxYnaqraooos scjjIov i>9lx£d'9i) B 9VBrf o;t oIcfjBexvbB bsaeob i'on aevr ;tl .a3nld"99n edt 1o agnxi)0900ir 9xfd' lo iioqsi olxlqa^isoned'a 9XlJ 91X1098 oi beioL'iiacii ^l^ciibiooos bjbw agxlqjsiaongd'e 9rii' ioosa exlT odd' oi iaxIoii'JB 3i£ griiJysm rlcse Js bssi eiaqeq srIJ" lo .biooai Iliw agnid-ssin saoa;^ ^o btooei esii 1o aniJoeert A \rnj3ra i-Bxid - d'e/.-.sI ;t£ .anir-J' ano lo Tsixesi ori;t sonivnoo tLoL'ia. ooJ aoil gnxisliljja ai sJaJa sn'i ;t-.Gr:d Xssl slqoaq sxiJ- lonisvoO srI:}' o^ sJassai/e setJ-irrjuoo srlT . d-nsxanisvos •Iqmxa nx cJTiefl»J-£j-e anlld'uo ns gnlrlsilcfi/q lo ^i;J"lJ"icfB8XYl)jB -sixiBsic ,*n9iia«sv03 lo anoxexvi^ odi Ic Il£ ^aiwcxla *fjaol -vos lo eijnsaQf) sxf^ inesaici od" ae nsnrtera b iloua nl ;tl gni gniiTiioq .d-oxils Jtb i)nB ^i-io ,-\:;fnjJoo ,9d-i3*3 lol ineanie -eh hoos 9ri^ btis ,^300 liedi .erroic^osqanx euoisnu/n 3rf;t iuo lol gni^J'sa 9:tB ^edi iadvr voaA ion cb slqosc; sxiT . i>9vxa al9xi* 9sxvi)B i9w*9cf hitfco ^^^^ W9riy. x^^* "^^ .iBlIoi) rcBj" liarl* ,9ii;d-jBlaig9l odi nl a9vxJ'£d'n939iq9i -qoi^ :i)i 00 9'i odi '^o bgsoloall) si anirid" loild- orsA ^icf nv7on2t el d-osl axif? ,besseeas X-^di&tiupo J-on al xiis X19V9 ni i)nB songx'xgqxg l&aoeioo moil arronwo vJ-iaqoicr ic^-sci -iG c's9;f j-xirjnoo 9x£d- anilleo ni beeu 3BW 9xai:3- rioi/ci 3niJ-s9m Ic looiq anJco ngeeiq ni £»X3.s 89iiilBXfp9ni e^adi oS noiJnsJ- 8. assessments varying from twenty to a hundred seyenty-five and two hundred per cent. The meeting of January 30th and 31st, held in Seattle, was of particular importance, Oregon has a com- mittee appointed to do the same work for that state that this committee is doing for the Governor. At this time the majority of the Oregon committee, namely, lir. I, IT, Day, Chairman, Mr. Coe A. McKenna, Secretary, Mr. Charles A. Brand, and Mr. Walter M. Pierce, met with the Washington committee, A reading of the short report of this meeting is especially recommended. At this meeting, also, the preparation of our report was discussed. A study of the tax prolslems of other states and of the reports made by other committees of like character led the committee to feel that the re- port should be presented to a tax expert for final draft. It was unanimously decided to ask Dr, Harley L, Lutz, Professor of 3conomiC8 in Oberlin College, and Editor of the Bulletin of the National Tax Association, to come to Seattle and, with the secretary, prepare the report, based upon the findings of the committee, and to include in the report the outlines of a model tax system for the State of \7ashington, based upon the plan proposed by the .8 9vi^-^::^^^v98 bBtbaud e ci x^navi moil anxYiBV e^n9fli8BSR8B ,inQo 19CX boThc.uti ovri bns ai blsd ,ie£Z bns r{;tGS T^'LBijna'C 1o gniJ^aeci 9r£T -raoo J5 SBri noseiC .oofLsJ-ioqaii XBIu^ic^1£q 1o aaw .sli^BsS *Br{;t eJ-jsJe ^r;rl^ lOx :{now eoBs eiij oi) o* betntoqqs S9j-Jim 9ciio axrfi- -A .lonisvoO sxIj :to"i s^iott ei 99;fJ-inaaoo ejtxl^f ,TI .1 .111 .^Igiosn .ee^^tii.flnoo nos9aO 9ii^ "io TtJi-xoi^sxii sri* cgltsrlO .-xLI ,x,i£iaio3Z ,er;n9]IoLI .^^ 9oO .il. .aEiriiiBdO .^^CE no;J3riirIcaY/ axfcJ- xic^x\r isic ,9oi9xg: ,11 teilsXI .-CI br.£ ,bajii3. ,A SnJ:;f99ai eJtxfJ- to irocisi iioda edi 1o :^ni.bsQt A .ssiiiisaoo ,i>9bn9ranoci9i \rllfiio9q39 sx 1JJ0 "io noxi-BiBqaiq 9x{cf ,oal£ ,3ni;f99iii sirij iA lo ercgldo'xq xBi 9ri>t Ic vijuJe A .hssauoexl) saw d-iog9i eo9Jcfxnirioo 'i;-iito xd absn ad'noq9'X arid" lo bns osiE^a isdto -91 odi jsidi leet od- gsJ-j-lmoo 9xld- bol istocisdo 02lxl lo ,it£.ib Xsnil lol: *i9qx9 xeJ- b o- I59i"n889aq 90 blxicxie iioz ,s*i/J .il ■^sIi-cH ,1CI :lsB oi bsbtosb \lsPoizi:ci£.nu sbw t£ loilbii bn£ ,929llo0 xiiliscfO nx aoixionooL lo loaasloil 9moo o& ,noxd'i5xooeeA xbT iBncxJ-BPI 9xid- to r.iiallsjS. 3tli lo ,*ioqoi 9xiv eif:.qQZf-^ ,>CTJ3d-9i09a 9x1* riJir; ,Lr-L-. sZi:^:23e od" 9i)jjIonJ: ol bnB ,99;td"XLiKioo sxid" "io esnxunx'i oii^J" r.oq;j b98Bcf 9xli- lol :z3ia\,e xbJ- l9bor. b lo eQni.it uo sd* d-ioqgi 9x£J- nx 9i£J -^cf beaoqoiq nelq adi noqxi JbgaBo' ^aoi^^.ldeaV to et&t8 9. national Tax Association, adapted to the special needs of our state, Comraittee meetings were a heavy draft on the time of each of the memters. Nevertheless, the nieetings, with few exceptions, found all members in attendance. About the first of the year '£r, D. V/, Twohy was made a western representative of the Federal Reserve Board, and his duties as such kept him from the committee meetings, but in order that he might be kept advised, his nephew, Mr, Edmund P. Tv/ohy, at his request, attended the meetings in his behalf. SimioARy OF Rll!GOT/MT.!Tn)ATIQlJrS AlTD SUGGESTIOHS . For convenience the committee's findings and recommendations are svutunarized here, A more detailed discussion of these suggestions will be found in the body of the report, -1- The establishment of a state tax commission of three members, to be appointed by the governor for a term •e ,a8r£J:;ts6t-: oxi^ ,aeGl9ri;tisv9H .anscLTiera or!!* lo xlo^s lo 9Gu:t ,9on£i»n9cti'j3 nJt 3i9cfciem 11b bnuol ,er.oJ:iq^3oxs wsl riii'f,' t>n& ,bi&oE Qvasagfi l£isi)3'i an'j- lo oriSnineesrs.qQ'i nne^eew ,3ani^e9.v. ssJ-^tXEEiioo e:ii ssioiJ. i&iii icezl rfri;3 p.b esiiwi) exrl .wsriiisn eixi ^besirh^ ic^in^ scf J-iisir. 9Xi ^-rlj letoio ni J-jjcf 8snxd"'39n srit bsbnetis jJasxrps'x aid J-£ ^xfiovH! ,^. baumbS. ,aM £>K£ esniljnxl a '&9d'c^i:n'iKoo edi Qonelaevaoo no't belts&Qh oicic A .919x1 b3ss.iciiii\jjB oi& anolSs^basivmooai odi ai bciuol scf Iliw enoxd-sgj^sije eesdi^ "io noleaAroeli) ,J"iocx9a 9x1^- "io Y^ocf -I- lo noise i;:xnoo y^i eiF.te b lo ^fnanxfaild^ii-es sriT iin:9i- .-s lol lonisvoa atii ^tf £)9inxoqi3:JB scf oc}' .aisainera seiriJ 10. of years and at sufficient salaries to attract high class men, and the thorough re-vision of our system of tax ad- ministration under the control of this tax comiTiission. (p. 77) -2- The introduction of assessment at full value, with proper safeguards against local extravagance during the transition, (p. 34) -3- The development of a budget system for the state and of a plan of budget control over local spending dis- tricts including counties and municipalities, this control to he vested in the proposed state tax commission, (p, 94) -4- The most careful economy and efficiency in pub- lic expenditures on the part of the state, county and local officials. (pp. 19-31) -5- The assessment of all public utilities by the proposed state tajc commission, (p. 64) -6- The equalization of all assessments by the pro- posed state tax commission, and the abolition of the present .01 easLo xig-^-fi Sos:.i&:}s o& aaiiclsa inslot'ttua ic bn.s erusoY ^o -bPi XB;t 'io oed-e^re luc 1o aoiaivQi risirciorlJ arid' bci^ ^nsm .noieaiOTuOO xr.j- sixlJ- lo loid-noc sxid ishni/ «oiJ"£iJ'aix:iir[ (7^ .q) ,qu1bv ILuf is drtSLieasesB lo noiiovboiini oxfT (.^C .q) .noxJ-jteriBid- sxIJ- -£- ad-Bd-e srld- :tol roacfaiie d'£jii)jja s "ic ;tn9r:tqoIsv3£i 9XlT -eJtb snj:£>n9q3 IbooI iovq Zozicsoo tovbvd 1o ni^Ic J3 Ic bris loidTioo aidd- .esxd'ilsqicinjjrii £ina asilnwco §nJ:£)i.'Ionx sdoiid" (^6 .q) .ncxaaxnEioo iii-sd" 9d"^d5 i)93oqoiq 9x{d- nx £)9dp.9r da ci -cfjjq nx ^onoxoi'ils bne i^nonoog luloir.o d'aom 9jrfT Ifiool iiris voHi/oo .sd-fid-e sjrfd" lo d"i£q 9rW no ssiudxJsngtpig oil (IZ-Ql .jq) .alsiox'i'io -a- 9rfd- y;cf egjcd-ilid-u oxlcfx/r Il3 lo d-nsrcaesseij oriT (^d .q) .noxaeiiiiTioo xsd" Sjrid"s ^aaoqcxq — VJ — -oiq gxid" \jcf adrcsmeegaafi lis 'io noidssll-si/ps grIT d-naasiq sxld lo noxd'xiocfjs grid' bus ^noxaainicioo xsd" 9d-£d-3 beacq 11. ex officio board of equalization, (pp. 78-84) -7- Administration of the inheritance tax by the proposed state tax commission. (p. 86) -8- Increase of the filing fees and annual license taxes on corporations, (p, 113) -9- Increase of the tax on fuel oil used in inter- nal combustion engines to three cents per gallon, (p. 129) -10- Increase of the fees charged by various county offices sufficient to make these offices self-sustaining. ,(4P*.U4) ■ ■' ■■ ' or -11- The establishment of a highway tribunal under the highv/ay department for the purpose of securing more vigorous action against those who violate the highway law. (p, 112) -12- Restriction of the personal exemption to house- hold goods and personal apparel. (p, 124) -Is- idore strict construction of the exemption of cemeteries, (p. 125) .IX (^8-8? ,qq) ,noid-.'.:sJtIejjp9 lo btso6 oioiJIc xs -7- (d8 .q) .flolaairiTiico xsj- si-^^a i)oaoqoiq -8- sensoil Ifii/r.ns boB easl snilxl 9rl;t lo secsionl (£11 .q) .anoiJjB'xoq'ioo no esxEo -e- -Tsd'nx ni i>9au lio IsjjI no x«c^ srid" lo saBsionI (6SI .q) .noll^a isq 8C^^^90 es-irfJ- cd" aertianQ noi^swcfmoo Isn -CI- ^d^rujoo ax;oii-£;T \;cf i)63i,Grfo eee'i oxiJ' Tto eejDSionI .aniniB;tejja-'il9a aaoil'to s^sri* 9>[fiffl o^ cfn&ioiHue 6901*^10 {^XI .q) -IX- I9l)nx; XanucfiiJ- •\cjBwri§i:rf b lo inesmletld&ieQ griT etom gni^x/oga lo 98oqiiJq odi lo'l ^namj-T£g9^ \;j3wrl2ixf 9rW •^^Bwilgixf grid- 9cfeIoxv oxlw gaoxll iar.i.s^& aoiios euoio'glY (SXI ,q) .W£l -ai- -gauoxl ot aox.iq_!issxQ Isnoai£»q sxid" lo noiiotiiaefi {^SI .q} .XgiBqqjs IjBncangq bos eboo^ bicxf -Si- lo noxJr.cBxs grid" lo noid'oxxiJanoo J-oxTd-e eioll (eSI .q) .agi^rsd-smgo 12. -14- Regulation of the maturity of bond issues in accord with the life of the improvenent financed thereby. (p. 127) -15- Program of reforestation through tax adjustment. A constitutional amendment probably v/ill be necessary to secure the full benefits of this program, (p. 117) -16- Extension of the jurisdiction of the department of public works to all motor vehicles using the highways, and the adjustment of the schedule of fees to a level that will make this division of the department self-sustaining. Consideration of a gross earnings tax on cominercial motor vehicles when all have been brought under the jurisdiction of the department, (p. Ill) -17- School Finance, (p. 88) -18- Discussion of the taxation of intangible property, (p. 133) -19- liemorial to Congress on the following subjects; .SI ni asirssi hnocf to ^tt'xsjisa edi lo noxd-f^IirseH .^cfa-xsxiJ- b&or-i;!!!! Jrisraevoriqiftj: orl.^ ^o ottL edi dilv^- bioooB (VSI .a) -51- .J-naiii^sifGhB xs:? rlguoiifi noiu-.J-aQio'isi lo i:y;ij30i1 oJ" v-t-sBRSosn 9cf Iliw Yld"£cfoiq cfri'jiTLbnsfnjs IsnolJ-jj^id-Rnoo A C^Ll .q) .rasiaoic eixid" lo ad'l'isnscf Ilwl srij- snjjose -61- ineiaitsiciQb artt "io noii'OxLei'XJJt erij "io ncienaixZ ,a\!;BV/xfs-t^ ^-i^^ gnieu esloirlsr loJ-oin lis od' e^tovi oilcfwq "io ^j^iii- Iov3l £. oi 83o\ iv 9lJjI)GrIo-? orlt 'to dTcsfit^tayi,^)^ orTd" iinjs .^ciiaiB^Bise-'lloe unacsiisqeb adi Io noxsivii) aidi ojubwi Ilivr iCoom IjBXO'X9i;ifiioo f£o xj3Cf agnxn'Xi^s asois s Io nol^^tobiaaoO noli oi.be i'liJl tdi lebau id-^uotd nsscf svex£ lis nsilw asloirlsv (III . q) .i'nsiixd'nf.qs/j arlJ- Io -VI- (88 .q) .sonfinll Iooxio3 -81- .■^CJi&qoiq alcTi^m^.onl Io noiis^XBi edi Io noieax/osiCI (SSI .q) -GI- :aiosi;Jue sniwollol 3x11 rro aeeisnoO oJ^ lisiioxaall 13. (a) Supporting the proposed amendment to U. S. Federal Statutes, Section 5219, relating to the taxation of national banks, (pp. 74-75) (Id) Supporting the proposed amendment to the feder- al constitution to prevent further issues of tax-exempt securities, (pp. 152-160) (c) Urging the federal government to relinquish the inheritance tax for the use of the states, (p. 163) Introduction of a gross earnings tax for tele- graph companies. (P. 71) -21- Centralized assessment of the property of all public utilities by the proposed state tax commission, (pp. 64-66) -22- Introduction of a mortgage recording tax of fifty cents on each $100, to apply to all mortgages in excess of $1500. (p. 116) -23- Revision of the brackets of the inheritance tax with a view to increasing the tax, (pp» 131-132) .SI .8 .U oi irieobnaas I>S8oqcnq sdi SnxiioqquS (s) noliBzzBi 9xij o^ ^nzislen ,QIS3 noiJoaS ^e9iui£.tB laisbsl (5?-*'? .qq) .8:in/;cf lenoiJ-isn lo -i9l)sl oxfj- od' JnombnstoB bseoqcic sriJ- §nl*ioqqxj?. (cf) iqiasy.e-xr^i lo aex/aai isrTJij;/! ^^nevsiq oi noJ::fi/o iJ'snoc le {CdI-S3I .qq) , asx^iiijoea rfaiupnlls^ oJ- d^nscmiavoa l£:£9l)e1 oiii gnia^tU (o) (Cdl .q) .eeJ-^d-a sriJ^ *io S20 srIJ- lol xe;J don.sd-iisrIni axij" -02- -9l9d" nol XBt asnirtai^g seoag s to rLoliouboiicil (IV .IonI aiols'iofW il .^Ilsoxcionoos Y^^'^^cii ate 9iora i)aa loblo iloxxlw oJ- iswoq anx^.sq xjsj lo Txovioasi ,339003 Qvsd astsija i^xfJ'I^aw ioi)njj nsad" evs^ri sv; noJ"3nxxleBW ax , 32 9l9xl;tiev9K •niavos iDSsxrifiaTLo lo aaxonoga axli' snibxvoicx 'io "'jd'icseooan srfd' evxanailei^aoo a no noid"ssxna3io Ifiiooa nisbora lo baa d^nsra 9rio lo leatoo y,13Y3 oi abnaJxe ms^e-^s looxloa ijjO •sL'bos aeiJ-ilXDBl 39o.3lq ^rtsxa al bebtvota evad 9vi baa .ed-is-ts -ha ad bluow Aotd?j aoTibLido vrs"! b lo noiJ'.'i;oui)9 ed& 'xcl -IJjbfi on 10 Qlti^ti ^G atsdmsja 19313! lol siso ot jiaups -Ixngsni b dttxi 9J-J3d"a sricf figisvoo avm sW .J-soo leaoi* lo 39lxrf[ lo Qbsibnud ,s^s?;rlsxxl I^xisj-is lo msd'a^B tasoi. ai/oxiav nl ,3J"oxiJaxI) JbsId'J'ss ^^looisqa aaisvjsiJ- rfoxirw oxicfjjq lo 9iU339iq sdi -^cr ,i)93xIcfo noacf ovsrl sw a^-'sw igxfcfo -d-i'i9rani9V03 9eoxi« aJaxYoij oJ ,39i'.xxJ- 3di lo tliii) Lrts noxniqo n99wd'9cf 9on9i9lliJb gffJ- lo d-aoin 9:j£j3m xloirlvv aglJ'XIxo^l Is oi) oi haa ,3ltL aiaboiO. aXcfstiolnioo baa anoxi'xbfioo isanojtq •^I9vxj-i3l9i J3 no baa noivfjsluqoq; llasis x^sviialQi a 10I axriJ- -rtsnxl IbdoI baz air.ta 9riT ,x£cMs9w aZdaxa-J lo axajscf Ilsnia lo oauBoed ^lo^xsl ,8Uoxiaa taeaaiq ia 013 easldonq Isio 9cr oi ^loJ-xiiaJ" Ijaoxeicriq auomiong edi aosvried ILw^ edi sxiT .a9oiiro?.9i aldaxat sldalLzra bsiitniL sdi baa b9vis3 16. tax duplicates of many cities in the East exceed the entire duplicate of the state, yet we are endeavoring to provide governmental services on a scale and of a xjuality comparable with the East, for an area of 69,127 square miles. The act v^hich created this committee indicated a definite problem to which an answer was to be sought. This problem is stated, in the terms of the enactment, as that of relieviiig real estate and tangible personal prop- erty of a part of the tax burden \7hich these classes of property are now carrying. Your committee understands this to be, in other words, the problem of the more equi- table distribution of the tax burden. This problem may be approached from two angles, both of which have been given careful consideration: First ; The more equitable distribution of the tax burden through improved administration and enforcement of existing tax laws. Second ; A redistribution of the tax burden through the development of nev/ sources of revenue. We have been unable, however, to confine our in- quiries v/holly to this rather limited view of the state's revenue problem. We have realized that the tendency towards .di ot 3niicv^3i)n9 sib 9w *3"<; .sd^sJa axiJ' lo 9;t.;otIqi;L aixjna iC^xIfiJjp -0 "io i)ft3 slsoa s no asoxTisa iBj^nsniniSToa 9bxvoiq 9i30p8 7SX,e'3 lo aaia as lol ,*asS 9£lt xiJ'iv^ oId'i5Xsqnioo ,59li:n .cJ-xf3iio3 od oJ- 3BW ■xawBiTS nx? xtoiilw oi* a:9ld"oiq si'lxii'iab a 3j3 ,d'a3xact-0Bn9 9x1^ "io arc-xad' sdi rtl ,i59J-c3-s gi oialcfoiq eixiT -qoiq lBno8i9q 9lcfX3Xi3d- i>rt3 9;tB«39 Izoi ^aivelLai lo :fsidi Io aoaa^Xo asedf doid^r .-tsjbiucf xnt odi xo d"iBq j3 "io xita abn~.taii)bau esi:iiaTr.oo luoY .anx'ci^ir.o won 91jb ^iJ-tsqo'xq -Ijjpo 91001 edi Io aialcloiq axl.-t ,ai)io'.7 loriJ-o nx ,off od" zLii ^em rasIcfoTt; airIT .nsJiija x-jJ- siW lo nold-ucfxii-aib sIcfBd' n99J ev&iL rioiriw lo rl^oo" ,33X303 ovt moii baxfosoiqqs yd :noxd-,'3i9bi3noo lifiaiBO novi.^ sd& Io noi.tiJdit&ai.b eldsttupe 910111 erIT i ^eill drisnisoio'ins bax. noid-3'iw''3xnxribj3 i)970'xq!aJt d-^:Jotdi' nobiud ::&} .av/Ail S'Ziit 3nxJ"3l:c9 "io d^isotdi aebiud x£S Bd:t Io noiiudtitBtbsi A ; bnoo9S .9jjrf9V3i "io 39oi;jo3 v/en "io iT)i9iaqoX9V9b sxicf -ai IJJ0 snxlnoo o.t ^iQvevrod ,9Xdx3nxf n99cf ov^'i 9\7 a'st-sJ-a siiit "io wsxv figcMinil lori^si slxfJ" 0^ ^XXoxivx aeiiixrp aijiBWoJ" vocisbasi 3d:f ^sidi hssiXasi svsxi gV.' .iHa.'cToia ai/navoi 17. further increase in the outlays made by the state and local subdivisions is steady and more or less inevitable, so that the question of the future increase in the total revenue needs cannot be entirely avoided. The full con- sideration of the state's future revenue requirements would ca.rry us far beyond the scope of the problem com- mitted to us, and we have undertaken no forecast of these needs, nor have vre deemed it proper to formulate a com- plete revenue program to meet the public requirements for an indefinite time, A thorough study of this larger problem vfould require more time and more ample resources than were at our disposal. Farther on in this report will be found some suggestions which look toward the de- velopment of a model taxation system for the State of Washington, REA^Eirus ITSBDS 0? THr] STATE AITI- LOCAL SU3DIYISI01TS : The first angle of our problem is that of the revenue needs of the state and its local subdivisions, and the manner in which these needs are being met out of the existing revenues. 1. State Expenditures ; The aggregate of taxes levied in the sta.te for all purposes for the years 1910, 1915, 1920 and 1921 is .vx ,eXd;5d'xv9al eaal 10 eiora brts ',if>3sJ"e ax anoxaiviijcfwa I.300I iBioi sxi^ ni ot?G9ioni otuJ-jjI edi to noitaeup Qcit i.Bdi os aJnsnaixijpai aixnavai aiiJ^'ul s'a^sd'a oil- "io noivt.GioIJxa -moo cialcfoiq ari^ Jo 9qoo3 srii bno^^ed I'-^/i sas ^tiso blA;o'Y saarlcJ" lo J'a.eooaol on ixaiLsiisbnxj avsri 9W hna ,su oi ^3i*ifli -0100 ^ a&Blatsno'i oi lacjoiq ^x bsaeeh 9v/ avsri ion , ahasn tcol sonsmeixupsa oilcfi/q srf* d'ssn 0^ niRiao'iq surxavsi 9d"oIq 1931.131 aiilJ" to ^ilJiJts r£3iroion.t A ,a.vli' QiiaiJebni. n.9 e9oawoG9i alqms sion bns eati 9ion 9iiJjp3i blwow ra9lcfoiq J":oq9i slxiu nx no isxid'iJB't .I^jaoqai:/) iwo d^.^j oisv/ riarij- -9ii 9ilj ij-rswoJ" iool iloxriv/ enoiJ' .193303 gnioa i)nuo'i 9cf IIx\y lo 9*^*2 9i{J- loJ. :aeiax^ nol^taxni laboci i3 lo ;^a9rnqol9Y .nocTgnxriafi?*' : 3^:ciai7 ia. ^U3 jaooj av j^ sdS lo J-siIJ ax ;-u9ldoiq iwo lo 913ns J-sixl 9x1? bciB ,3noX3Xvxi)ci'x;3 Xsool eii bm 9*.si'o ^fd) lo Gibson eun^vsz sdi lo cfuo iem ^cited 9ijs 3£)99n aagxiJ- xioxriw at ignnsn edt .s9iinov9i anJtJ-cixs ; 89lArJ'Xl)nsqx!I 9J'-::18 .1 10I aisie odi ni i)9xvc>I 39X£;f lo 9d-£39T33£ sxfT ai isei ba.H OSei ,diei ,Ciei aiB9^i 3d:f lol asaoqix/q 11.^ 18. shovm in the following sxumnarj'- tatle: TOTAL TiJUS LSVIED FOR ALL PURPOSES IN 1910 1915 1920 1921 State General $1,925,000 $1,302,000 ^5,407,000 $2,669,000 State Military 140,000 208,000 State Highways 916,000 1,588,000 360,000 236,000 3,004,000 2,966,000 State Education- „ . ^ *_ -.^.^ al 2,000,060" 5, 168", 000 State Capitol - - - _ _ - Veterans Com- pensation - - - - -,.»,,» 7,657,000 598,000 9,087,000 589,000 .-■,*,f, - - - 1,180,000 Coimty Total 4,785,000 _^ 10,275,000 . 16,249,000 16,468,000 School Districts 4,693,000 7,276,000 17,213,000 16,289,000 Ports & Parks -.^ „...- 403,000 City 7,034,000 8,822,000 14,107,000 13,412,000 Road Districts 2,175,000 2,699,000 Various Local Districts Aggregate Totals 125.000* "^ 2.150.000 5,640,000 4,102,000 1.116.000 1.600.000 S27.085.000 ^37.488.000 072.552.000 ^68.001.000 These figures show that there has been a steady, and in recent years, a rapid increase in the levies for all pvirposes. The greater part of this increase has occurred .81 lald^i ^risxncujs gniwollo'i s>di ni nworis til 3£801fiU^ iliLV HCyi QmVSj: 537^T JkTOT jsei osex '^loi oiei 0O,edd,Ssi; 000,?Oi»,a^ 000,30s «I$ O0O,eJ?e,I$ I^i&neO D;^£;t8 00,d£S 000, Od£ 000,802 000, OM ^t^;HIx!I 9*£*3 00.339,2 OOO.i-OO.S 000,338,1 000,3X6 av^.v/xls-tH ai^iZ 00,?80,e 000, V3d,? 000,861,2 000,000,2 La 00,«83 000, aea - - - - - - lod-JtqaO 9JJ3J'3 -xaoO aoste^sV 00,031,1 --_ --- --- nol^Baneq 00,8^^,^I GOO.ei^S.dl . 000,3VS,OI 000,a8V,t^ iBioT ^J-auoO 00,682,51 000,512, ?X 000,6\'2,? 000,563,* eioiisetL Xoo££o2 00,SOf^ --- _-- --» a:!iir>g: :& ciiol 00.2XI^,£X 000, VOX, *X 000,228,8 000,^50,? x^iO 00,20X,* 000,Ofrd,d 000,683,2 000,dVX,2 s:^oiiisia bsoK XbooJ swc iixsV 0. 003. X 000,dXX.X OOO.OciX.2 000. e2X Q^fott&Bia 9Cf.3391SSA OO.XOO.ed-;^ Q00.2a5.2Vr,» OOO . S-3^ . VS;:, 000.5SQ.V2& elsioT lol 39X791 edi at aasoioai blaBi j3 ,ats^-z *n909i ax ijos bsiijjooo asil 9aB9:toni airi* lo tisq i9^ssia ^^ .agaoqiixq XXs 19. in the second half of the period. This period, it should te remembered, has been one of rapidly rising prices, and the Slims raised by taxation reflect in considerable degree the grov/ing inflation of prices and costs. The citizen has found that the dollar of private income would buy less as prices advanced. Governments are subject to tke aaae economic law, and like the individual must seek such com- pensation as may be found in the period of declining prices. This increase is shown graphically in the accompany- ing chart. It will be noted that the total tax levies have receded somewhat from the peak year 1920. This corresponds with the general turn in prices and business activity which cane in that year. Public bodies, however, are not able to take full advantage of falling prices without the greatest alertness and vigilance on the part of all public officials. Economy and efficiency in government are plausible slogans, but un- less the whole body of taxpayers and public officials earnest- ly and honestly seeks to achieve these ends as the readjust- ment of prices occurs, the cost of government will not come dov/n. It must be emphasized that alertness and the .ei bluods ^i ,f)oii9c[ airlT ,boltoq adi "io lljsri i)noo9E ^d& at bn^ ,c90iiq[ ^nxa'ii Tili>iq£i "io ano noacf sarf ,b3t3ni odi 921II iinn ,w.3l oiciofiooa .aaoxiq -gninlLosb lo ftoiisq ai-iJ" ni bnuol scf \;Biri ss noxd'sansq --ijaeq.TioooB oxlv ni ^^Ilaoxilq^ia OTfode sx sasaionx aJ:x£T 9vsii a9iv9l r^i lBio& Qdt &sidi I)d*on scf IIxw J-I . .tt^rlo sax 3i>noq39iioo sxifT ,0261 'ibs^ ^Lssr sdi noil ;ts:iw9ino8 b9i)309i 9030 lioxil'.v i^J-ivii-os assniawcf bns agoxic nx nnuo I.?i9n93 oiid" d&tvr IliA 9^5^ o:^ 9las Ion 91/5 ^levoxtod .aaxbod' oilcfjj*! aB9aJ-i9L8 .tagj-ijsi-.-^ adi J'uoxfi'i'.T asoiiJ ai^-t-t-C-sl lo aajsixisvLs v^iaonooS; .alsxoxilo oilduq lie lo i"i.oq ericf no eonBligxv baz -n:j ;tucf .ans^ole alcfxeujslq ais ^n9cmi9vos ni '(^onoiuilta ine -j-asntjss aX.oiox-lo oilcfuq bns aig^/ijqx.'si' to vbod alorfw s.-'J' '-:?.9l -cfautbjsei ariJ' a.'-5 abns aasri;^ 9V9xrIoB oi a.^ose %;Iis9noxl bn.3 '{,1 9^00 ton Iliv; i-ng.Tinigvoa xo d"aoo grfi ,3'xxrooo aaoiiq lo J-near . nwob 9x£i i;n.'i 3a9nd"i9la t£xl« b95ia.^qxiie so' iv.ijsi: il 20. will to economize v/ill not suffice alone to reduce gov - ernmental outlays, unless there are also at hand the proper means for curtailing; the expenditures of the different de - partments. This control can be effectively provided only tlirough a budget system, v/hich will operate n ot merely to set definite expenditure limits, but to compel more careful husbanding of the revenue resources . A more accurate view of the character of govern- mental costs may be obtained if we analyze the state and local outlays from a different standpoint. \7e present first the expenditures of the state arranged according to the principal fixnctions of government, TABLE II . GOVSRIMBITTAL COST PAYMENTS FOR STATE PURPOSES IIT 1915 AITD 1919. ACCOKDII'G TO U. S. CEITSUS BUIgAU CLASSIFICATIOIT . Class of Expenditure 1915 1919 General Government I 362,956 $ 421,420 Protection to Life and Property 445,431 674,459 Development and Conservation of Natural Resources 297,638 451,579 Health and Sanitation 66,027 102,062 Highways 1,524,481 3,448,753 Charities, Hospitals and Correction 906,251 1,306,305 Education 4,038,711 4,952,270 General 316.165 271.253 Totals #7,939,660 $11,628,608 .OS -7 0}^ 90i/i>9i oi e a ol-o esix^ua don JIxw Q: x JO XaJnoaiffXP oJ \\L3iea ^o n 9J:3i 9qo Iliv/ iloiriv/ ,g9^a^s J-a^^-bJj J >'3 rij:>.uo'.aU . Bao iijosoi Bijnsvei 9Xl;^ lo anxjjnjgi-'ejjxi -msvo'a "10 teior.'z&iio odi lo wsiv gjsijjoo^ e-rom A i)rj£ 9d-£;^a sdt 9S'{.IijrtG 9w 11 bttni^jio ad \:sffl aJi500 Isi'nsm *n9a9iq sW .ir. ioqbns-a ^naiallib s uiorrl a-zsLiuo laool Oi' anibiooois ib9anfi::iB oisia sdt to asisji i.basqy:e sriJ" izitl ,&nsc\ai3roz to snoiioaut laqlonJtTq; oril . II gJ ^AT gTivTS HOV BTTf-HYA^ TSOS J;-.I;L' . _: 0^ ;■ .3 ,u 07 " TaOIT. - OI'II-38AJO eiQl dlQl e-ruj-ibngcrxa. lo sealO OSi^,ISi>' ,, jG^.Sde ^ cfflsmn-rsToO I.o-xorisO e5i^,^7d 15>,ai'^ ^ii•I9qo1Se,I 3Ysv;il3iK a05,60 birjow ^^Blq -^arW J-^sq eriJ- J-ag-xol oJ" asrax;* J-b henlloai. sis lis i'wcf aatuti.baeqyzo sj-scfa i^:!! 9afi3ionJ: OilJ' lot asau^o sjfT e njt aslvaJ! ad-BJa auoli^v srld- "io eorisd' at l)8^n339iq ais aidant eixIT .tioqs'x airCJ- Ovt xxbnaqqs adi ni bauot oldst sdi sonxa isex dOBs nx obBm aeival sj-s^si odi to ILs aevxy aaarlJ- ,6381 ,i.:?9\; *eiJ:^ 9di nz .boodeiBie lo anxiinigscf bas ;fn9nini9V03 iB'Xsnoa srlJ- lol saorfJ" - aaivsl owJ- '^Ino ^■x9^y ,al)noa aJ-si-a ao i'33i9i--ix lol .'cval bilxIJ- sxIT .^iiilxin odi .asaoqtuq loorioa ed-isd-a lol ^diiisot odi bn.z ,0681 nJfc babha savt tud ,SOGI letts iBQqqsaib aeLvel bnocf etsia sxfT .5531 nx sJ'ada IjsJ-oct sxlT .dOSI ni bohb.^ asw '^:al i^swxigixi oilJuq ij ni alliai Sd.S iaoi*i ^Il^ubi^^S eaoi aaaoqiJjq IIj3 io"! y^sI babsosi *i rloixlT; noit ,1061 nx allici Od.V lo atxjaq x; o^ QS31 XX3 ,Siei ni ,'X3J-3l 3is9\: ix/o'd .6091 nx alliii OS,^ oJ- jTCuivaiaixI ^n3n£ixins(I noTc , basil oiilus aiaw aaival iBnoxd-ibbB •^val aJisc^a I.'si'od' acid' bns .aaaoqixrq looxloa Ismion bna a3aIIoo 22. tegan to rise more rapidly. The capitol building levy waa added in 1917, the reclamation and revolring fund levy in 1919, and the Centralia normal school and the bonus levies were started in 1921. The total number of separate state levies has now mounted to fourteen, with an aggregate for state purposes of 14,639 mills in 1921. The story of these levies confirms the evidence of the above table to the effect that the principal reasons for increase in cost of state government are found in the expansion of governmental functions. 2. Local Expenditures ; Similar data for a complete analysis of the total local outlays are not readily available. In 1919 there were five cities with a population in excess of 30,000, and for these the United States Census Bureau published figures which were arranged on a comparable basis. These are presented in the following table: (Over) .ss brmt anivlo'/ai bne ^oi::^SIa3Io91 srl^t ^'\L^1 nl babbs p.sir &di bna loodoa iBraion mlL-^'iinsO odi bnr^ ,ttl"81 ni ^yoI ^c ladaua Isioi sriT .1291 ni bsiisia aisw a^xvsl ajjnocf • isei ni BlXira QSd.^I to aoaoq':£ifti 9J-£5;Ja 'lol 9*^30^33^$ ns aroa'a 9rft "io gonabiva 9r£i axniilnoo asivel asedi I0 -zioie arIT 3aB9io:ii 10't anoaJ59i IsqxonJticr sriJ' cJ-^ri^ toetle srlt oi" elcT.^i' lo noien/3qx9 Siii- ni Jani/ot 91.3 i ne^im'iBY o:g ^iaia "io J"aoo ni ♦ enoiJonul Ij^d-ng.-an'xeT-os ; 8 9 1 Jj ;t Ibnogx a lis 0^ ,S lai'Oi' 9rii to alexS-saa sJalqirtoo « 10I a-^sb iJ3liiai8 Qiodi 9X91 nl ,9LdsllJsvB TtIJti)£3i cfon 91b a\;BlJ-uo IbooI ,000, OS ^0 2fi90X9 xijt fioi^irXuqoq jb ."iJiw aoitio evit 919-^ bedatldijq usqiuS. swanDO aetr^&B betinU Qd& osedt lol baa 939rfT . aiejBCf sXcfisijaqiaoo xs no b93:iB'iia 9i9v/ iioixiw ogiu^it laLdsi ■gai.vfollol odi at boi^ioscttq aia (l9V0) 23. TABLE III . ANALYSIS OF GOVERmffllTTAL COSTS OP FIVE CITIES IN 1919 . ( SEATTLE. SPOICAKB. TACOIilA. EVERETT. BELLINGHAM .) General Government ^ 1,470,000 Protection to Life & property 2,578,000 Health 376,000 Sanitation 897,000 Highways 1,288,000 Charities, Hospitals & Correstion 506,000 Education 4,789,000 Recreation 380,000 Miscellaneous 60,000 General 218.000 Total - $12,562,000 It appears from this ansilysie that in these cit- ies the total cost in 1919 of the primary functions of government, such as the operation of the general govern- mental organization and the protection of life and prop- erty, was $4,048,000, or slightly less than one-third of the total outlay. The other two- thirds, or more than $8,500,000, v/as spent for various purposes which may be characterized (broadly) as the social functions of modern government, such as education, highv/ays, the promotion of health and sanitation, recreation and similar objects. ,es 3T8 0D JATTigk.TIfljrOG 10 8I5YJAIIA '^S.l'L I'll SEITIlT aviI '^0 000,8Ta,2 -^cfiaqoiq: A 3'liJ. o:f nox^09:ro'Xl 000, d?£ dil'-ioK 000,768 noiliJcHnsS 000,88S,I a-^c-.rri^iH 000, dOa noi-aeiioO ci aXfi»}-iqaoH,s3l3-li£rI0 000,*?8V,* aoiir.oubZ 000, OSS nol*39i09H 000,09 3U09n-3ll9oail£ 000.8IS XsaenaO ooo.saa,?^!^ - x«ioT lo anoitoaul vismti-z sri^ lo 9I8I ni *300 Ixi^JaJ- 9xi^ 3DJl -ni9vos I^i9«93 9x1* lo nolJ-.ei9tjo srtd- ae doue , ^ngoui-xeroB -qoiq; hOB sliL lo noxJ-oaJoiq sxiJ" has aotiszitiQ^to I-s^nsm lo bixxIi'-9no xisxIJ- aasi ^IM^xIs lo ,000,8^0,^$ as'.v ,^;tr£0 aisxiJ' aioni io ,ai)iJ:xio-o\vJ' 'iQiiJc griT .T^Ii"uo I.Tj'oi' edi 9cf Y-sni xloiiiw aaaoqiuq euolxsv tiol J'nsqa asw ,000,003,8$ n-xsflon lo anoxi-oniil Isiooa arf* aa (^Ii)BO'ia) figsi'ieJoaxsrCo lo noid'odoiq 9rft ^av^avidsid , iioxd-BOxr.b9 ea doua ^tasranzevo^ .3*09i,d"o iclimxa boB noiicBio&i ^notiBiznsa bae dils9d 24. We are not here concerned with the question of the degree of efficiency and economy which may be attained "by these cities in the performance of the various activi- ties which they have undertaken. The fact remains that in every modern community there is an irresistlhle demand Lj .*. *-■ "^ fhat these activities be undertaken, and governmental func- tions are expanding in response to popular pressure. f^ ,. ^ These expenditures are valuable and necessary for the general welfare. They are for the social acti- vities which have wrought the transformation from the raw conditions of pioneer life to the highly orgeuiized social life of the present time in the great northwest. These activities, however, are less fundamental than the prim- ary functions of government, such as the maintenance of public peace and safety, and the protection of life and property. If severe retrenchment in governmental costs is to be undertaken, the greater part of the reduction must occur in the field of the less fundamental governmental services, that is to say, in the social activities. Those Y/ho demand that severe economies in governmental cost be introduced, should realize the full significance of these demands . .^s -Ivttoa auoiiav sdi lo doaaiaio'tisq adi^ at aai^io oesxl;*' ajcT isdi anismai ^oal sriT ,nd:i3*'i9i)nu svsii veri;t rioiilw aai* i)nj3xn9l) aldtietastti as si s-xsrlJ 'iJ-inwrrmoo nisbotn. yi9V9 iii -oniJl Ie;tnsnni6yo3 bas ,n9:i6d"i9bnu 9cf asiJ-ivlJ-oa gasrit J-Brfl ,9iua8©iq njsluqotf 0* senoqaai nl jialJ5nB(jx9 s-xjs aao£;t ^iBaaaoan bn& eldaulsr sib agauJ-ibnsqxs 9s&iiT -i^os lai 00s arlj- 10I 9is y,Qd!j: ,&tBll6if Isignsg aiii^ lot wei Qiij' moi't noid'isiirio'ianBiJ" 9xiJ iriguo'vn avaii rioirfw a9Jt J- ir lajtooa basJtxtasno '^Ixislxl ©rid' oJ g"!!! iggnolq lo anoiJ-ibnoo 9e9x£T .J^agwrid-ion stasia orid" ni 9iaiiJ- *n9a9iq &dt lo etlL -iniiq srf:)' sxBdi LBinQiUBbaul aaal g-i.-s .lovgwoii ,89liiYtio& lo 9onBned-aJ:sra oxfJ- as jcioua , J'agrnmavoa to snoiionut •'^is biiz etll lo noid-oaJoiq 9ifj- bns ,\:;t9'isa iirtB 90S9q ojticfuq aisoo lBjn9mni9Y03 ni J'n9niffon9id'9i 9i9Voe II .^J-ioqciq iauia noid"OiJi)9i orl* lo tisq igJ-jjaig aiid' ,n9}teJ-i9i)nx/ 9ci' oi ai Isd'n9xarii9Voa Iai'n9fli8i>njJl saol itdi lo bl9il grief nx rruooo ,89x;fxvx:roB lajtooa gxit nl ,Y^e oif ai J-jbxIJ- ,39oi:vi98 ni. a9iaionoo9 9a9V9a &Bdt hnam&b odn gaoxiT LLisl edi esllsi^t blsjode tbooubotiai 9cf 3'aoo IsJ'n9rani97og • s ^ iinai&b 93 9rLt lo 9onjB O.t lxnt^l a ss. In view of the rapid increase of public caapend- itures, and of the fact that the bulk of these increases have been caused by the great expansion of the social act- iTities of government, it is equally necessary to empha- size the importance of scrutenizing with care any proposed further extension of governmental functions. In the flush of enthusiasm for new projects the public is often disposed to overlook the fact that these new governmental undertak- ings inevitably mean heavier taxes. A sober consideration of this increase of burden should precede any further ex- pansion of governmental functions. Whenever possible such expansions as are absolutely necessary should be accompan- ied by the development of new sources of revenue to cover their cost. RE'^/SIIUE DERIVED FROM EXISTING SOURCES : As another phase of our preliminary survey of the general financial situation in the state we turn to a sunBiiary of the revenues derived from existing sources. We have made no attempt to strike a balance of income and outgo. In the above section we pointed out the chief causes of the increased expenditure. Here we are survey- ing the leading sources of the public revenues. .3S -bn&qaa oilcfuq "io aaBSioni: biqsi edi "i-o wsIy nl -Jos Xalooa eiii- 'lo nolansqxa i'B9i3 9x£J i^d i)9auB0 iieed svsrf -j3rfqK9 0* ^p.33S09n ^^IlBJjpa 3i J'x , JTisniniavos *o aeiilrt. b9eoqoiq X^g 9Xso lifiw ^nisiasiinoa to sonsi-ioqfrai sxl-t ssio dault ^di nl .anoii"onu1; Isd'neiianisyoa lo noi:an93'X3 i9rIJ-iiJt bgaoqalb rtst'ic at oilcfucv ariJ- 8*09^015 v/sn lo'i aawiauiid-no "io -i^Lsi^'xgbnjJ laJneainiavos v-'sn aaailj' isxi^ j-o.al eiiJ- aLooItsvo o;t noi^si9bi8noo locfoa A .aer^i lairasri nasm x-tJ'fi^ivsrt-t 3gni -X9 todtiul Y:as gbgoaiq biworia aebrud to sassTonl clrlJ- lo doua 9lcfiaaoq lavonaift? .snoiJoniJl I;5;^n9nfti9voa lo noianaq -nsqaoooa 9cf bluoiie -^saaQoaa •^iQd'uIoacfij 9:ib aa anoian-Bqxs 19V00 oi 9un9V9i lo a9oniJ03 W9n lo in6Jiqol9V9b s.'id" vcf bal ,iaoo liedi : a^DflUOS m£ lo -(Cgviifs ^tarilaiila'iq iwo lo 9aBriq isdions aA od- niJjJ 9w g^aja 9n^ at aotiBUiia laionanil laiengg sdt ,?.3oivoa snid-elxg iaonl b9vii9b 89Jjn9V9i edt lo "cn^i L-nua a b«a 9jnconi lo gonalacf a 9AiiJ'3 0* iqni9J';ta on 9bara gvari 9W l9irIo grit :tjjo bointoq 9w noiJoga 9vo:£:)' IbJ-o* srfl lo noi^tioqoiq ©aisl sifJ .^S.S? 8SW exrtt ISQI nl .^i'noqoiq ^cf an'iocT ai tsri^ ^nem nl .no^^niiiajsV/ o^ ir.tluoeq ioa ax notfauita alrfT ,bnuo1 el asxjsit nl aeaoqtjjq ei^ia lo'l aeuaovei odi lo ^7.?3 beouboiq XBi >,I,e8 10 .asunavsi L-sooI sri* lo ^^3.86 has ,1£QX ^'^^^ 3^^^ erf* .nianooeiW nl .aaaoqiuq Ilfi lot aeunsvei L£,ioi axit to 9££* to ^?,08 ,OSOI lol beoufjoiq ^iJ"i6qo*xq Isiansg no aaxsJ- seoxiJ- iii n9T9 J-srii d'nsbira si *I .asaoqiuq Il3 lol Isi'ocf lierfi '10 asansrio bei)xo8i) Jaota srI* eb&m. e-7Bd rCoxrfw ssJeia Tja' ZLtie si cXBnj8 sxxi- eus'iuq -^iBci 9V7 9££* od" asx.'sJ' "^^'^^1°'^^ 9^^ "^0 noilucixni'axi) edt gnininiExg 9onio noxjirixiw si.b orfT .^^laqoiq lo csoa^slo d'nsia'i'iib ,noxaajfc:i2ioo :tBi ocsic. oiH lo a;tioq9i 9x11 ^o rtwoxia a.s ,Aiex 28. has "been as follows: PERCEJTTAGE DISTRIBUTION OJ TAXES TO DIFgPJRElTT CLASSES 03? PROPERTY 1914 - 1919 Classes of Property 1914 1915 1916 1917 1918 1919 Railway Track & RigHt of Way 10.70 10.46 10.53 10.47 9.71 9.60 Railway Rolling Stock, etc. 1.49 1.53 1.57 1.58 1.43 1.40 Telegrapli Lines <&: Property .04 .04 .04 .03 .03 .025 Telephone Lines & Property ,53 .64 .67 .68 .68 .646 Street Railv/ays 1.73 1.69 1. 62 1.60 1.79 1.56 Total Public Utilities 14.49 14.36 14.48 14.36 13.64 13.245 *A11 Other Real Property 72.90 73.46 72.32 71.79 70,33 69.50 All Other Per- sonal Property 12.61 12.18 13.20 13.85 15.53 17.27 100.00 100.00 100.00 100.00 100.00 100.00 ^Includes tovm and city lots, farm lands, unim- proved lands, timber lands, and all other classes of lands. The actual result of the assessment and equali- zation of property since 1914 has "been to decrease slightly the relative proportions of the taxes levied on public .32 .•awollol as nsacf aj3rf THSIOfll ^'0 SSs aAJO T^AlS/^il ia OT 3SXA.T 'd:o ViOITUglgTSlg S OATTIEOfigiq: gJ9I - ^15 1 exei 6 i£i vit-i die J ciei mci Y^^tscronq: oa.e IV. e vi^.oi sa.oi s^-.d ot.oi ^bw io cfxigiH SnilloH ^^jswIIbH o^.i £^.i ee.i ve.i ce.i e^.i ,oi^' .xr^o*? esrilJ xic[£as9-CQT aSC, 50. £C. i^C. i^C, ^0. 'C^ieqcTCl £ aenij snorlqsIeT d^d, 8d. ad. Va. kd, Sa. vd-isqciq: ^^ 05 .1 6 7.1 Ce.I Sd.I ed.I 57., I e^^BwI IsH *9 si;t8 oxIcTwl Isd-oT aAo.ci ^3.51 ds.^^i e^.i^i ee.^i e^.^i asicnixcfu oa.ea ee.c? ev.iv sc.sv 3^.e7 og.sv ^ic^-xoqoi? -isq isrf^tO IIA VS.VI Zi,dL _Qe. lI OS. SI 81.21 Jd.SI \.izeaoin£ ,0291 nl cex£i io^itb .t?OV bni3 i{dd nesx^ied bsiiiso ecd "^iisq^oiz l£9i -lib moalt eetrnovsi "io aolji.-dli&8lb gnlwoIJol: sriT lol a9:{jj£wIJ:.T "io \iio qM 'lo'i iieJ-ioqsi e&w eaoijjos d-nsrioTt :C2ex bne eiQl aiJBD\; eiiJ- .IV EjaAT csei sunsvaH ,a2DIUAV/JIK WI SiniiiYSii '50 saOflUOE csei CIGI IIQL ounsvBK e>un9V9fi swnsvsH e.va 8.2 C.d C.8I 818,565,21$ f-.^e eie,eei,3$ :cbt I6a,dV0,I s.e ede,d02 xt.T sc^oonl V££,VII,I s.e SeJ^.IVS 9i;n9V9H 19*jbW 111,8^2 ^.e dCO.SIc assnsolil eve. ^81^. £ V.es iee^VC|k^2 8i;o9nEll9oexLI C.OOI 868.26^.81$ O.OCI SCC,V8l^,e§ - li^cToT 'anssx^t-iO eili y^d bsuaat .mslcfortq xcT a '99Jlu£Wlxli .isei ^QB:lU£^lil! lo ixesiuS 30. It Is apparent that the relative distribution of taxes to different classes of property in Washington is not greatly different from that which prevails in other states. We do not mean that this burden is not a heavy one, nor tliat it is a situation which does not call for study and possible correction. We cite these figures to show that the state of affairs complained of is not confined to Washington. There can be little doubt that the present prop- erty tax burden, the country over, bears witli greater ap- parent weight upon all classes of property on accovmt of the serious effects of the general business depression of the past two years. Business activity has greatly slackened, ajid rents and incomes have declined, T^ile taxes have remained fairly constant because of the com- parative inflexibility of public expenses. For example, the city of Seattle bore with patience the tax load of three to five years ago and in addition the tremendous burden of special assessments created by the local improve- ments then being paid for. Business at that time was good, and the tax load was not then thought to be an op- pressive burden. Business is dull now and the tax load is oppressive in consequence. We have suggested that the tendency toward a .0£ noi-anixiaBW nl \iieqoiz 1o edv.a&lo insielllb cd" f;e:cB^ lo •i9dio ai. ellavQiq xioxiiw tadi coil d-nsna^'iib \;IJ-J39ia ton ei ^J39rf .6 ^on si nebiua sixW oJ3i{;t nco.T- &oa ob 9V7 .astaJ-a Tcol IIbc cfon asoi) rioiiiw noxiei.'J"J:s a ai. il iBtli ncc ,&no soiirs-fi 'jss^j ©^lo sV/ ,noiio9inoo elcfioeoq Jbrus ^Jbw;ta *on Ei lo beniclqaoo a'iis'X'is lo B&r.tt edi is-sli woxle o^ .no^gaJtrisBW oJ i)9niT:iioo -qoiq JnseeiQ 9di intii tduob el&itl ad nso s'lvax -qr- isJ-jsais x&iw ai.Rod ,isvo \;id'niroD tj/f^ ,n9Jbii;;cf X6i x^'^^ Ito cffu/oooa «o ^ci'isqoi4i 'to eoeei;.Io IXjs rioqi; d'rifeiow ine'iBq noicsaiqsi) aaeniajjd lisieneg sxil to aioeYzs Bvolt^e edt \ltBei2i Bcd xiirttos eeQr:Lou3. ,siiioy, cwi ia^q eiLi "io olirJw ^beciiloab sTsri esaooni bos 8;i-no'i. £)as ,i>ens2iOjBla -xaoo arf;}" lo eBUJsoscf ^rx^anoo ^IiIbI i)eniBffisi sveii esxsd" .slqmexe lo'i .aseneqr'CS oilcfuq lo '^;tilxcf ixsllni svii'sifiq lo JbBoI :c£j- edi sonsi-jsc iIcMw iiocT sld-ixssa lo x^io edi Buobneasii srtj cioiiibbsi at bas ogij eissy svil o* estdi -svoiquii Icool edt xo beiBsto sJnec.seaeae i^iosqe lo aebtudi eevr sniii iedi iz ee&aiauL. ttoJ. biicq anxscf nodi eia&a -qo n£ 9cf ot td^uodi audi *on asw bBoL XBt edt bas .Jboos b&ol X£i 9di bas rioa Hub ex segniam .n9Bix;J srisesiq .9on9ijp9anoo ni ©vlsesiqqo ex X5 bi&v/oi ^^oaabaei edt is^dt beiae^^ue evjsd 97/ 31. still higher cost of government v^hich is now so universal may continue for a time in Washington. Whether this in- crease, if it occurs, will press more and more heavily on the taxpayers will depend upon the relative growth of the wealth of the state, and the degree to which the pulalic officials, state, county and local, are able to introduce higher standards of efficiency and economy in public af- fairs. \7e are glad to be able to say that at our public hearings little evidence or testimony was offered to show that public officials are careless, indifferent or inef- ficient in their administration of the public business. On the contrary, citizens often spoke of the high quality of service given by many of these officials. We have been impressed, however, by the extremes to which the multiplication of local boards, levying bod- ies, and tax-spending agencies have been carried. With- in the county there are the municipalities, the school districts, road districts, drainage districts, and other local improvement areas, and in some are port and harbor boards. The cost of local government has been unduly enhanced by reason of the vast number of overlapping tax- levying and administrative boards. A reasonable reorgan- ization of the local government could be effected which would safeguard the popular interest in local autonomy while it would make ■oossible considerable economies. .IS Ijsaievlnu oe won ex noirlw iaetrsiiero^ "io ;taoo is£Js,ir£ ILLia -nJt eixlj" n9fI;^^r£\7 .noJ-gnlrlesV/ ni erniJ J2 lot ouaic^rioo ^^ism no ylivjDSii siom i)nB snoc. sasiq Iliw .aiuooo Jx 11 ,s8£Q'xo siiJ- lo iid'wonjj ::viis.lei erli noq^u bnaqeb Hi?; atoxsqzzAi srii olLouq sr^i- xloi:x£vr oi ost^sb atU bm^ ^Q:lr.ie edt tc liile.oxi eoubcxiai: c4 sicf.o srrs ,IjbooI bus \;J-nx;oo .s^sie .elsiox'ixo -xB olIcfi;q nx T^conoos hnx: ^onsioi'jla lo 8i3ial)nx»;t e Ttsiigjtxi oilcfjjq ijjo J/J J-jE3x£d" -^^£6 oi 6l6s) 9cf oi ^jslg 5>ne 9T,' .oiIbI woxfs oi bsielto esw ^nontii'GS^ no oon&btvs eLtill esnxifisrT -lani 10 iatis'i'ilbnL ,33ol9iao sib elBioi'llc cxla'uq isidS .eeerilewcf ollduq srid" lo noxi'^ni-ainifrJjs Tlsxf- nl J-nsloil ^*ilBWp rigxif srld- lo Sifoqs naJ'lo enesiiio .yubi^ho: riilj nO .alBioi'i'io ecoricf lo y^JSci yd nevig eoxvise lo esctsi^xe ©rid' ^^ ,n:sv3v;or{ ^hecceif/jni nsscf ovjbxI 9\v -bod ■^atyyel ,p.bisod JLeooI lo notiszoilo^L&lua. 9rl.t rloirfTT od- -rictr»7 .bsiiisio tioeo sveri sslongjsB snlbngqe-xfiJ btm ,3ex looxioe srfi- .asx^xlBqioxniJBi oxio 91B sierlcf ^inwcc orfi- nt lerlto bnB ,edoi*rd8Xi) 93Bnij3ih ,sioiiisib bso'i ,cSoitieib todtBd biiB iioa sib ©nioa nx -brie ,8fi9nB tasxiQVGiqmi. JjzocL y^lisbau nsacf aeii d-nsfiu^isvog Isool lo d^eoo 9XiT .3£»njBccf -xst snxqqj3li9V0 "ic nodnujn ieev oxiJ xo noaB9i \;cf issoxiBxins -nesiosi sIcjsnc8S9i A .Bbiuoo ertisiietaiD^IiS hr.r^ Snl^/jvaX bijjov; rioiriw i)9;to&1t'i9 9cf blxj-oo i-nexonisvos IjsooI sri* lo noxJ-BSi J-x sliriw ^onoJUB Leool nx desigJ-ni ijBlxiqoq 9ri* bisis^elEe ,39imonoo9 9lcfiTT9i)X3noo eldxaeoQ &>LGa blvoyi 32. CHAPTER III . SURV3Y OP THE WASHINGTOIT TAX SYST^iSI . 1. OUTLIIIS OF THi!] RBVSITUE LA\7S : The trend of public expenditure is, as we have seen, toward greater outlay. This trend can only be counterbalanced by greater efficiency in governnent or by the curtailment of public functions and the reduction of the social subdivisions. It is highly desirable that economy and efficiency should prevail, and it is of the utaost importance that each proposed,, extension of govern- mental activities should be scrutenized with great care, especially in view of the steady rise of tax rates and tax burdens. It is improbable that any radical retrench- ment will occur in either the range of governmental acti- vities or in the level upon which these functions are now being financed; and the fundamentally important problem becomes, therefore, that of the more equitable distribu- tion of the existing tax burden. This distribution is determined by the kind of tax system which is in use in the state and by the manner in which the taxes are admin- istered. There is general complaint that certain classes of property are now carrying an undue proportion of this burden. The basis of this complaint and the possible lines of reform can only be understood from a survey of the tax system and its present administration. .ae . III fiH IT^HO • H!LT8Y8 XA T TxOTt OIxIKc.AV/ 5iHT ' EC YiT/HUa 'SCO EKIJTUO ,1 evsrf 3W es ,ei: eivttbneqxe oildi/q lo f)nei;}' anT 9cf Ylno HBO fcnei- slilT ,y,^Liuo isicei-^ biBvioi .nsss ttoiioubst etii bne anoi^onul ollcfuq lo ^nsnlijed-iuo srI;*' \,cr icrii eldBii&eh x^ri:^i.d ex *! .anoJtaivJ:bc'"x;e Xelooe ©rid- *io 9x1* to si. a bnB ,IifiV9iq bluorle YonsicJtl^g ^n^s T^ctonoog -nrrevos ^o noieneJ-xa i>9aoQorcq rioiss d'jsxfJ' eor.sitoqml ieopJu ,9ijso ;)'esaa xij-iv/ besiaeimos od £»IiJoxla esid-ivi^oc liBdT.eta bojs e&t&i XB* lo sell xbJieie odi to weiv at xllsiosqes -lions-xd-oi IcoibBi \;nB Jaii* elcTjBdoiqmi eJt .tl . ensLiud x£i- -iJ-OB l£*noxiuii9V02 "io esasi axiJ if^cile nt ijjooo Iliw *n9in won siJB gnoxc^onul 9C9rl;}' rioiiiw noqiu.' l9V9l arU ni ig eoiJ-iv ffisldoiq d"ni3;fioqflTl xIlBJnsELBbnjjl od* bna jtsonsnil s^-tscf -jjdiid-eii) 9lcf«d-J:up9 sacra sxfJ- Ic ;f£;r[d- .eioleisxii- ,aor:toosd' 8Jt not.tL'dii.iatb eJtilT .n9i)iijd xst gnii-eixs axiJ- lo nolJ- ni eex; ni ei xfoixiw me^e^a iie* Tto bni:{ 9Xii- x6 banlLiioit&b -nhabB eis^ ee^tsi exit xfoirlw ni rtgnnsxa 9xi^ xd bnB siaie eri^ 3988^10 [it.f:JiQO i£.tii *nifiIqcioo lBi9n98 ei 9i9rfT ,betBiat eidt 'io noidicqoiq 9i;iinjj na 8niYiti£0 won 9is XjJ'isqoic. 1o eldinaoq arid- iixie inlBlqiaoo airii T:o eiasu' sxfT .a&biud Io Ysv^ci/e B Moal bcQietebau 9d Y-Cno nao mio'isti lo eer.il .noi*£id'ei«ixiiIjB ;tn3a9iq e^i bns meisxe x£t edi 33. The basis of the 7/ashington tax system is the general property tax, which is prescribed, by Article VII, Sec, 1 of the constitution. This section is as follows: "All property in the state, not exempt under the laws of the United States or under this Constitution, shall be taxed in proportion to its value, to be ascertained as provided by law," Section 2 contains the further provision that, "the legislature shall provide by law a uniform and equal rate of assessment and taxation on all property in the state according to its value in money and shall prescribe such regulations by general law as shall secure a just valuation for taxation of all property, so that every per- son stnd corporation shall pay a tax in proportion to the value of his, her, or its property." The law now requires that all property be assessed for taxation at fifty per cent of its value in money. The assessed value of real property is to be fixed in ev- ery even numbered year, and such property is to be assessed and taxed in the district where the same is located. Per- sonal property is defined by the statute as including "all goods, chattels, or estates; all improvements upon lands the fee of which is still vested in the United States or the State of Washington, or in any railroad company or corporation, and all and singular of whatsoever kind, val- ue, nature, or description, which the law may define or the courts interpret, declare and hold to be personal .55 Qtit ex nsJ'a^e x-bJ' nod-jiiixfesW srLt "io exaecf arlT ,IIV sIoJtJ'xA -^c" ^scfiiosoiq el lioxifw ^Tisi ^J-isqoaq Iei&ns3 ;awoIIol BiS^ at nox^osa eixCl ,nold-u;ti*anoo i^t^-t lo 1 ,09?, d-qinsxe ^on ^si&is sxtt nl ■^^isqoiq IIA" oi aoltioqoiq nl ^exB;t sd IlBxfa .nol^t'xJ'iJ'anoC' ,*er[;)' noJteivoiq ^sriJii/l srlt «nlx3;tnco S noxi'oaS l£up9 bruB cnolinxf jb wjkI "^d sbivciq Ilaris eii/^Blaig?! erid"" sxif at y^izsqcic LIg no floJti'isxB;^ brus. d'nsmsaeaax: lie eJei Qciioaoiq Hade bnz ^enojt ni suIbv sit oi ^ntbiooos GiBia iBUl a oiuc&B IlBds ee Wfil Isionss \d anolJ-j?.Ixr39i rioxre -loq Y'lovs ^.axli- 03 ,\:;tiaqoaq IIb "io noti^'A&i 10I noi^fewlev 9x1* ct aotitoqciq ni xgcJ' b "^JBq Iljerla nol*sioq'3:oo Lns noa ".•y^^tiaqoiq ai'x no ,19x1 .axrf lo 9ulev l)9ee98BB dd' ^i'leqonq 11b istlt BOitupsi won wel 9riT .•^enom at osjIbv sit to ineo -xsq x^^-^'i ^^ noi^BXBS 10I -V9 nx i)9Xi'i eo" oi" ex x^'^SQO'^l Jteai ^0 eulBv beeeep.sB tdT beeaeeaB 9d oi ex ^iieqoiq iLoue bns ,xe9^ betsdizija nsve \;i9 -195 ,beis-ool et enss stii sterLv ioiiistb erli ni bexBi bnB 11b" Snibi/Ioni ea 3tL'j£ie erLi y.^ b^nilob si ^^isqoiq Isnoe eiinBl noqx; s^fnsi.isvciqnii 11b ;asisd-as ic ,8l9*Ji5flD .ejjoog no 89J£^B bQiinU stli ni i>si-89v litis et dotci-v lo eet erli no "^nsqaoo bBotltBt ^nr. ni 10 ,nod"3nir[asT/ to eiBiE ei'i -iBr ,i)ni3l[ tevQosiBdK tc iBliJ-gnta bnB IIjl^ Ln^; .noijjsnoqrroo 10 9nil9i) \Ba W£l adi d.otdv: ^noiiqtioaeb 10 ,&iuJ>stv ,9;; lenoaigq 9d" oi blod bnB 9iBloob ^ioiqioiat si'iuoc tidi 34. property, for the purpose of taxation ". This legal definition expressly excludes from the category of person- al property for purposes of taxation, all property used exclusively in trade between this and other states or countries, and also all mortgages, notes, accounts, certi- ficates of deposit, tax certificates, judgments, state, county, municipal and school district bonds and warrants, JJo deduction is now allowed on account of an indebtedness The 5,^ owed. Leases on real estate and all leasehold interests of a term less than the life of the holder are to be re- garded as personal property. All personal property shall be listed and as- sessed in the county in \ihi6h the owner or agent resides. Exception to this general rule is made in the case of standing timber held or owned separately from the land, fish traps and nets and fishing locations, lumber and saw logs. These classes of personalty are to be assessed where they are situated. Corporations ; The real and personal property of ordinary bus- iness corporations is to be listed and assessed in the same manner and by the same rules as the similar property .*£ ■noeiaq lo \;tio89^eo sri^t cicil eebulozze xlecetq^zQ nci^tnllsb bQeu ^d"i9qoiq lis .noiJi^xe* "io seaociwq lo^ \;iisqoir le 10 3s*Bd-8 isdio bn^ sitii aee\,isid ebsii nt ^Xsviaulor.s 'iiiQO ,BintJoooB ,es-ofi .aasBgd-ionj lie oaJLs hns ,aeii;tniJoo .aJftEiicw i)n£ ebnod ioliietb loorfos £)n3 Isqioinua .^Jrujoo eeenbeidebiit. ns lo *nJJoco3 no /)9W0lIs v/on ei nniJ'ojJbsL oTi 8^89i9cfni blodQr>BsL Lis bci£ Qi£tse Ib91 no asa-eoj ,L9wo -91 Qd od- 91S n9i:Iorf srCJ- lo oltl erii nssit seel nnst b lo ,Xiiecfcic2 lBncei9q ae beLis^ -as fonij f)ect'BXl so' LlBiie -^iiaqorq, IjBrios'xeq Il/i. .eebiaet ine^& 10 'i^nwo f-x-u xioirir; rx t^Jtiuoc 9rW ni boee.ee lo 9aao orid- r.i stsin ex gljn I^s-ranss sirid- ci ncli-q9oxL- ,l>rtBl 9xii moil xleiGiBqee baa^o 10 blod toa:a.li -^albriBta WBB bnc iscfcujl ,anoi;t£ooI ■Qnidat'i. bxxe ai-on Jb«B aqeiJ dsti besseaea 9Cf cd' sib ^tl^^noz'tdc lo eeesslo 9S9XlT .csol tbhiBuiJia e'zz ^orli e'iod'v l enolJ'.EtocT'xoO -at/cf ■\2*i.'snii)io "5 '^Jaoqoiq iBfioaieq bne, Isst orfT 9xii- nl £>9eB98ae bns. beic:ll scf o;t ei. atioiizzocioo aasni Y^isqciq i£lJtEX2 3di as 39X01 gniBe sxlJ- xd btts^ tsnuBta grfijse 35. of individuals. The personal property of gas, electric and water companies, street railroads and other road and turnpike companies, and of express, transportation and stage companies is to be assessed in the counties Tiftiere the same is usually kept. The operative property of steam and electric railroads and telegraph companies is assessed hy the state equalization committee. Bank stocks are assessed to the owners thereof in the cities and towns where such banks are located. The assessment is at the full and fair value in money as of March first, with a deduction of a proportionate part of the assessed value of the real estate belonging to the bank. In practice the banks assume and pay these taxes for their stockholders. Shares of building and loan associations are exempt. Insurance Companies : Insurance companies are under the jtirisdiction of the state insurance commissioner. The state has pro- vided for a series of license fees, mainly for regulative purposes, and also for a tax on premiums as a revenue measure. The schedule of license fees paid by the com- panies includes: (l) For filing articles of incorporation vf25,00 .3S oiii03l9 ,aj88 to Y^isqoiq Xsnoansq sxfT .elBUbLvlhal 'lo l)njB b&oi lodto Lne eijeoilxsi ;t99id'e .EeinsqKico isiBVf Las bn£ ttoliBi'ioqeciGii ,aesiqx9 "io i^njs .esinaqmro eiflqniJJd- Betitiijoo edi nl bsaeeeo& ad ot ei. asirtoqaioo ei^siie Xiteqoi(.^ t'^viij^ieqo sriT .^qssf \;IlJ3JJeu ei Q:.i':e an'i aioxfw aainaqxnoo rfqeiaslsi- bas eb&oiLiBi ^tiSoele bns r.i^e^te lo ,ooiilinxioo nox*B5lIeup9 sj-jsJa srfit ^ jbseeeaejs ai l03i9rli' aierrwo exij ct I>sae9G3£ sib B:tood'a :fnjs£. .ijQlrooI s-rs sjfruBO rlowe sisriv/ anwod" i)nf5 aeid-xo srii ni 8B ^9noa ni 9x;Ibv tijBl f)XiB IIjjI or:? etc at i:ieae.c.&seB axfT *iJ3q eJ-anoi^ioqcTiq £ Jo aoitoubsh a rid-iv jCte'il"^ /-'niBii lo ariJ o;^ anisnolscf eiBiae Xbst; 9rf;t xo quIbv beasoi^aB add lo 89XJ3;^ ecedi x^^ ^^^ emsjeaB a^in^d atit ©oiiosiq nl .jinecf njBcI b[i£ ^nibiiuQ lo e©iBx£8 ,8*i9f)IofIiIoo*a ntadt lol ,iq_aQX3 CIS. enoiJ^iooaafi r eaxfUGorraoO 9oaBiuen][ aot:toibeiiul edi tobnts 9i£ eslnfiqnoo enps.iuenl -OT:q 83xi s;tB;te od'2 ,ienoiesJ:i;iaoo eoasitranx aJai's Qdi Yo eviisS.sssei nol YlnxBui ,8991 9sn9olI lo aoiiaa jq ioJ babiv euaevet s ae amislmszc no ::bJ" x3 lol oalB bxis ,a9ecq'n;q -uioo 9ri^ \;a i^lsq 3991 aenaoxl lo ©lubsrioa sxCT .eiuaBain :e9i)ijIonx asxnjsq 00, es^ Koxiaiociootil lo aslold-ifi gnilil aCff (l) 36. (2) For filing amended articles of incor- poration i^lO.OO (3) Por filing annual statement of con- dition and report of Washington business 20,00 (4) For filing other miscellaneous papers 1,00 The state also imposes a tax of 2-^^ on all premiums collected or contracted for. Companies engaged in any kind of insurance other than life, are permitted to deduct from gross premiums the amounts paid policy holders as returned premiums. Life insurance companies may deduct only the sums paid as premiums to admitted companies as re-insurance. If any insurance company shall have 50% or more of its assets invested in any "bonds or warrants of this state, or bonds or warrants of any county, city or district of this state, or in taxable prop- erty within the state, or in first mortgages upon improved real estate vathin the state, the tax shall be 1% of the amount so collected. Privilege and License Taxes ; In addition to the property tax and the license taxes mentioned above, the state imposes a number of priv- ilege and license taxes, partly for the purpose of secur- ing revenue, and partly as a means of regulating certain .dC OO.OIv noiJi'ioq -noo xo ^f-neraoJ-e^a iBurins sniXlT: lol (5) 00. OS sDenieJLTcf auoenelleoaxxu isriio ^nllil io1 (^) 00,1 aiaqjEsor lie no ii^S "io XBi s essogaii oels sd-£*e edT l)9S3sn6 esifi£qjnoO .lo'i i>sd"0£iincio io it-J'osIIoo afiUJiLUJiq Tcoilocr bXBq sc^nuoni/j oiii' ecJLflcsiq eeois noil &oub&b oct eexfLeqflioc oortErruani slij .ecujinsiq b9nii;d"8^ a£ aiebloxi i)9;tixiai:'jt5 cJ 3Ci.xi:'j9iq ei5 axsq anua QxLi \lno toubeb vzai ^njsqcico sonsiJjani '^ae II ,©onf.niJafrx-oi bb esxneqmoo abncd \,n£ ni bs^ROvnJt BteesA ail Io oioai mo l^O'C SYsd 1Is:s:Lb XtiB "ic eiuBiiav 'no abnocf io ^eisie aidi "io einz'iiBW to .qoic olcfexjsJ nl ic ,9j'B;te eixi;!" Io iotiielb ".c vJio .^d-nx/oo bsvoKTfflx noqxr aasj^^d-iom ;taix"i nx io ,9d--6J-e exfd- niriJ-iw \:;ti9 9fl;t Io ijXl 3d Hade xsi edi ^eiai&a Qdi aidilv s:^&iae Lbsi ,b3ioelloo oa tnuocrM ; .a9>x? osi-jsolj btss 939l.tvxi^ saneoil edi pub xai ^d-'itiqciq 9r£:f oi noitibljB nl -viiq Io isdflurn e egsociui 9;t£;f8 sxli' .ovoob bsaottnos: cszcBi -Tiioge Io geoqiwq edi 'lol Y-t^isq ,b9XbJ serisoil bne ggsli nl£;i'i9o 3nx*i--lL'S9i Io ansoc s ae T^Id-i^q bna ,9Jjf.9V£i gni 37. activities. Express companies pay 5% and car companies 7^ on gorss receipts from business done within the state in lieu of all other taxes except on office and other equipment in the various localities. The object in this case is simply that of securing revenue. The nature of the business makes any other form of taxation imprac- ticable. Motor Vehicles ; Motor Vehicles are taxed as personal property, and in addition the owners are required to secure annual licenses, the cost of which is determined by the size and power of the cars. Each person who drives an automobile, whether owner or not, is also required to secure a license as an operator. The receipts from these license taxes are used exclusively for the construction and maintenance of the highway system of the state, and the recorded ser- ial license nurabers afford a means of regulating and con- trolling the use of motor vehicles. Corporation License Taxes ; Two distinct license taxes are imposed upon cor- porations,, __ The first is the filing fee of ^25,00 which is exacted from all new concerns at the time the application is filed for the articles of incorporation. The second .vc esxocqmoo ijso bna i?,5 \,aq asineqnco 8c';6iq:-:E .aaiilvi^ojB scfBcfa 9£ii ciiiJIw anoJb assniaucJ noil Biqteost eeiog no ^T if)xfd"o bns aollJo no Jqeoxe es-csi- istiio Lis. lo U6ll nx ttl ^09 00 erlT .asii'llsool si/oxijbv sd^ ci Jnamqiups siuJ-jsn oflT .eufisvDi anxnuoee lo J-£xld- \;Iqrrii3 ei anso eir{;t -OBiqml noicfexjsj' to crxox nsrid'o y;nj3 esiLcra eaeniejjd srlc^ 1o : esLol flsV loioyi ,Xtt3qo'i.q Xenoaisq ee ijsxed' sijs esIoxxIsV loioil Xflwnnfi enwoss o* ieiJtjjpsi eijs ensnwo erii aoitihbfi ni bne Jbn£ esia arf- ^c^ tsnintiaJsi) ax rloxiiw ^o :teoo arfi' .esansoll ,eIicrocfO*xf£ na Rsvxai) cxivv noaisq rfoBlH .exso sxfct lo nswoq eanaoil £ eisjoae oi banxijpsi oel£ ax .J'on ao lonwo nsxlct^riw aexfi* aansoll sesxi* mcnl e^qlsoei sxiT .lo-tsieqo ns ex:. ©onBn9d"nl£r;i bn& noiiouiisnoo erli lot ^XsTlawIoxs beeu sis -193 i)9iiiooen sxiJ" bos ^aisie erii 1o aeia^e \,&vriQi.d erii 1o -noo bns ^r.Lic^Lis^ei to axiBera £ biottc eiedvwa sansolX L&i .aslolxisv lod'oc: ^o e?.u orii :^nllloii ; esxsT seneoxj. noxJ-x;T:pc-ioO -100 noqjj beeoqsai eis aexAi eeneoil ior^iietb owT ax rfoxriw 00,SS$ lo ss^ gnilxl erU ex ^taixl sriT ,8noi;t£ioq noxd"£OXlqqiJ srii omti erii is, anieonoo wan LIb zioit beiosxe bnooea 9x£T .noiJ'f loqioonx "io eeloliixs arii ict beltt el 38, is the privilege tax of $15.00 per annum, which is lev- ied upon all corporations doing business in the state. These receipts are covered into the state general fund. Inheritance Tax ; A tax is imposed upon the net value of all prop- erty within the jurisdiction of this state, and any inter- est therein, whether belonging to the inhabitants of this state or not, auid whether tangible or intangible, which passes by will or inheritance, or by grant, sale or gift in contamplation of death. The rates are graduated ac- cording to the size of the estate and the degree of rela- tionship of the beneficiary. Bequests to charitable and educational institutions are exempted. The inheritance tax receipts are deposited in the state general fund. Poll Tax ; An annual poll tax of $5.00 is imposed upon all persons in the state over twenty-one years and under fifty years of age, except idiots, insane persona and persons supported at public expense. Pour-fifths of the proceeds are to be deposited in the state general fund, and one-fifth in the county current expense funds. In the event that the collection under the levies authorized by the Veterans Equalized Compensation Act are insufficient 8C ,sJ-£i3 axi'l ni seonxajjcf ^ntob snoxJ^ioqioo IIb ncqu b9i .btiut Isisnsg e^tsita sr:^ otai tsisvoo ois 8*ql909rt sssriT ! XgT son^J ' lisr^nl -qonq IXe lo evlsv isn ed^ nocisj beecqail el x£i /. -rrsoHl -^nfi bn& ,5ieiz sldi lo noiJoJ.bsx'xut, sdt nxrf^lw yJ-is eixLJ' "io aJ-ftscMderini arit o;t afi-tsnoleo" isriJ-axiw ^ntsierii Scs rioxtlTv ^elcxgrucinj: lo slcfis^s^ leiid-ariw i>n£ ,d-on 10 9J^£;te Jlig TO sXjbb .J-fusis Y" "lo ,sorts:txisiIni: 10 Iliw \:cf eeeeeq -OB bs^^iJjbBf^ 91B asist orfT .x£;J'B9i) l:o noid-£lqi3ie^noo ni -al9i lo ©91:99/; eriJ- hae, sJjsJ'a© srfJ" lo 9si8 eiLi oi gnlbioo • l)nB sXcfBi-iir.xio oi' ajTaoxjpsa .'^iBioilgnscf eri* lo ctdznoit eonB&iisdsiz 9XfT .f)9iq-'TT9X9 giB a^ioliL'tiiaal. iBaot&soube • Jbni/l iBignss sj-BJ-e srf^t ni figtiaoqsL 9ib eiJ'qIsoal xbJ- ; xbT II .o' ? nocJJ Jb93oqiiu: ei 00.5^ lo xb^^ II oq iBUnne riA •xglDntf bnB e*j:boy Qdo-xtr.evti' lero eJr-J^a srlj- r:x anoaisrr Hb f>nB ancsiaq onx^anx .e^oxLi d^qsoxs ,9aB 10 sibs^ 'iJ"lxl 9Xid- lo ari^lil-iijo'5 .©8n9qx& oJfcXdwq ts bsiioaque exioanoq ,£>nul iBisnss &isie edi nl i)od^iaoo;9t) 9cf oi eiB ebasootq nl .ebciisl QQr.sciz.9 ttisTiuo \iJ«x;oo 9Xld- ni rl^tlil-sno JbnB hssxiorl^iTB a9lv9l stli zebnv noiiosLloo stii SBdt iners odt i-nsiolllx/anJ: 9i£ ioA noiwcanocrmoO bgsilBi/pa easiivieV edi \;c 39. to pay the interest and principal on the bonds issued under this act, the legislature shall make appropriations from the general fund for these purposes in an amount not to exceed the poll tax receipts deposited in this state fund. (L. 1921, Ch. 174.) Gasoline Tax : An excise tax of 1^ per gallon is now levied upon all liquid fuel sold in the state for use in inter- nal combustion engines, to "be paid by the distributors thereof. Kerosene is excluded from the operation of the tax. The receipts are deposited to the credit of the highway fund, (L. 1921, Ch. 173.) Various Local Licenses ajid Fees ; The various local officials in counties and cit- ies are authorized to collect fees for a considerable num- ber of services rendered, Examples are the fee for the issuance of marriage licenses, the filing and recording of real estate transfers and mortgages, the issuance of warrants, etc. These fees are charged for the purpose of defraying the costs of the local offices, and the col- lections are used for that purpose. 2. ADliIlTISTRATIVE FilATURES 07 TIE Y^ASHIITGTOIT TAX SYSTEII : We have already stated that the most important .65 enciJ'^iiccoaqqjs 9:^0 Xl^rla azuiBLet^eL sdi ,^ojb eidi iebaL\ ioci iauotsB nx nJt eoaoq/u/g sesiid" zol bnsjl Isiiotis^ Qdi moTl 9}R^B sxriJ- ni bs^isoqsi) a^qisosi xei Iloq sxfi" bssoxe o;t i.l'Vl .xfO ,I2GI .J) .hnul i xeT sniJoegC l)9j:vel \7on ex noII^s isq "i^I "io xe^ eeioxe nA -T9d"nx KX sstr 10I o^isiis sdt ai. bios Loisl bisjpll Lie. noqu Btoiis6iiiBLb edi \;cf 1>1bq sd oJ .eenisns noli-etrcfraco I/}n sriJ- -o ncxd-£T[6qo sxld- moil i)ei)0lox9 si anssoiall ."ioo-xsxfit sxU- "ic ^J'Xfjsno edi od" i>9J-i8oqoj3 sib ajrrxsosi ariT .xb* (.en .r£L} ,I:jGI .J) .^nu-i ^Bwrlsixi ; aQ9'^ i)ftB esenscij IbooJ buoxibV -*xo bnjB eelinuoo ni elaxoxllo IbooI auolxev oxfT -corn 9lasi9bienoo b ioT: aasl iosLLoo oi bo^ltcdiuB sis ssx 9x1^ io*i 991 orld- 91B e9lqnj3XCI .i)9i9i>n9i asolviaa lo iscf 3ni:£>ioo9i btiB anlli'i sxi^ ,B93n9oiI 9SBJtiiBm to ooaauezl I0 9onBX/3£!i gjcid" ,e9SBsiion bas aiglanBid" aiBiee L&^r to eeoaiuq, 9x0" lo'i i)9siBx£o gib 8991: 9a9££T ,0^0 ,sd-nBiiBW -Ico 9ii;f bHB ,^90x110 LbooS. edi lo e.teoo odt gnx^jBilob lo ,930qix;cr iBXfi" zol bseu 91b 8noi;to6l [rvITAHTSIIilJiOA .S :, .,^>- i.. :CA.T TiOTOTIIKEA'^V ..HT liO ;tn£j-ioqaix icom odi tsdt beii^ie ^Jc>b9iIb 9vbx£ 9V/ 40. aspect of the problem of public finances in this state is, in our opinion, the more equitable distribution of the tax burden. It is evident that this is a problem which involves both the form of the tax system, that is, the kinds of taxes that are used and the manner in Tftiioh these taxes are administered. In the preceding section are summarized briefly the kinds of taxes used in Washington, and in this section we shall first outline very briefly the administrative machinery which has been set up and then proceed to our criticism of the operation of the ex- isting system of state and local tajcation. Administrative Organization ; The first, and in many respects the most import- ant tax official is the assessor. The county is the as- sessment district, with the exception of Spokane and What- com counties, in which the township is the unit. The assessor is locally elected, serving in the townships for one year, and in the counties for four years. It is the duty of the assessor to call upon each person, firm or corporation in the district and secure from them lists of their taxable property. The law re- quires that the assessor view this property and assess .0^ eis,ic eiiLi at asor^nil oilcfuq Jo melooiq edi "lo i'osqaB lo noi^utfiii-aJti) elciRiiupa 910x11 srii ,noiniqo isjo r.t ,ai melcfoiq s ei eJfcrf^ d'cxiJ^ inehivs ajt i'l ,n9i;ijjo xjpJ odi ,eJ: cfxMfJ- .ns^EYe xjsJ odi lo m'xo'i orI;f rlJ-oJ esvlovnl rfciriw rioxxfw nl ^sxtnam edi baa beau six; c)•fi^!'.c^ esr^i lo abnl^I sriJ- noxioss gr-i/jsoQiq sxiJ- nl .Iseiei-aifuabis STr> eaxsJ sasxid- ,noi'sni.xl2£7/ ni Jbsau eei^sJ- Ic ?i)r>x:I 6iiJ- i^I'isiicf besxii=.Li.U!e ei£ Yllsx^cf ^rmv i>rixId"uo i'eix'i Ilerte avr nox;to9e aixij- ni Lcis^ Lac qxr d'sa nsad aexl xloixiw ^nenlfloxsn svJtjiJtcdaxrfirabfs adi -X9 sxid- lo noi;fja:£9Qo odi 'io ciaxoxi'Xio ijjo oJ" fjssooi. naxIJ" .noid"BXJB^ XeooX I)Xts oiste to ras^eYe 8nxJ"5X ;n. olj£Sxft,g-^aO syi Sfi&einiiobA -iioq'aii oDoci axIJ- a*09qs:3'X \;mj.'u nx i^nis .Jaiil exIT -a& odi ax \;wrix;co oxiT .'^oaaeeee adi 3X Ifjxoxllo xbJ" ias -d-BifkV ijnfi onjBiloqr. Io ncl^tqsoxe srl;!' xf;tiw ,d-oi:i;f3Xi) ^rrsxcsase srfT .o-xfiu iMid- ex qirlam/o* edi doidvi nx ,8Px;fnjJoo moo 10I eqiriarwoJ' srij nx anxvaae ,b6ioi)l3 y^Llsocl ex 'xoa?9C3B ,ci£,Qx ijjol lol asixinxroo oxCd' nx bus ^lesy, eno iiofis nocfx; IIxso C.J" 'xoaaQssji 9rl;t Io y^iisb edJ ax tl six/osa bne ioiiiuib sdi ni. noii"*-.ioc^ioo 10 unit .riopieq -91 T/fj; 9f{T .^J-xsqcif; oIu.p.xbj aiexli- 'ic aJ-eiX [i'sdi racil saeeaj^ Lob ^ct-iaqoiq axx-J- wsxv io80038.s Qdt J-jsxld- eeiiup 41. or determine the value thereof for taxation purposes. The accuracy and completeness of the lists are verified ty the taxpayers' affidavits, but the oath does not ap- ply to the valuations which are placed on the several items "'.■•3.i "by the assessor. Deputies may be appointed for such per- iods and at such compensation as may be ftuthorized by the county commissioners, V?hen the assessment is completed for the district the lists go to the local board of equal- ization for review, correction and equalization. The county auditor is empowered to add omitted property. The county board of equalization is composed of the county commissioners, the county assessor and the county treasurer, or a majority of these, with the assessor act- ana pei ing as clerk. This board meets annually on the first Monday in August for the purpose of examining and compar- ing the returns of the assessment of property in the county. The councils of cities of the first and second class shall select a corarnittee of three members to act with the county board )ri.th respect to all property situated within such city. In the course of this session, which may last not langer than three weeks, the county board may raise or lower the valuation of any tract, lot or parcel of real estate, or of any class or personal property, or the .1^ .assoqiirq ctoitBxsi io1 'io&'isxid" suls-r oilS eniiEisJ-ab 10 b9ttiioY ei& a^aJtl osii lo eaensd^slqiaoo bns x^^'^'J^^^ s^T -qs d-on eeob lit&o oiii iud ^ativi:blJ1& ' eia-^i^qxai edi x(I emoil IdsvsF. sdt no beo^lc- sic lioirlw enotiBUlsv odi 0- ^Iq -i9q rioiwfa 10^ beinioc a scf ^^sn aeiouqsG .rioeasaee axiJ ^C oxid" xc bos.iiod.iuti scf ^c^n a^ nolcfisansamoo rfox/s i'B £ii:£ ahoi bBi6lqp.oo ax (Jroxnessaec srW nsxiT/ , eionoiaaidinico y^'i^c^o -Ifijjps lo Msocf XbooI 9x1^ oi- 03 a^ail edi ioizietb adj nol sxiT .noxoBsilBXjps ijrrs noid'oot'ioc ,w6iv9i ic'r noicffisi: .■V^J-iaqoicr iiad'd'icio i)I)B oi" i)9i9woqms al loJ-lhue ^^inuoo lo i)930iimoo ax noiwBSilBupe lo joiijocj •^^i-nuoo sxiT TCd"nx;oo axfd" Jjnis aoeaaaajs -\(,inuoo odi ,aionoxaexi:auoo \;lnjjoo sri;J^ -ios loaeseajs odi ditv,' ^oaodi "io vizio'iBia. xj 10 ,iotiJeaoii iaiil sdi JHO 'v;ili5i;nn£ siooa btBod axxiT .itislo es sfii -rujqinoo bns arrinxaexe "io saoqaxiq adi 10I ieir^uk rx vjBbnoIyl • Y^ni/op srld" nx ^c^ieqoiq to iciosicsoaae sdi lo anix;d"9i eili sex Ilsrls aaBlo bncoea 'oub iaiit odi io a9J:;tio >o alxonxroo 9riT YdTix^oo 9i£i diivf ios oi eiocimom ooidi lo oeiiisfmoo & iooLoa doue nzdizvf bsisvilc \';J'i9qoiq Lis oi ioeq^aoi tiim JqibocT J' on .tajBl ^fiiu xioxxlvv .noiaess sidi lo saixxoo sdi nl ,v,ii.o to saiBi x^fli ^"^^oci \;c^niJoo axlct' .aifssv; riord-t cicdi legnsl Ibqi lo looisq to iol ^ioj^ii ^rts "io fioxl^ul^.v odi loviol odi no ,^cf"X9qoiq Lsnoaisq 10 ea^slo \,tiB lo ic ,9J'^-cJ"89 42. aggregate value of the personal property returned "by any individual, wherever it believes that the value as assessed is not the true and fair value for taxation purposes. Five days notice in ^vriting must be given to any owner of real or personal property before an increase may be made in the assessed value. The tax rolls for the counties, when equalized, are forwarded to the state auditor for submission to the state equalization committee. This committee is com- posed of the governor, the state auditor, and the state treasurer, acting ex officio. The sessions of this committee begin on the first Tuesday in September, and may continue not more than twenty days. The committee is required to "classify all property, real and personal, and to raise and lower the valuations of any class of property in any county to a value that shall be equal and uniform so far as possible in any part of the state, for the purpose of ascertaining the just amount of taxes due from each county for state purposes." The State of Washington has found it difficult, for various reasons, to develop and adhere to a consistent policy of centralized tax administration. The following resume of the history of the state tax administration since .2^ Tjns y,d bQcrwiQi li^frtsqcig Isnoaisq adi 1c qsjIbv s^BseTggfi beeeeaas as enLsv adi :^Bdi aevollad Sx isvsiexiw .iBi/bivlbni ,e98oqi0q noxii?xj35' io1 suIjsv iJti-.T: iirte euid" oxict" ct^on ?i ism7o y^cis oi nsvls od J-ejJia ^niili'^i nl sold' on e^joi) svl? qJ T^Bm 9aB9itonx n^ sio'iscf vtioqatq Ixsnoeioq to Isoi 1o ,3uIbv /jsecssae 9xl;t ni sfcsm ,i)9sll^:;up9 nerfw .asiJ-nuoo sri;f nol ollor :zQi sriT Slid- 0* noxaeimcfJJe loJ. •xoii.bua etBie. adt ot bebtiiwioJ. ©-xa -rioo ax esJiimmcc) eixiT ,oeiili:moo ^oxc^£sJtIsiJps So^^de 3&.^ia Qdi bciG ,toitbsjB sd^de edi ,i.onisvos aiid- lo hseoq exit* lo anoxease sriT .oioi'iio xs gnicfoB ^'iBtise^eni bns ,^9cfmed-q38 ni ^cbesjjT J-aiit sriv nc nlsscf oeddXiiraoo 93Jd-xxnxuoo axiT .a^fli) ■'id'nawd ruBxId oaora don oynxdrjco y-'^ci .Ifinoaisq bns Lssi .lidisqoici lis y,11se&lo" od bgiiupoa ax lo saslo ^cna lo enoxdstflsv 9i£d- iswol .bnjs seiai oJ- bas btw. Ifijjpg 9c( IIjBXie diixid ot;l5v b od y^^J'Joo x^^' ^-t ^d'lsqoiq lol ,9dBd8 9xid lo itnc y^ns ci sidiseoq sb ibI: oe iiPicl:inu sub es.xBd' lo dni/ocic daxTQ 9xld" gninxjedigoajs to 9aoqnuq orfd' ".aaaoqijjq sdsda io1 ^Jd^i;oo rlojss moil ^iluotllib d-jt bnixcl eerl nod-gnirfeBW lo sdeJ-B sriT dn9J-axanoo £ od stedbs bns qol9voi) od' ,axioeesi axroiiBV lol gnxwcXIol exiT .noxdjritdaxnJti.icB xai be^ilaiineo lo ■^^oxloq aonxa noxdjsidaxnii')::^^ X£d 9dj2da sxld^ lo \;iod8xxl 9d& lo 9x:mD9a 449. the organization of the state government reveals the lack of clear-cut conception of the administrative problems involved: "When the State of Washington was ad- mitted to the Union in 1839 the general prop- erty tax had already been established as the basis of its financial system. The new state presented the relatively simple economic conditions which everyv/here have proved the most favorable environment for the development of that system of taxation. The original tax administrative organization was Simple and displayed the characteristic decentralization of real autloority. The local assessment was in the charge of a county assessor over r-'hom no central, control existed. This officer had little re&l authority over the multitude of deputy assessors in the tax districts, a condition which was highly favorable to the emergencies of the ubiquitous evils of under- valuation, evasion and discrimination in as- sessments. The statewide existence of these conditions was evidenced by the establishment of a state board of equalization in 1891, The duties of this board, originally composed of the secretary and auditor of state and the land commissioner, were transferred in 1893 to the board of land commissioners, a body which had superseded the single official in charge of that department. In 1897 the legislature re- verted again to the original plan of 1891 . These changes were due to the experiments that v;ere being tried out in the organization of the land office. They suggest that the state board of equalization vias not taken seriously and that considerations of convenience and economy, to say nothing of politics, took precedence over equitable tax administration, "The forces which brought forth the tax commission are difficult to trace. ilo evi- dence has been found of a strong public senti- ment such as has so often been the fore-runner and to some extent the progenitor of the tax com- mission in some other states. So far as can be .£* aiceXdoiq evtisi:jei.almbs oiii "ic aoiiqeonoo iuo-iQelv to ibavlcvni -qoiq Iriansg ericT G68I ni r.oinU sdi o& bei:tiia ea bedstldiiiisQ aeed x^sozIb bBd 3cb^ ^Ii1e 9xtT .xas^s^e laxoneniji a:M 1o slesd orLi slqiaie \^XeviJ-jBl3T edi bsfnezstq eiaia v/sn svj^rf 9i9xi\vYi^v9 xioixlw axtoictlisnoo oinionoos srU" lol ^nsranciivne 9ld£7ov£l; i'eom erIJ' fcevcxg .noi:}"£X.«t "lo nrsj-e^ia J-fixId- "io ctngraqoXsvsb oxd"8X'r3i'0£:£.sxIo srfd- ijgi^filqaii) hnt gXqruia new 9x£T .^cJ-Jt'iori^Xfis Xjboi to ^oi^t£^iX£1C^a90^£l ■^i'nifoo £ lo 9siiix£o orld" rti 8£W ;tnsiaca9eajB X£ooX .iaJexxo Xoi^rioo X3'xJ"n9o on x.Q.±n isto loaassa^ .sJ'ox'iJ'axJj MBd" Slid- ni. Biocase.sa viuqob 1o ebvttilua sdi oj" elilBtovGl •^Irl;..,ir: 3sv/ iloxxlv/ noxcfi:I)noo ij -•xebnxr "io aXxva euottuptdu sdi 1o agionaa'iome -33 rti noiJ-.^nxnix'toaxb iins noiasvo ,noi.t.eirXBT flasril "io aoagd'axxo giiiwgJ'Bi's sxlT .aJ"'''3iaa2 93 J'aSiTtxIailcf.oJ'eg sdj- >^i bsonabt/a ajsv; onoxJ'iijrioo .Xw8X ai aot:t3StlJ2UpB lo bii&oJ c-inia a "io beaoc[:aoo '-iXIJsrxxsxio ,Iii.?.o'i airid' to asid-jjb silT 598X nx JDSiis'iaas'xJ" .yi9W ,tC9noxsaxasfaoo ijnsi i5i}oB:ci od ^tXxroi'llxb 91^ noxoaxinaoo -id'n93 oiXcfjjq ano'i-a s lo bnuot ttesd s-sri aoaob leaciut'Oiot 9r£d- roecf ctaito oa aexi 3J3 rlowa inota -JHOO x.-sj- Slid- 1o loiins-sozc zdi icidixs 9fiio'2 od" bas 9G n£0 8B xe*i oS .aad^^ia larLfo suioa nx noiasiin 44. learned, no special investigations had been made "before the board of tax commissioners was decided upon and the absence of a clear formu- lation of plans resulted in several years of piecemeal legislation in the effort to devel- op an efficient administrative body. To il- lustrate: The board of tax commissioners v^as established in 1905 and at that time was required to supervise the tax system, to assist in the state equalization and to administer the inher- itance tax. In 1907 the central assessment of railroad, telegraph, express and private car line companies was initiated and placed under the board's jurisdiction. In this year also the board was placed in charge of escheats, and in 1909 it was made an excise board with the duty of issuing and collecting for, the annual liquor licenses. The laws relating to the administrative authority of the board of tax comr-iissioners evolved only slowly to the stage of a clear cut definition of that body's status and functions. They had hardly reached that stage in 1915 when the legislature removed the tax commissioners from the state board of equaliza- tion, leaving that body composed of the auditor, the commissioner of public lands, and a member from the public service commission. This reaction toward a more primitive and clear- ly less satisfactory arrangement was only a tem- porary manifestation of the political struggle of which the tax department had been the center for years. The legislature of 1917 abolished the tax board and substituted a single commissioner, but returned him to the state board of equalization," Lutz - The State Tax Commission, 1918, pp. 352 - 353. The nominal headship of a state tax system is vested in a department of taxation and examination, which is in the charge of a director. This director is ^>» nsscf bsri anolt's-jioaovai iBioaqa on ,beniseL 35'.T ai9noJ:oex;p-T(oo x-^J- 'io his:'0cl sdJ- sio'^acf gbB-Ti -uazct izqLo Si to ^onsads sdi bac noqiJ bsbzo^b Iq aiB3v Ia'i3Y93 nl bailL'39'i p.nslr ^o aolial -iQTob o;f d'ao'i'ia osii fii noicfBlaiaal I^ejiasoaiiq -li oT ,-^bod sTiJ-JS-iJeinimba iaaxox'ilo ns qo asi\f aisnoxesxrrjrxoo xbJ- Io hisod srlT retc-iJ-ayl fiaixupsi 33W smxJ' J-jerW ^s fcna 20QI at bsiiatldszies erii at J-aiaejB oi ,aa-B\;3 >xd- axtJ' saxvisqi/B oi -r:9x£nx siio istalnxcLba o:^ £>n« nolcfssiliiUpo ^J■«c^3 J-n9nia39R3B Ls'xd-nao 'axlJ- ?OCI nl .XBd" oon-i^i sfBritc bns aasignca ,xiqsa39l9J- ,i)so'xIl«:t "io bepalq Lhjg i>9J'si;^i:£[J: 3.oj?r a9tnsq:iioo oaxi •iso XB9\j 3M;t nl .i-ioiioii)«xajJi;, £, 'b ■::.'•: ccf ^d* lobax; ,ad'S9iIo39 Io ogiBrfo ni baoslq asw b'lBod eiit oals riJ-xw i)i£Ocf 90X0X9 nj3 abax-i sjsv/ J-x 6091 ni btv^ grid- .lol snxjoolloo bru\ ^ntU3at to \;i-jji) adt ■QntiBlei 8W.8I 9ilT .ssarxsoil loiipil Ijsunns i)t£Ocf 9r£;t Io vixioui";jJ sTi:;fBiJ"aJ:nx."iWB sffj- oi' 9iij o^ -^lyfols X-^-^o i>37'Iov9 3'i9noxa3x:.iaoo x£^ "io a*ic-30cf J-sri* Io noxd'inl'iax) tuo ifi9lo s Io 933*3 bsriosBt '{Xb'X^ b-sii yeriT .anotiomft bna sijj-xjj-a sxW i>9vom9i 9iw3"Bl3X39l 9xlJ nsii'.v 3I9I ai a^J^ia j-^iriJ" -J3sxlsi;p9 "io iJiBOcf aisia erit aoit aiQaoiaah:traoo :iBi ,'zoitbissi oiU Io b33o..inoo •'^i)ocf &3si& gnxvsal .noxJ- locfDiec! s bna ,ebnsl oxiduq T:o i3j:iQX3KXiufaoo edi airiT .noi:-:ax:anioo soxviaa otXcfx/q sdi .Tiofi -•xs9lo bns aviJ'.tmliq o'looi r> i)'xxj'.voJ" no.i::^oi39i -ri9;J J8 '^Ino ajsar inaniaaasiis ii;io*os'i3J:c}-B8 aasi 'cl 9l33JJi*3 I.Boid-iIoq 9ilJ- Io noiioieoliL-iBm. i^xs'xoq I9tn90 9ii}' n99cf b&d iasiaiicq^ob yz3i sd& xioirlw "io bails xIoJs ?iei Io eicialatjt'L 91IT .cibqy: lo'i ,i9no.i:a3J:ninioo slanxa s bgJ'iJi'X^edije bria biisocf XQi sd:} ".noitssilsupo "io btt^oa' 9J-s*3 adi oi aid beaitj^^i: &ud ,8iei ,rtox3gxr:atoO xbT gJ-si'S axlT - sJ-ijJ .S35 - S:ii5 .qq ragJ-a-^a :c3* gJ^SuS b "io qiJabssri iBniraon sxfT .floxJ-Bnicisxa bnB aot^tuxat Io *n9ia*i-sq9b b nx b9j-39v si at lo^oatih eixlT .'xo^osixb 2 Io e-aisdo -»rid- ni sx rfoxrlw 45. appointed by- the governor with the consent of the Sen- a^ ate and holds office at the pleasure of the governor. The director of taxation is required to "secure valuations and keep a record of valuations of all classes of proper- ty, real, personal and mixed, tengihle and intangihle, throughout the state", and for that purpose to "require of all officers, examiners, inspectors, assistants and employees of the department of taxation and examination, and of all officers and employees of other departments of the state government whose v;ork makes it possible to as- certain valuations, the filing of reports with the depart- ment of taxation and examination, giving information as to such valuations and the source thereof, to the end that there shall be on file, for the use of the state equali- zation committee, information as to property valuations in every section of the state." The director of taxation is also given the power, exercised by the former state tax commissioner, of general supervision of the taxation system, including general supervision of assessors and county boards of equalization, conferring with, advising and directing assessors, boards of equalization and county commissioners as to their duties under the law, and the direction of the proceedings, actions .^^ .rronnsvos arii' lo siiraBSlq sdt ie. soil'io ablcri bns ais anoJtJsjJijBY 91^093" oct bsTXirpsT at aoiisx^i lo 'loio^ttb sriT -laqoiq, 1o ssaaelo IIb lo eaoiiauLav lo inooai e qasjl Ijxrs ,9lrfi3nB*r£X bos slaisoa^ ,b3:cxin bn.-s iBnoaisq ,lB3n ,y^ sixiipsi* ol aaoqiiiq cfaxfJ lol brui ."a^tjsd'e arfi tuoxlgxroTrid' bns a:^^iJ*ai3aiJ ,aio*o9qf?ai .a^anxxosxa ,a'X90X'i'lo lis lo ,i2oiJ"£nJtinsx9 bos noxc^sxs^ "io ^namcfTCfiqgb sdi lo 399'^oIq:,i9 lo ain9rad"iBq9b ledio lo aog^olqiag bns aigolllo LDi lo bos -ac 0^ glcfiaaocr tx s9:iBm jtnow saorivr *n9i2ni9V03 eis:fa sdt -iisqeb edi diiri atio<:er lo :%nllil odt ^Bnoii.'suler atsiieo as aolifiorioJal snxvia ,no]:JBrilr.xaz9 bna aoxd'-rjxui lo wn9a tF,di baa adi oi ,lo9'!:9rid' 90'Xjjos edi bns saoiisuls^v rIojj3 oj- -il&apa gJjiJ-a odt lo 93*; ed:^ lol ,9lil no ocf Ilsiia 9i9xij- ni anoxJeylBv T^^i:"qoTq o* as noxd-^aiolni .ascfd-inutioo ^ox:^BS ".gJsi'a 9r£i' lo nocJ'093 x'^ove ,i9woq 9ii;t n9vi3 oals al noxoflxai lo tod'oaiib sriT Isi9n9§ lo ,T9fioie8x:iinioo xs;)' 9J'J3J'a isnrtol &di ■^cf b9axoi9X9 lB^9n9a anibjjlonx ..aaJai^s aocj.sxs^ 9xli lo noiaxviaqua .noxJBsilsupe lo abiaocf --iJnjJoo bna aioaageas lo aoi^ZTiequB abiBod .eioangaaa ^niioailb has snxaxvbB .xfcJ-iw snxt'X9lnoo aexJjjb tlBdi ot aa aianoxaaxiacioo ^inuoo baa noi^axilai/po lo anox^oa ,aanxb99oouq Qdd' lo noiJo9ixb 9di b::ia ^ttsI edi igbnu 46. or prosecutions which may be instituted for the enforcement of tax laws. He is also authorized to prescribe the books and forms to be used in the assessment and collection of taxes, to summon T/itnesses in any hearing on the subject of taxation, to visit the counties for the investigation of the methods used in the assessment and equalization of property, and to investigate thoroughly all complaints made to him of illegal, unjust or excessive taxation. These pov;ers of supervision were construed by the Supreme Court to mean something more than mere advisory oversight in Great Northern Railvray vs. Snohomish County . 48 Wash., 478, but the decision lacked authority since the law did not provide an adequate means of enforcement of the tax commission's order. It is evident that the state does not have, at present, a sufficient degree of administrative centrali- zation to achieve the best results in the assessment and equalization of property, V/e shall outline in a later section of the report our specific suggestions for the correction of this situation. 3. OPERATIOIT OF TEE WASIillTGTOH TAX SYSTEM ; (a) Real Estate ; The aggregate assessment of .9^ 3i£oocf add" adirsoasTi od' basiiorlJua oels ax 9E .awsl xjst lo to noid-oolloo bnB ^nsmeasaae edi ai Jbsau sd" ud aniiol onB josQdxia 9xid no aniisarf ^riB ni asoasnj-iw riociou/a ot ,a9Xi3i' noi-^sxi'aavnx arid' aol: a^tinuoo sdr ixexv od" ,ncxd"6X£d lo lo noidssiLsups brts d-nsiaaaaaeB srfd ni bsau aijoxld-an 9x1* lo adnxBlqnoo lis i^Iflai/oiorld edaaxd-savni od brts ."idiaqo'icx .noid'sxsd- -sTxaasoxs 10 isulnu .IsaallJt lo miri od ehssa ©dsiq^a sa* -^cd bsxrndenoo sriaw noxaxviequa lo aiawoq aseiiT d-itjxs'xeTO ^cnoaJ:'.'-'j--3 910x1 OBrid- sion anxiid-sflica niJ9 -i o.t ditroO , .xies^ 8fr . Yd-njjoO jrfaiao.^on3 .sv Y:3;T.r..taH n'X-3<»'-i oT£ d^^ig ni i)ib wsl Slid 9c.nxa ^dJtaoxid-ijB basloiil noxsioso orfd d"ud ,3V|> XBd Bdi lo dneaaoiolna lo =?nsoj3i 9&&sjpehG na ehlvota don .lobio a 'noiasinnioo iB ,9vsfl d-ofi 39 oi) sdsd-a arid d-ficLd dnsblvs ©i d'l -il3id-noo gvid-B'xdainxnbs lo oaogeu d-asxoxllj;;3 a .dnaasiq ijns dxieraaoiQssis arid nx ad-Iu-joi daou sxid erairtoa cd noxd-iss lod-sl a at snllduo LLsile aW .vdieqoiq lo noxd.-.j5xl3Xfp9 arid- to'i 3noxda933iJs oilloeqs luo daoqai sxid lo ctoitosa .nox'.sij^xa sxrid lo noxdoa'xioo :I8AW lo dn9ir.ae9sa3 9dB39i§3xs axLT : 9d.ads£ lissH (s) 47. real estate from 1910 to 1920 "by th.e classes as established by the state board, is shown in the following table: TABLB VII . REAL ESTATE ASSESSMBITT 1910-1920 . (Millions) Timber Lands Other Unimproved Lands Improved Lands Improvements on Lands 1910 1912 1914 1916 1918 1920 , $ 76.5 ^ 89.4 $ 93.5 $ 85,8 $82.2 $100.6 63.4 62.6 69.2 66,6 70.1 78,1 140.2 159.6 157.5 151.6 158.9 198.5 21.5 24.8 27.1 29.6 34.1 40.8 Tovra and City Lots 267.1 269.3 266.3 238.8 237.3 248. 8 Improvements on Town and City Lots 110.2 123.9 128.5 129.2 135.4 153.5 Tota,l, Lands and Improvements $678.8 $729.8 $742.1 $701.7 $718.1 $820.2 (Compiled from the reports of the State Board of Equalization) These figures suggest the conclusion that the assessment of real estate in \7ashington has been unequal and inequitable as among the different classes of real property. They also afford grounds for the conclusion that the constitutional and legal rules of assessment have .v^ IjexlaxIuaJ'as 3« esaEBlo srit ^^o OSGI o:t 0191 moi'i aiaiso lisai raids* aaiwoIIoTc siiJ" ni miode si ,ijisoc[ s^sJ^a edi yxi . 117 ait£AT (anotlilM) >S9I aiei oiei i^iei axei oigi ,001^ S.SSi 8,38 q> e.ee $ i^.es ^ a.6V $ abaci 13c1"cixT 8? 1,0? d,3d S.ea d.2d ,8i?i e.8Gi ^.1^1 3. vex 3.e3x 0^ x.i^e 3.es x.vs s.^s Si's e.VSS 3. ass C.aas C.eas X.VaS a*o.I ^ttO bna mvoT ao ainSiTxavoiqioI ,e3X ^.eex S.esX a.SSX S.SSX S.OXX a^foJ ^iO-lU Jbns nwoT ^.56 a bus I s.o*>x afenaj bQYoiqml 3,XS ao sJ-noraavonqml abttBj. baa abnaj .Xjs^oT ,028$ X.8X?$ V.XOV?^ X.S^V;^ 8,eS7$ 8.8Vo$ adrisasyortciail 9di iBdi- noiawXonoo oxll J-aagsi/a aoTiTr,!!: oesxiT X^upsi'jj asacf asxi noJ'v-nirlaBV/ ni aJ-Bias Xj391 1o ;tn9irta3 9ea>s Xsai 'io aosaslo i'naiaTixb sdt gnocis as aXcfaJiupcni bciB noisxrlonoo srft io1 abnuoia biofis oals TjexlT .'^J'laqo'ig avBxf Inscrcaaaa^B "io b&Lui Xegal om iBrrolJ-uiiJ- cnoo sriJ- d'Bdd- 48. not been generally regarded, For example, the aggregate assessment of all lands in the state was higher in 1914 than in either of the tv/o subsequent appraisals. It is doubtful if real property values in Washington were actually declining during these years of Virar prosperity, but if, as a matter of fact, the actual values of the different classes of real property were declining during that period, then the sharp increases made in 1920 were quite unjustifiable. The acreage of lands assessed reveals some interesting, and significant variations in the decade since 1910, as is shown by the following table: TABLE VIII . IIULIBER OF ACRES ASSESSED 1910-1920 , 1910 1912 1914 1916 1918 1920 Tot 3rX A.C r © s * 22,148,000 22,965,000 23,612,000 24,173,000 24,638,000 24,984,740 Acres Timber; 5,628,000 5,006,310 5,057,000 5,128,000 4,710,000 4,588,914 Other Unimproved: 10,346,000 11,183,469 11,890,000 12,559,000 13,354,000 13,767,354 Improved: 6,173,000 6,393,422 6,663,000 6,485,000 6,573,000 6,613,617 (l^om the reports of the State Board of Equalization.) The total acreage assessed has steadily increased .ai' "io iorId-jt9 ni n&di ^LQl ai. isriBJtxi as-.v ai^ia oiii at abnal Isai It iL-tiduob ei il .aXsaxBiqcrfi i'nsupsacfua owi" art* laJ-J-Bm B as ,11 i'ucf ,'(;'l"-t'iS?soiq tsw "io sxbs^ saarW aniiwb lo asaaeXo ctnaisllix) 9xiJ- l:o 99x;Isv XsuJ-ois siit .^os"?: lo 3d:: nsdi .boxisq IsrfJ anxiWJ r^.^liitloob a-xsw ^^tiaqoiq Issi .aXcfsillJ-aironJ^ aJxJjp sisw OSex ni sfcBraesasoionl qtcsiie dMoa aXjaavsi bsaaeaas abrusX lo sasatOB orfT sonx3 sbaoaJj orli nt eiioijsiisT JrifiOilinaia Las ^ittisQieiai :sXaj3v}' sniwoXXol sii;*' \;cf nwoxle ax 3o ,0X9X . IIIV SjaAT • QS9I- 0X9X (ia:c-8S33A 33H0A '5:0 flgaJaUK osex 8xex axQx ^lex siei qxex. :39'ioA XbcJ'oT o*v,f^3e,^2 ooo,8Sd,^s ooo,5?x,^s ooo.sxa.cs ooo,5de,ss 000,8^1, ss I'iodtatT a9ioA ^xe,88a,^ ooo,oxv,f^ ooo,8si,e 000,720, a oxs,&oo,a 000,82a, a :b9voiqnrlaU 'xorW-Q *afi,73?,£x ooo,^e5,sx ooo,Q'?.a,si OQO,oe8,xx e^^,£8x,.cx ooo,3a^:,oi :b9voaqi!iI vxd,£xa,d ooo,£7a,d ooo,e8>,d coo, sad, d ss^.eee.d ooo,5?x,a (.nol:fBsJ:XjsJjp2: lo i)i.3oa gJs^ta srfJ- lo a;tioq9t 9r[^ aroil) l)9a39'ioni ■^XibB9d'a sbiI bsaaaaas &-^sei03 Letot edU 49. since 1910. Of this total, the acreage listed as "other unimproved lauds" has also risen steadily but the acreage listed as timlDer lands has decreased "by over 1,000,000 acres. oi vhxch This rate of shrinkage may be Justified by the timber cut of the past decade, but the variation in 1912 is not explainable on such grounds, and the increases in the acreage of timber lands in 1914 and 1916 are significant. Again, the amount of improved lands listed in 1914 was greater than that listed in any subsequent year. The United States Census Bureau reported 6,373,311 acres of improved land in farms on January 1, 1910 and 7,129,343 acres on January 1, 1920. This is something like the reasonable and natural growth in the acreage of improved lands which one should expect to find in the state during the last decade. The assessed acreage rose rapidly betv/een 1910 and 1914, but in 1916 it suddenly dropped to a level from which it has not yet recovered. We have here a condition which can have no excuse or explanation except in the decay of effective central administration over the tax system. The most violent changes in all of these assessments occurred in the days when the old tax commission was going to pieces. The marked aberrations .ei^ lorfJ-o" 3J3 baietL agsQiOB adi ^iBtoS ainJ 10 .0161 eonia 33S9'::oB ailJ' J-ifc' ^Xx£»Be3-3 aesli oala eBXf "8i>flf?I bsvoiqniinu • 69103 000,000,1 T9V0 xQ' 1)8 3391091) asii abasL isdiaii as ba^tall 1o J-JJO locfialJ' arid" y;cr fa9l'iid-ex;t scf '^^21 o^B^iriiixfa lo o^-bi airlT 9lcfBniBlqx9 i'on at ^LQl nJt noiJ-Bixsv sxIJ- d-jjcf ,95B09b &esq_ adi iQcfralJ "io 9aB9ioB edi nt a9aB9ioni srld' bns , abnuois rioua no .d'aeoi^ingia sxs dl'SI nns M9X nl abnBl ^LQl al bsitiil ebnBl bevoiq^tal lo imjor^ adi ,niB3A 9ifT .iBS'i d'nsupoacfx/a '^hb ni beisil &sdi ^Bxic^ i9i'B9i3 sbw to aoiOB IIS,£'^'£,3 bQiioqei UBOiifl asjsneO agi'Bj'B ba:tlnU S^S,^2I,V bnB Oiei ,1 tjibjoHbL no eniisl ni baal b9voiqKil gxiJ- ©Jlil -gntdi saoa ai eixiT .OSSI ,1 -i^iiJi/nBL no 3910jb i)9voiqail lo 93B910J3 sdt at. rfi-woi^ iBiuJ-Bn bnB ©IdBnoaBOt aniijjb si-Bcfa odd- nt batt oJ- d-ooqxD bluoxia 9no xloxilw abnBl n99w*9cf ■\jIbJtqBi saoi sgaeioB bosagsaa sriT ,9bB09b JasI odi- l9V9l B oJ- bgqqoib y,laabbU3 it aiGI ni tud ,^1Q1 one 0I9I • bgievoooi iex ^on 3bxI J'i xloxriv? laoi'- 9auox9 on ovBXi xibo rioiriw noxJ-ibnoo s 919x1 9VBxi 9V/ iBilneo evtioolle to y^aosb odi ni iqooxo noic)"BnBl(p:9 10 393nBx£o iaslotv jsora exiT ,s:i3ie\a XB^t gxf^t lavo noxJ-BijainirabB edi n9ilv; a^Bb oxiJ- at b9iiJJooo aineaasaaas oe.sdt to lis at anoxJ-Biiga'B b^^t^a 9xfT .aooslq oS snxoa 33vr noxaairatnoo xb* bio 50. in assessed valuation which accompanied the decline and disruption of the tax coramission resulted in great inequal- ities of tax distribution, some of the effects of which are still evident. This disastrous experience should serve as a warning of " thie unwisdom of interfering with the orderly procedure of tax administration. Another by-product of the system of inadequate supervision of assessments is the failure to secure the immediate listing of lands clear listed for patent by the state and the federal government. These lands are taxa.ble to the individual after the order has been given to"' Issue the patent even if the patent is not actually issued for some time thereafter. It has also come to our attention that large tracts of railroad grant lands are not listed for taxation. These lands cannot be listed until they are surveyed, and the survey requires the cooperation of the railroads, the state and the federal government. In the past the railroads were not always willing to have the survey made, since there was no market for the land at the price established by the government. Now that this mar- ket exists the roads are anxious to complete the surveys and in some instances the railroad companies have had on .oe bns entloob adi bdjfcosqmooos rioirlw nottsuLav bsaaoaBB ni -iBupsai isiei'Q nl bsi'Iixsai noiaaiiaaoo xst sdi to noi^Jr/inalb xloJtxlw to Qioalta srf* lo saoa .noi^i/cf Jt'i^taib xbJ- lo asi^i bljjorla oon9i-x9q>:9 euoiiaaeib elriT .i'no.blv.s IIl;t3 91b xfJiw ^^jc1^'ia^c^^i "io mobaiwnx; acLf lo an-t^i^w j5 qs svioa .noid-.OTd-aifixrabs XJ3J- to siJjbaooiq ^^Iisbio odi aiBijpBhBai. to rae^sYS QXiJ to ^^owboiq-^d %3dionk Qdi 31U093 0^ aisjlisl odi ax a^tnoacaaaas tc noiaxvieqtra sxiJ- TCd cfnsJ-Bq lot beiztl ixsalo abnsl to anicfsll scfaibSiTaj:!! 9lcf.GXBd- 9i..i abnjsl easiIT ..tnsanisvoB Ijaisbst 9ri;t bns of si a Quaai. oi navlg naad asd isbzo edi laits Isubivibal edi oi not bsuaai ^IlBWd'Ofi ion ax ctns.tsq add" tx navs d-nscfaq sdd' nox*n9d'd'B ijuo oi 9cioo oals a£rf d^I ,i3it^3i3di sali axnoa bQd"aJtI J'on 3':.z abnsS. irteig baoiIXBi to aiosiii 93x3! i&di ^lodi Liitiu beialL 00 J-onnso abnel aaariT ,noi:i3XBi lot to noij"J3ioqooo edi sgixjjpai x,3vil'o edi bar, ^bQ^c^viua 9-x.a nl ,d'n9iiini9V03 l£'X9b9t edi brus 9d'j3d"3 edi ^abaoiLt^'i sdi edi evsd oi anlllxw a'ljBwlB ion 9i9w absoilxsi orfj' iasq edi adi is basi adi not ie:iiBsa. on esw aisxtd- 3onxa ,9bBia ^aviua -•usni aixIJ- isidi woM .d-ngrraigvog erU" A^cf bedalldiiied aoxiq a^eviua edi aJ^oIazToo oi auoixns sis abaoi ariJ' aialyio ioA ao b&d evBTl seiciBqaoo baoilist edi aeonsiaai eiaoe at baa 51. deposit for years with the federal treasury, the money to pay for their part of these surveys. The state and fed- era,l governments should be urged to hasten the measures necessary to complete these surveys. We cannot avoid the conclusion, based on a con- sideration of these figures, that the assessment of real property in the State of Washingtoft has "been very inaccur- ate and unequal. Undoubtedly a considerable quantity of lands in the state has escaped taxation altogether, v/hile the peculiar variations in the assessed Valuations of cer- tain classes give additional confirmation of the deduction that very great diversity has prevailed in the basis of assessment in the different counties. There can be no effective readjustment of the tax burden until these fundamental inequalities of assess - ment and equalization are corrected. Indeed, there can be no accurate determination of the actual extent, or even the existence of these inequalities v/ithout such readjustment and correction of the assessments. The first step tov/ard the relief of any taxpayers from a burden which they now regard as unjust, is the thorough-Roing reform of the as - sessments. ...l':- .15 mb&l ha& ei&ia srfT .ax^r-iua eaadi lo ii-:iq t'ledi 'iol vsq a9ix/3B9a sd:t nsiasd oi bagiu si blwcrfa avtnonn^isvoa L^i^ ,ay;3vijj3 aa&rfJ' a^slqmoo o^ ^Jrts3^oo9ff -noo B no I>93Bcf ^noieuLoaoo odi blovs toait&o 97/ Lb31 1o Sastaaaoaas 9di icdi ^aaitrsil aaarfd- lo noi-toisbis -ijjooani ^^ist aoacf asxi aoi'snirfa^Vi' lo oiaiB odi ai. -^iieqaiq^ to \itinBSjp eL6ssi9btanoo b ^Ii)9J"cfuoi)nU .lojjpanx; bciB eis Bltdv ,i9rt^9aoi'Ij3 aoxd"BX3J" bBqBoae aed aisia Bdi ai abnsi -190 to aaol^BUlav bsaasaaB adi Cii anois&lisv zalLuoaq^ Qd& aotiouhsh edt to noJt JscniTtaoo iBaoiitbbB evla asasslo ni.Bt iO aiescf 9rf;t ni balxisve-cq s£\ri \;J"J:ai9vli d-agis -^lav isrii .asiiiwoo iaaiat'tib ed:f ni. insaaaaasB Qdi ^ to tnS'JJJBSJtbBO'Z 9YiJ09ll9 Oil 90" n3S 9T9XIT - aegaajB ^o aaiiiZBupdni lB:tn9t'iB uol^^siljs/jpa .bn-s tnsm. n9V9 '10 .J'ngJ'xg leuJoa ed& lo itoi J'BnifEigJ'gh 9i.Bi*;ooB on ed iasaiiautbBSi doua tuodiiy! BdLStlBijpeni. ^ ea s di 1o 9on9.J3.tx9 ^eifJ- b'-isvoi qeia ia'iit SfIT .ainag^ifc&asj^ ..'j^o lu noi:j"ooiioc) bii 3 won •'^ariJ' xioxxl'.? nghiuci' a wtoi":. aiox.Bcjr.Bf y,^^ to 1:9J:X9i odi - aB edi to fln:o'x9i Ticiior^-dT\uoiodt _^ edi ai .iautnu aa bigaa-x 52. ("b) Personal Property ; The above conclusions covering the practical operation of the property tax in Washington are further sustained and confirmed when we turn to the results of the taxation of personal property. These results are surimarized in the follov/ing table: TABLE IX . (Millions) TES ASSESSMENT OF PERSOI^AL PROPERTY IK WASHIITGTQH FOR CERTAIN YEARS . ~~~" " ' 1906 1910 1914 1918 1920 1921 1. Tanpiibles : """"^ 1. Farm Animals 15.0 19,3 20.3 26.2 25.9 19,2 2. Vehicles 2.1 4.1 6.9 21,7 34,6 38,0 3. Household, Personal, Off ice, Musical In- struments 11.8 26.2 27.4 25.4 26.8 27.4 4. Too Is, Machinery, Stean Vessels 10.0 18.7 20.7 22.3 34.3 33.9 5. Materials, Manufac- tures, Merchandise 21.2 33.6 41.2 50.2 82.3 72.4 6. Personal Property of Public Utilities 18.6 9.8 15.1 17.9 22.6 23.1 7. All Other Tangibles 5.8 11.7 8.4 5.9 7.3 6.1 Total Tangibles 84,5 123.4 140.0 169.6 233.9 220.3 2. Intangibles ; 1. Money & Credits of Bankers, Brokers 4.8 12.5 ,5 - - - 2. Moneys 3.1 1.3 .3 ,2 ,1 .08 3. notes, Accounts 3.0 - - - - - 4. Bonds, Stocks, Shares ,,7 .5 12.0 12.6 14.5 15.8 5. Royalties, Patents .1 1.1 1.3 1.4 -_ Total Intangibles 11.7 15.4 14.5 14.3 14.6 15.9 3. All Other Personalty: 1.8 3.6 3.0 1.4 1.5 1.8 Total Personal Property 97.9 142.4 157.7 185.6 250,0 238.1 Less Exemptions 17.1 30.9 32.8 28.1 Aggregate of Taxable Personal Property: 80. S 111.5 124.9 157.5 250.0 238.1 .S3 anoleulonoo avods sxlT : Yj'i3C[otl I^noaia g: (cf) 9w nsriu faaunixnoo Las benJLs&evs lediiul bib no:f-a>nida&\I :9lcfjs^ gnlvroLLol 3d& tit b^stisr/nuss 916 B^Im'^i '.ssriT (anoilliL') HIATflaO flO'T HOTOPIIH3A77 ;il YTHEL^Ofl q. J[ATI03Hai:oo^3,ai)«oa: .^ aJ-n9oj55,2«xi'lB"\coH .3 89la xsnsdTiI Ib^oT :^;tIi3noei9l 1311*0 IIA .£ ■^^leqcil lBnoai9«i IsJ-oT SicfsXST xO 9j-B391p,3/w . _ ^.I £.1 I.I I. e.3i 3.1 a.^i 3.1 £.^I ^.I a.i^I ^.31 0.£ a.£ V.II 3.1 I.8£2 0.032 a. 381 1.82 7.?3I ^.2f^I 8.2£ G.0£ e.ve I. VI I.8S2 0.032 3.?3I e.^2I 3. Ill 3.08 53. NOTE TO TAiiLE: The tax law provides a long list of separ- ate items, 51 in 1921, for the listing of personal property. These have "been grouped together in the alDove table. Bank stock was reported with the moneys and credits of bankers until 1912. Beginning with 1914 the item 'bonds, stocks and shares' includes bank stocks only. 1. Tang:ible Personal Property : It is not possible to check these figures at every point with data obtained from independent sources. The federal census valuation of live stock on farms, as of January 1, 1921, was ^2,292,072. If we assume a full fifty per cent assessment two months later, the assessors were $15,000,000 below the census valuation. A comparison of the federal census count of the different classes of farm animals as of January 1, 1920, and the count made by the assessors two months later in the same year is illizminating: TABLE X . Class of Number reported by Number assessed on Animals Census . Jan . 1 . 1920 . March 1. 1920. Horses 314,740 244,711 Mules 24,338 19,321 Cattle 605,553 445,566 Sheep Sc Goats 654,115 585,543 Hogs 264,747 121,817 ,ce liijaAT OT ETOK -lijqss lo iatl s^ol ^ a9aJ:voiIn.ecf Ic 8d-xf??io f>a6 e^isncTi Qxld' i XiZOCCTi^i lCC1.C3t5'v[ eLCiJ^^CLSi: . I t£ eoirjv.tt soeiii Jioorio o;t ftlcfxeecc 5-on si i"! ,890iijr;c inobuQqobctx sxil bonicido eisbb il^in J-niocx vyiDvs aa ,efiiifi!: no :iood'3 evil lo Acxd'swlfiv ej^cnso l£isi>9l srfT llUj £ SrJJEBB £»V? II ,S re, St-?., set e£W ,IiJCI ,1 X,T-SiL'C£Z xO .colc^si-'Xt'T sL'enec sxld' wclso^ 000,000,615? sisrr sri* ^0 vtnijoo aueriar- lisrtafosl srio "io noeii;5qaoo A .OS^'I ,1 v-^^J-'^'S'^ ^0 as sIsfiiJtfte mifcl lo eoaa^Io oaeiolJib eiii as. i^isiL adinoiz owo eioaeeeejs orfi' ^ccf sLjse: iriuoo sriu bn£ igni^eninujlli el i£.e\ oeiso . X BJSAT no bo?.esBBii iscfrni/Ti ^d I>Svr:oqsi npcTmwTI to asJBlO . S9I^ . I flQ i-Bla .p $:6I .. X.ngT. , aueneO aJgrninA IXV./^^S 0i-T,J>X5 sseioH xae.ex eee.j^s asXuM S62,ei^^ eee.acd eXJd-jso 5f^a,88e cXI.f'ed acf^oO :)?- q96rl8 7X8, XSX V*V,^6S esoH 54. There were listed for taxation in 1921, 137,171 automobiles and motor trucks, and 1389 motorcycles. The secretary of state issued for the year ending February 29, 1920, 173,934 licenses, and in that part of the next fiscal year ending on September 30, 1920, 138,092. The bulletin of Descriptive and Statistical Information for the year 1921, issued through the office of the Secretary , " id of state, contains the statement that for the year end- ing December 1, 1921, Washington had 192,434 licensed motor vehicles. These figures do not allow for duplication . due to sales and transfers of cars, and the losses through accidents. The secretary of state estimates that about 30,000 licenses are issued on duplication, but after making this allowance it is evident that there are several thous- and motor vehicles untaxed in the state. The average as- sessed value of automobiles and trucks in 1921 was only ^276.48 and of the motorcycles, $65.70. Doubtless, many of these untaxed cars escaped through the $300.00 exemption. Agricultural implements, farm machinery and har- ness were listed at $3,534,116 in 1920, whereas, the census bureau reported a total value of $54,721,377 for the im- plements and machinery on farms on January 1, 1920. .^3 I?I,V£J: ,isei nt aoitRXBt icl beieil snsw sisilT XiGUide'^ gniJins iss^^ siii tol besjeet etsie lo ^ajsienose ex£T ,seO,88I ,OSei ,0£ locTmeiqaS no snitrte assY Ls^oeil ■\rT:£d-si09c; orld- Tto scJfcllo srl:f f+suo'irfJ- IisweaJ: ,I2GI •lcs-^ sxi* -£>n9 iB9\: odi loJ. .tsiiJ- ^n9fn9 -fid's grW Bni&iaco ^QteiB to loioa beensoll ^e^,SQL bBd rolKnirfBjsW , ISGI ,1 •xgdrasogCI sni . noiJ-fiolIqui) aol woIIb ion ob asiks^il gesrlT ,89lolri9\' d^iso'ufJ 8 988 01 srii hns ,anBo "io eietsoBii bne eolBe oi Qub tUQds tBdt eeiBEiltea eoBie lo Y'i^>^2i09e oriH ,Htn3bioosi anx>L6G "isSlB iud ,noJ:o£OlIqi/i) no ^awesJt sijb egsngoxl 000, 0£ -aifcrld' Ii}'i6V98 die. oiedi iedi ictebive aJt ii. sonewoIlB exrfJ- -ee 9SJBi9vi? 9rCr ,9;t'£d"8 &di nl i39XPdnu e9loiri9v lo^tcn bns Xino BBW IS6I nx a^tox/iJ- i)n£ eGlicfoxaoJ'WB "io suIbv beeese XnBtii ^eesliduoCL .CV,56$ , eslorcoioi'oci 9x1* lo Lob S^.dVSf, .nox:J'qin9xe 00,00£$ 9xfJ xJgjLfo'xii* Jbsqsoes saeo bsxBinu sssdi lo -uBd ba£ x'^9nxf£ojsm iXtsJ ,8d'n9m9lqoJ: iBiuiluolfsJi 8uen90 edi ^aBeiBdvf ,0261 ni dll,i^£2,£$ *jb baietl. eiev sssn -ffljt edi io1 VVC^ISV^i^S^ ^o ©jjIjbv lei-oJ b ijec^iocsi UBQisjd • CSei ,1 \;r3:£5ijnjsTi no ar.xs'i no ■iC^9nlx£o£rri ins 8d'n9xii9lq 55. Similar discrepanciea occur in the range of aver- age valuations of farra animals. For example, the assessed values of bulls for "breeding purposes were equalized in 1921 at |18,33 in San Juan County; at $25,07 in Skagit County; at $21,97 in Thurston County; and at $356.00 in King County, We are advised "by stock men that the same "breed of cattle are found in all of these counties. Again, horses three years and over range from fl6.24 in Thurston County to §39.75 in King County, Milch cows are assessed at an average of $21,01 in San Juan County as compared to $36,50 in Pierce County, The average automo"bile as- sessment varies from $100,40 in San Juan County to ^308.30 in Walla W&lla County, and pianos range in assessed value from §42.77 in Wahkiakum County to $109.14 in King County, It is a matter of common knov/ledge, which has "been effectively demonstrated "by every day observation as well as by definite tests in other states, that the tangible personal property of farmers is much more effectively and accurately assessed than the personal property of merchants, manufacturers and large corporations generally, VJe have made no tests of the assessment in this state of the latter classes of personalty, but it is not difficult to imagine the inaccuracies and inequalities which must prevail .aa -19VB 1o e^ns.1 erjt- ni. tuooo esioneqsioeii; i£l±ml8 beeeeeeB edi ,6lqrrisxs no'?: .alsxnins mnsl: 1o anoiJBulBV sgc ni I)9silB)jp9 eaov; ssncqiuq sniJ^ss^cT toI ellx/cf loaet'Isv ctiaa^ia nl VO.eSv -£ ;v:crnj.'o0 n&uZ hjeB nx 6G.8I$ *s I2GI nl 00.6S£;# ^£ bns ;-v:>^nwoO Ko;^8'ii;jclT ni VG,IS$ ie \\^insjoO smea sxiJ' d-arl^ nsm ^^oocfe ^cf Jbeeivtf; sir- aW .^d^nwoO 8"-t3t ,nie3A .asiJ-niJoo scsdi lo II-s nx bnuol sixj elc^j-BO "io besid nod"aii;rrr ni ^2.6lf caoit ssxisi isvo bne ai£Q\ QStili aoeiori ijeaesaea sic awoo rfoIilT ,\^v+njjo0 3ni}I ni eV,&S4^ ci- y*«^o^ £>snBqxaco bb vJniJoD n£,uT, n^3 ni IO,IS$ lo eajsieva ns J"j5 -ss eltdooioiuB ssei&VB siiT .^(^i'njJoD aonsig; nx 0c,8S^ oct 05.805$ oi ^tnuoO neuJ, as8 ni 0^^,001$ ktct'I esiiav d'noxnnasa 9x;Ifiv beaz&BBB ni ©snei scnfiiq ijne .Yd-nuoO bII-^ bIIjbV/ ni .\;c)-nyoO giJiX ni *I.e0I$ od" \:cfnjjo0 mu^LciijixlfiV: ni V?.S^s? moil noocf Qssl rCoix£v7 ,93i-sIv.-on::[ nonmico lo isJ-u^m i3 ax d"! Il9w ee noid-±-vi9scfo ^cb ^i•IsvQ ^cf beiB'iiencmeb ^IsviJ-oslls eXcfisnsd' oxfd' ^bxIJ ,Beisia -ittrito ni a^as^ ai-inilob ^d ax; bns Yj^s'vii'oe'tls snom dours. ai eisirriBl ^o vi^'^^QOTCC;' Ifinoaisq jaJ-nBrJoisra lo Y^'^QqoiC: iBnosioq srl^ cmdi bescsoss ^XscfBtirooe svBri sW .■v^IlBisneg anoid"£;ioq-ioo 9sir;I bne eis'iuios.^vrtBa'. sifcf "io 9*B;ta aixfJ- ni itnomeasaeB adi lo aJ"e9;t on QbBssi 0* *Ix/oi"ixib i'on ax J'i &tj6 .Y^Icncaisq lo eocaBlo seiiBl IiBV9:tq tsUR'i rxoiriw 89i^ilBJjp5r:x bnB ssioBiuooBni 9n;t onx^Boi 56. in the assessment of personal property in urban centers in the light of the conditions which have been found in rural districts. 2. Intangible Personal Property ; The table above shows tliat there has been no change in the amount of intangibles assessed since 1910, and also the vastly more significant fact that no attempt is made in Washington to reach the great bulk of the intan- gible property of the state. This effort was discontinued, and tlie general property taoc thereby abandoned, by Ch. 146 of the Laws of 1907, which excluded mortgages, notes, accounts, moneys, certificates of deposit, judgments, state, county, municipal and school district bonds and warrants from the category of property for the puspose of taj:ation. This statute was tested in the courts and upheld by the Supreme Court except in so far as it applied to moneys, which, in the language of the decision, "possesses such value by way of immediate purchasing or exchange powers as in effect robs it of a mere representative character and clothes it with the dignity of property having intrinsic value." (state ex rel, Wolfe vs. Parmenter, 50 Wash., 164.) .sa ct bnuol f;9scf svexi rTolxlvr enciiibnoc e^ilt lo i-xfei.C srii ffl : \j;isqot rq: l anoe'taq: el6lT\^.s.& nl .S on nssd e-cxf aiedi isxl* av;oxle svocfe slcffl^t sxiT ,Oiei oonie tsonssee e9lc'l3nj3*ni lo JTiuon;^ erf* ni Qgnsrio tcEisi^B on j-x,rij- J-o-el d'osoilinsle siom \;X;Ja£v 9x1- oeli: i>nJ3 -naJni srlJ- lo aTIucf c^jBsria edi- doee'i oi no^gnxxiaeV.' ni eb^c: ei ,Jb9i;ni:tnooai:i5 sjbtt ^ticll:© eiilT .9:^3*3 srW ^c ^itisqoiq elo'i.^ .xiO \;c .xjanoxjascfB T^asieirlcf xfii yj-xeaoig Ig'xena?^ srU- bns .ascfon ,a8BC3;}-iom ijeijirlox© rioirhv ,70ei "ic awsj srl^f "io o4-I .a^nan^S^J^'r. .^ieoqsi) 'io ee^solli^tiso ,8\,9noffl .aJ-ntrooof fcxiB ebiioJ ^oliieifc looxfoR Jbrte Ifiqioiaum ,'^*njJoo .s^eJ-a "io saoqajjq sdi io1 Y^igqoiq lo ^io2.9i"fo erl^ nioii eJnB'iiBT/ ,nox^£Xsd' blsdc^u ba^ ei^sjoo sdt al heiee-s --.w BiuiBia eirlT ocf bgllqqe J-x es imI 03 ni J-qeoxa d"xyoO 9in9iqi;5 edi x'^ eeaegeaoq" ,noieio9i) edi Io sasusftel silJ^ ai .noxxiw ,eY9noni e'i3Y/0G e-QRi-do:ze to •gnieBdz'Luq eiBibsimiii Jo \;sy.' y;d sulsv rlojje leJ-oxiiBHo 9vx^£;tn9S9nqQi 9i9ra jb Ic J x atfoT cfoe'tig nx as oianiid-nx snivBfl \^i9qoic "io Xotn^tb tidt dtitf dl aed&olo bnfi {.i^dL ,.ri8JsVy' Oc ,::£crn9flnB^I .av 9l:IoW ,l&z ;:© ed-xscfs) ".©wlxsv 57. Altliougla this decision became, by virtue of the authority which issued it, an integral part of the Washington tax law, as a modifying interpretation of the statute, we are unable to concede the logic of the argument or the con- clusion to which it led. This argument is as follows: (1) The constitution, in prescribing uniformity of taxation, does not contemplate double taxation, >* (2) The taxation of property and of credits is double taxation. (3) Credits are therefore not property for pur- poses of taxation. There are two uniformity clauses in the consti- tution: one of these requires that all property not speci- ficsaiy exempted shall be taxed in proportion to its value, and the other is to the effect that every person and cor- poration shall pay a tax in proportion to the value of his, her or its property. These clauses embody different con- cepts of uniformity and they are not always wholly consist- ent. The court chose the first rule of uniformity, and proceeded to hold that this rule was satisfied if all prop- erty were taxed once. In other words, it was held that the constitution did not demand, and certainly should not be construed so as to cause double taxation. The court .ve 9iit 1o euiitv \;d ,©irieoscf noiaioel) etdt rIsworld'IA noJsfiiriejBW etli lo ^leq Ic'iB9;tnl n£ ,;^i bsuaet r.oiilw Y*-tiori*UB -noo sriJ no J-nsfiUiaaB sxid- lo olyol sil^ ebaonoo cJ- sIcfBnn stb rawollol 8B 8i dnocujj^tB eiJcIT .i>9l :ti rlcxtf* c^ noJ:s.ulo \iiB\io'ii.nu ^atdiroeeiq tit ,noituiiiBc^oo axfT (I) • noiJ/JXB^t sldijoi) s^tBlqc^ d-noo ^on eeob ,noxJ'BXB;f "io 8i ettbeio lo fcriB -^iticeqonq lo nold-^XBi' srfT (S) .noi^BX^^ oXcfiJot) 'luq lol ^;^•x^qo1q i)"cn sio'isisrl^t oib ad'J:i)3iO (£) .noxd-fiXB^ Ic eeaoq -ii^snoc 9xi^ ni esaxiBlo -z^Lv/ioJlnu ovri oxs oisxlT -xo9qe ioci \ii&qoic XIb i-arli- eaiiirpsi scdiii lo 9no rnoxdiij ,9iflB\- EcTi oi-- noid-ioqoiq ni l>9XB;t ecf IXjsrfe fcsJ-qnsxs yJ^IboxI -100 bns nosieq \;i9V9 ifidt d-oslls edi oi ai icdio adt hne ,3lii lo oi/lBV srid- oS tiotiioqoiq ni xbj' b ^CBq IlBxts noliBioq -noo ineiQllib x^odi^B Roajjelo 939xlT .y^iteqoiq eii 10 leri -Jeienoo -^Ilonw a^BwIs ion ©is ^^ed& btiB xitaiclini: lo ed-qeo I)nB ,^i*iniiolinu lo 9Il'i tcntJ. odi eaodo iiuoo sdT .*ne -qoiq IL& li i>©xlsid-£a esw oIi;i airfJ- d-BxiJ blod oi bebsaooiq iBdi bled eiiv/ it ,atiow i3r(;ro nl .sono bexBi siaw YJ'ia d'on hinoria xlatsiiiexi bns .bmoish ion btb actiuitienoo sdi iiuoo sdT .noxJi^xBd" eLducb 9euBo oi ee. oa bautie.n.oc) ed 58. did not recognize that so-called double taxation, if it "oe universal, involves no injustice. It did recognize that the evils of the general property tax arose from the fact that universal teixation of property and credits at a uniform rate was not possible, and that there was widespread evasion of such taxation. The conclusion which it attempted to draw from this argument is a complete non-sequitur . for it is, in effect, the conclusion that credits are not property for purposes of taxation. The decision brushes aside, as of no consequence, the constitutional authorization to deduct debts from credits. If the framers of this document meant that credits were not property, this is an empty grant, and the conception of property, adopted by the court imputes to those who drafted the constitution a deliberate inclu- sion of empty words in the organic law. We have here an instance of the folly of beating the devil about the bush. Both the legislature and the court wanted to recognize and deal with the taxation prob- lem of the evasion of intangibles under the high tax rates of the general property tax. The constitutional rule of uniformity stood in the way, and the court, in order to effect a solution, comes to the very strained - and to our '.85 ii. ti. ,noJ:d'Bx/5d- olduob bsllBO-oe ttnii esinsoooi d-on bib esinsooo-x bib SI .Qoi^eiiorri on esvlorni ,l£ei&vlru. eo ffioil eeoiB yzni ^cJ"i9coiq iBisnsa ori- lo ellve ecii is3di Btibeio biiB x^taoqoiq lo noiJ'x.XJBd" leaievini; d-^il;t iozJ. eiii 8£W oisrld J-Bxi^ bae .sldieaoq ctor bbw sjjsi nnolixtir b J-b noxai/ionoo sxiT ,aoli£^si xIojjs lo noxesv© ^esiqaehiw oielqaiQo jq ei ^xtsturjiic eixiJ moil yi£ib cJ- iisJqmeJd'ij ^i rioiiiw i^xi noiRL'Ionoo srl;)- ,i-0£'i'i9 ni ,8i Ji lol . riJLfJ-lupsr.-non .nolis2KBi lo 893oqiug toI x^iaqoiq ioa bi£ aiibsio .so-nejjpeenoo on "io 3j? ,ai)iB£ esrfawiu ncieiosij adT noil 8J"cf9b JoiJiisb cd" naliBSilnodSsjsi IzciolitJtli &[^oo sxij- ;tfif;^ i-nasm ineriuoob eiiii lo aiSiriBi'i erlJ- II .eiibeio bii£ ^iasig x^qms ns. al eirij .•^j-nsqciq J-on srrew atibenc aajL'qiiii c^ijuoo sn';^ \^^el Siio T:o ftoitfiloiv e ee noxei/Io lijnoilw^ld-anoo srid" 'lo nnorf aJtxfd- gnisexa ni &uC be-}iooltero xLotitttB aBii J-ii/oo Qdi ,y,timio1lniJ lo 6;:Tra[&Ilii -i8q anoEX ■^tttsnolink: lol bIIbo xioxriw fioiaivoig ^exij-o sn'ct of> 9\V .^i'lsqoiq Od noxd'aoqc'ig ni anoiJ£noq.ioc bm^ enoe. -IS J Is lo soioiio a;J-x lol diuOvO LsnieeX arid' ealolitio ion gnods nsbiud xeJ' lo xSil&upe noxnxqo tuo nl Sud ,3©vxd"£n Ix j-^id-isqoit^ od- xiilsis^o sb ;fnB*ioqicl e£ eJ-iup ai enosisq aaerld- lo nor.d'^ilioncosi isrlS exjoxvao ai d^I .os s'xorrt J-cn laeie vinjj ©no ax aisrid noxlw ^^no olo iesoq ei bqIui ov.'i -aud" gnxoi) enoxd^ioqnoo nsxsnol on xij-iw .noid-ox^exnui, xev+ -ijjosa sfiimvo enssiJ-xo Ifiuiixyx^ixx on bns SoBd-a arid- nx aesnx -ivcfo Koxd-xljnoo ^ xlou8 .■'id'isqo'iq nsxoiol no Jbssccf aeidx fix anoeisq smoB ,\iBbod' d-exxa d-oniiso bns. d-on esoi) ^cJ^axro lo rrrro'i- orld- nx lid-'xcqcici lisrid lo lis svaxf Y'Cni ed-Bd^a e.idi abnod Lhb xood-e oxld- lo 10 .sdBd-se Isa-r. nsxenol no eogBgd-ioffi ^nsM .sdBda exrfd- nl eeanxaucf on of) rfoir&v anoxd-Bioqioo lo iioue ni enoi889Bsoc£ tterii lo dtcBq js svBii anssid-io Texld-o aXa'BXBd ofid- cj sisie\B XBd exid lo noxdoxidesi siIT .eirrxol 60. physical property located within this state is therefore a violation of the constitutional rule of uniformity as aiaong persons and corporations, for the individual whose wealth is based on physical property located outside the state is to that extent exein|)ted frora state and locsQ. tax- ation, and is therefore "being supplied gratuitously with all of the benefits and services of government at the ex- pense of the owners of real and tangible personal property. In seeking to avoid double taxation of this property the Supreme Court has impaled the state upon the other horn of the dilemma, inequality of personal taxation, and from this there may be no escape but by a constitutional amend- ment. In another respect this decision that credits are not property, produces an inconsistency in the tax laws. Credits are not property for purposes of the property tax. Yet the inheritance tax applies to "all property within the jurisdiction of this state, tangible and intangible," There may be adequate legal grounds for this inconsistency but it seems to us extremely illogical to use different definitions of property in t\70 tax laws. Doubtless the laxity with which the present inheritance tax law is enforced .od eio'tetod:} ex ei&ia atsli aitittvf bdiBooL \,ii&qoiq_ lsotexfied"qaex9 nsacf sfixl X'^'^^SQOiq "io sai^Io aixld ^sy; ion svBXi ed'sil drismaesaae srfi' aicsv d-nsosT nx J^ns ,n&ir!Jtqo tbeiail sd l)Iiwfco T^sxli xiolriw isbnu sfixi)fi6xl £ fconlBdrtoo nsva ai aidi ^ailbdio sniJosqasi noxexos^ svodjs sxiJ- "io wsxv nl -noo cl sIdxsaoqinJ: ax di d:gtrodtla ^eaiiJoo oaiw b aasld-duol) .tlbozo £ ssnea Iboi y;na tti ex iiiooJ-s lo s'lxjxla s iBdi^ 9i)9o "io aasn'589ldxjj'il sdi inemssstii tsjod&iw obaoaoo sV/ Ixjionaa 9xi;t loJxn; ^id"i&qoaq ©Idisiie^ni xsii oi iqm&&iB odi 9d oi npi ineic-.t luc go al Je arfJ-xsl at it bna ,XBi Y^tisqoiq - atb eh'. i c:t a flXLnsfuaioosa ag 10 at an^vsxJQd a£ bcoie'x e biw 9di ci JaeYS-x bluoda n oJaxixjiaaW. lo &Je;tS axtJ^ ;tfix£J' nqjeaxr o 62. universally discredited plan of the general property tax whereby all intan^llJles are made taxable at high local rates . V/e do believe, however, that the state would have been in a vastly better position if the Supreme Court had denied the validity of the Act of 1907 and had put squarely up to the people at that time the problem of so amending the constitution as to permit the development of a more flex- ible system of taxation. The legislature declared in the act which provided for this committee that real estate and tangible personal property were bearing the entire burden of taxation. If this be true, it is a situation that has been created by the acts of past legislatures, and by decision of the highest court, in the policy of complete exemption of intangible property from the property teix with no thought or suggestion of alternative means of reach- ing the owners of these classes of property, and in disregard of the constitutional rule of uniformity of tax burden among persons. In a subsequent part of this report we shall discuss further some alternative step to be con- sidered as the means of remedying this situation, 3 . Taxes on Corporations ; We pass over v/ithout detailed comment the .Sd nl tiascf svjarl LIuow si'sd's aili' tadi .fsvaworf ,9V9il9cf ob 9\7 fcsinai) hsii ^"rL-oO omsiqifB 9ri;f "it nolJiaoq nsd^oscf y-I^^s-'^v jb qjj ^c^01BUp^ Smi baii hns. VCei 1o ioA sdi lo \iiblLsr eiii arlJ" gniijnsiTjs oa iO icelcfoiq 9x1;^ gmict d'sricf ie elqosq eriw od" -xell 9T0CI s xc d'ngrnqolev©!) ©rlc^ iianeq oi as, aoiiuiiienoo 9x£d" ni: bet£.losb eiuisLei^el 9riT .noxJ-BxeJ- lo ras;fe'^3 gjQJt Jbne 9J^B*a9 Ls9i iGtii ee.iiladiioo ehii nol bebivoiq rloirlw i'OB n9i)ijjcf snid-ns 9x1^ gnxn,E9cf stsvr xiisqonc lar.OB'ieq glc'lsn^^ aed iatii noiSi^vile jb 3x cfi , 9i;iJ" su axr;d' 11 ,aotiBX8t lo ■^cf bne ,39'ix;d"Bl9xa9l ^aaq 1c eJoB grl* \;cf l)9d-f59io n99d s*9lqraoo lo ^olLoq. eiH al ,*iuoo cfeexigxxi 3ciS lo noxRlcoi) xs* Tid"ioqoaq edi aoit ■'^J'aQqoaq 9ldis^ifi*^--i "^o noJ:d'rri9X9 'doBOi lo BXiG9in 9vi^F.tn:9;HB "io noxJ-agsai/a 'xo irist/oxl^ on rU-xw ins:^e'iaib ai bnc .■\^vi6qoic lo aeeafilo seedt lo aiyrnfo edi ^ni n9iiix;cf xxid lo y,ih-no1liw Ic slui lenoiji-'itxJ'anoo 9Xi* lo 9\Y ^10091 eldi lo iiBC itnesjpoa^ua & nl .ano?.i9q anome -noo 9cf c;t qgJ'e sviiziiiaiLB snioa i9rl^ijjl aauoaif? IlBrla taoLiBUjte eidi 3riX'if)9ra9T: lo aacgm 9xfJ sb be'tebia : enoii£iocnoO no ggxa T . £ sxtf ingiijcion beliB^ob iuodii^ levo eeeq 9Y/ 63. filing fees for tiie privilege of securing a charter of incorporation fron the state and the annual license fee, exacted from all corporations, for the privilege of doing business in the state. These license taxes are adminis- tered "by the secretary of state, and we find no evidence to indicate that they are not well administered. 4. Public Utilities : The facts regarding the assessed valuations of the different classes of public utilities, which are under the original jurisdiction of the state equalization commit- tee sitting as a state board of assessment, are presented in the following table; TABLE XI. STEAM RAILROADS Actual Equalized ELECTRIC Actual RAILWAYS xjqualized TiiLE GRAPH Actual iiaualized 1910" 257,405,646 100,157,754 37,656,306 15,878,343 :767,770 298,845 1912 .342,515,593 ;135,522,077 : 23,246,633< 9,969,343 •887,623 •357,955 1914 '342,157,237 ! 137, 538, 331 ] 49,211,280 '21,565,119 •887,780 '362,939 1916 341,917,939 '138,652,569 45,462,600- 19,446,483 •910,934. 369,580 1918; 340,502,230i 133,355,179' 43,718,875i 18,702,098' •767,332' 310.774 1921, 337.651.363' 136.165.576: ^21.978.145! 9.070.632 '314.977] 329.799 #. Puget Sound Traction, Light & Power Co. (16,636,000 acquired by City of Seattle - ( 7,675,000 Western 7^ashington Power Co. acquired (39,000 by City of Seattle - (17,945 .53 ^0 i9^Tsr£o B gnlii/oee to B-gf^Llritq sf.i lot aeet gnllil ,991 9E5n9oJfcI launoB 9XU- bciB sieis eiii coi'i noicf-£ioqiooni Snlob to assliviiq srio lol ,enoxJ£7oqaoo IIb moa'i h9J-o/?T9 -elnxxnbe ei£ ssx^* sari&oil eesriT .si'^Je etH r:i e89rxsi;u 9on9hiv9 on hciit sv bns ^&i£ia lo x'^sistode erii vcf I)9'r9d' .iisrtaJ'elniint.e IIsw ;ton 91b ^grld" *Bii;J- eJ-BOXbni oi' to BttolSBulBV I)9ae9a8£ 9Xid- 2;riJ:i)'isaoi eio&t sriT T:9i)nx; 9ib xloixlw ^salitlliu ollduq lo aeesslo dnois'iliJb etif -J-iinnoo noit.f^sil^ups o^sJa 9x1^ lo noliJ'OxLsiiut I««isiio s'^* i)eiTi9e9iq eiB ^d-neflieegsaB lo btCBoa' 9;tsd'8 s bb ^oiJ'd'le ssJ :9lcfBC)- gxilwollo^ arid' nx .IX ait£AT l)9sxlx:jjp>:- iBUip A . l)9s.tX £jjpL iBUioA besx-Ts xrpE: I. exj J oA eee.vec 065, eds OTV.VdV £Sd,V88 087,788 1^89,016 S££,Vd? Ci'£,ede,tt eix,e6e,i2 £8^,6f^i^.ei 800,207,81 V7e.JvI6;S£d.07C.e dO£.aad,^'£ Se6,d^S,£S oss.iis.ei^ 578, 817, £^ y-'. ^^27,751. CGI V70,sse,a£i I££,8£e,7£I ese.sa5,8£x e7x,ca£,e£x d^d,cC-^,73S £Ge,cxa,sf'£ 7£S,7eX,S^£ e£G,7xe,i^£ 0£S,S'-c,ui'£ oxex sxei ^xex exex 8xex 5J ^X.8 7 e.XS :c7c.a5X.c£X:£dc.Xad.7S£: IS (^ X 000 000 ,6S6,dX) .oD t£9woq: A irIaJ:J,noxd'osiT bnisoB d-ej}xn^ ,e76,7 ) - QliiBeB xo 'ittO \rd' Laixwpojs 000, G£) i)9TXiJpO£ .00 •i9iv'0*T nod"sriiriasW nioJ-asW e^e,7X) - 9ltise8 lo \c;rxO ^tf i5. 64. A3 a suimaary of public utility assessments this table is incomplete in that it does not include the tele- phone companies nor the electric light and power properties These are assessed by the county assessors. This is a curious and hardly justifiable anomaly, for it is incon- ceivable that the property of a telephone company which extends over several counties can be adequately valued for taxation in piecemeal fashion by several different county assessors. It is equally inconceivable that inter-county or interstate hydroelectric properties could be properly assessed by the county assessors. A fundamental principle of efficient taxation is that large corporate properties should be assessed as units, on the basis of their value as going concerns. Ob- viously it is quite impossible to apply this principle if the assessment is made locally in the different counties by an official who can legally take into account simply the physical property located within his own jurisdiction, and who ordinarily lacks the facilities, time and disposi- tion to make a complete study of the broader elements of the problem. The figures given above show for certain years the actual and the equalized assessed valuations placed .1^3 -slsi- o:ii ebiJlonl ion eooh &i. isdi cil eielqcaooal al sIcfjG^ • ael^rrogoriq i3v/oq bns Jxigll oiii'osls edi 'ion ssinaqmoo snoxiq s 81 sliIT ,aio8S98sfi Vi^nx/oo 9x{;t yd f)9ee9e3£ sis gesrlT -nooni as. ii. zol ,\,lB[aotUi slQ&iliieiJl \lbi&r: bcis eksoituo doidv TcnBqmoo 9noi£q9l9d' b "io \tt3q_cic erli tr.di sld^YJtoo lot bBuL&r -^leiBupobs so nao aeiitiuoo Lbi&vqb iqto abneixa Xtasjoo iiieieJlib leisvss xd noisLae'i IsociQasiq ai aoiiBXJii \i[iucO''XQ&ni iccLi 9ld'£vJt9onooni ^jllsups si. il .eioESSsas XliQciotq sd" fjluoc aoiJieqoiq oxid-09l90iL.Tir{ Qts.is'ioirii 10 .aioaeseaB y^^'^oo srft x^ bssBaaeB 8i nox^BXiB;^ ^n9iol'3:*i9 I0 slqxoninq iGtristasbnut A 8£ bsaaQeee sd x)Ix;ox£e eoiJigqciq ©cfsioqioo ssisl J-srlo -do .5rii9onoo 3x1x03 3,e quIbv liaxfj- *io aiaed ecit nc .aJini; li ©Iqicniiq air:t X^^.<1^ 0* gldxeaoqini 9*x;;p al Jx -^latrcxv a&lJnuco c>-xT9i9'i"iix> edi rri ^IIsocI 9l)jsia ai i^nsme.B9sa6 edi •\ilq0ijte J-nxrooos o-nx sjlisj ^XlassI neo oilw I^xol'ilo hb -^d .noiioiijaxitft nwo eirl aidiivj boisool \itoqoiq Lsoiaxrlq, atii -laoqaib bac smti ,a9x^ilx er eiLi ato&l ijIJti^rfxLio oxiv/ bcis lo ad'ngrctelQ leb&otd asH "10 xbuie a^&Iqaoo £ qzIbih oi noii .maXcoiq axiJ- Bise\: alBiiBo *xol woxle avode ngvxg estirsTt sxfT baoBlq anoiissjlBV hsaaseaB bssllBUpe etii bna IsutoB esii 65. t A . . .. .JL on the steam railroads, the electric railways, and the telegraph companies. These assessments were made "by the state tax commission to 1916 and thereafter by the state hoard of equalization, A marlced increase was made in the actual assessed value of operating property in 1912, but this aggregate has declined since that time, although the equalized assessed value has slowly risen on account ^ of the changes in the ratios at which other property is alleged to have been assessed in the different counties. This use of the ratios alone gives a very great importance to their accuracy, and we shall present later our reasons for questioning their reliability. On the face of these valuations it appears that the state assessment of railroads in recent years has become rather a formal matter. The total equalized assess- ment of property other than steaj/i railroads in the state has risen from .$869,564,174 in 1912 to §1,041,973,864 in 1921,- an increase of 19,7^, but during this period there has been only about half a million dollars added to the equalized valuation of the railroad property, or less than one-half of one per cent. The method of railroad assessment employed by the state board of equalization in recent years has been .3d edi bcis .e^bwIIsi oiid-o&Is siiJ- ,Bbsoill&i as&ta sdt no Tjcf ef)flEi 9tC8W a;tnsxaee9eae ossxiT .asictBqmco riq^iaols^f 9£l;t ^^cf i9j"^£9*i9rld' bcis dlQl ot noiceiinmoo xjs* sd-jssje eiid' ,SXGI ni ^i*ieqoicr anidBiaqo "io sriBv fceaaaaafi I^wJoe sxi* ni rfeuorlvtis .srnlt c}-£xi:t sonie bQntloeh esri sd-BSStssis siiid- jwcf iauoooB nc nosii ■^Iwolc acrl qsjLbv bseGBBSB basiLsispa erii ei ■v^i'isqoio lexi^o rioirlw *e aoJ:d"6i &dt al asgnBiio srii- lo ,eoiiinsjoo ^nBtet'ikb edt at Xjeaasaas nssd evjsxf oi Jjsselle eonfi;f:coo;rci iBQi^ x,'r^v b eavig snols eolct^si sxi* lo sej^r eiriT ertoass'x iwo lad-Bl Jnsasiq Ilisria 9W bns ^-^ositu-jos riedf ci ,vSlLid£iil3i tisrij gninoi^tesup 'lOi c^J8r[c)■ eiJSSqqB &i. anox:t.«?trljEv sasriJ- 'to eo^l arf;^ nO aarl aijeo^ iriBooi nx ai>£0'ilxx3i lo d^neraeaeeajs st&ie eii& • aeaaaxs fjosilBupo l£c)-oi srlT .aod-^Bxri JDsraiol £? loiid-Bi saioosd e&B&e 9di at abBoiIxjsT: ntsed-a naiii tQd&o \;di9qoiq Ic itissa at *65,£T0.I^0,Iii; o^ SICI nx ^VI.l^ae.GdSi; moil nsaxi aarf siedt botioq airiJ gnxiyi) J-jjcT ,^'*,V,©I lo 9eB9ioni ru: -,Ii?CX 9xfd- Oc bsiiliB ai£i II oi) nolllim b tlsd J-i/ocfB Y-Cnc nsecT and nBrid' ac9l 10 , •'^d'roqoiq bBOiltsi ed& lo notiBVlGV i)9sxlBJjp9 ,;tn9o i9q 9no lo 'il£rf-9no ^cf h9\;oIqEi9 inemaeesBG bsoiltBi lo bcdism 9XJ[T n99d aaxi etGOx taooBn ni noxdssllBi/ps "io biBOd stBis &di 66. in part responsible for this situation. The otvious inference to be dravm from these figures, taking into account the fact that the aggregate valuation of all other property has increased by aLnost 20^ since 1912, while the total railroad assessment has been stationary, is that there has apparently been a trans- fer to property in general of a part of the tax load which should have been borne by railroad property. The ratio of total taxes borne by railroad property, as shown in Tavle V on page 28 above, also indicates a gradual dimin- ution of relative tax burden since 1914, This apparent shifting of taxes from the rail- roads to other property is neutralized in some degree at least by the differences between the actual basis of as- sessment for railroad and other property. This whole mat- ter is shrouded in mystery, so that in reality no one in the state has any adequate, accurate knowledge of the re- lative tax burden now being borne by the railroads and by other classes of property. The testimony from both sides is of such a partisan nature as to render it worthless in passing upon the merits of the issue, and the problem can never be satisfactorily solved until the control of both the railroad and the other property assessments are put under the control of a competent, impartial state tax .03 ,noiJ£i-\+i:s sixfo io1 sid'larfoqesi iisq ni eesAi aoit nvmih acf oi sons'xs'ini ei;oivcfo exiT e^^ss'^SSJS 9X1;}' ^sx£J- :tcB'i oriJ- d-xiuoaoB o:^^x snxis^t .asixjBil: J-eoxri-Ci? vjcf i)9S£otoni asri y^'^^QOIq loxii-o Lis "io ncx^.^tfljsv e£Xi cTnscieeoaEr, bs^oilzsi l&ioi ads sixiiw .SiCi aonxs iVOS • enettJ' J3 noscf •^ISrtet^iqs efixi siorf.^ ctBi!* ei ^x,iaaoii£is nsocf rioirlw bBoI xr.i^ oiii tc iiBff b 1o leisns;^ nx Y^ioqoiq o;^ is"! o.tlBT orix .\;d"r9croi0 ixBOiIx.p!*! \:a' snaoo nsscf sviirl hluoria ni fcwoxia eb ,^d-i9qoiq i)£07lxBi -v^d sn-xocf bsxsJ- iB'ioi lo -nXiExij lBi;.bjGn3 & aeiBOibni oals .svoci's 8S s^sq no V sIvi^T -lisi. Qvli tnoil BSXBi lo ^niiliila iaeiBqo^a eixiT o£ 001-^eh snoa nx i)9SiXi'ii't;9ii px ■v^jiaqoig nexi^fo o* ahsoT -as lo ciacd iP^isioB sxfJ- nst;v;s,'Oj i-.&oiiot&'ili.b edi -^d i^iSzsl -ujsm 9lor{w axifl ,A^*i9qoiq lexIJ-o Lna bsoiLisi lol cfnsnraeee ni eno on Y^-t-t'SQ^ ^--t ^■cxl^ oa ,vi9cfc^ini nx bebuade aj: leJ- -91 sxid" lo 93i)9lwon2f s;tJsii;o ,»:> ,9w^ji;p9X)x; "'Cn£ aixl sJ^sJ-a srlcf \d bxiG QbBoiIxf.i srli" ■^cf enioc gnxscT won n9i)ax;c/ :::x5^ 9vx;tjc.C 8Si)xa rid-od moi'i \;noiuiJ8sJ- 9iiT tXiieqaq to egaaslo lexTd-o fix aagXxiJ-'iov; ii isLnai oi' sa ei-uisn Ci£eiii.Hc_ b doua to zi. rtso fli9lcfo'iq 9rIo Lob .guasx 9x1^ lo ad-iasci odi noqu gnxaesq xlc^ocf lo lon-noo ^di liimj bevlo& ^l£iotos'iati£s gd" isvgn iuq ar.B acnsfflaasaoB v^-isqcnq loxid'o axiJ fciu. b£OiIJ:ei '^d& XBi' eJiiie l&iiisiqal ^SiL^ieqmoo s 1c loiJnoo odi 'isbnu 67. cocsnission. A comparison of th.e railroad asseBrrncntB in greater detail reveals the further fact that the tax bur- den on these properties has not been equitably distributed among the different roads themselves. This is shown by the v/ide ve.riation in the actual value per mile of main line for the different roads, as determined by the state board of equalization. We present below these actual values per mile for 1912, 1916, ajid 1921: TABLE XII . ACTUAL VALUATIOIIS PER MILE O'^ MAIN LIMES OF RAILROADS . 1912 1916 1921 C.M.& St. P. § 84,185 ^')'7,799 $ 73,806 Gt.j^Torthern 96,159 88,266 88,432 U.P. 84,050 81,745 81,682 O.W. 72,086 84,272 83,565 Spokane, P. & S. 106,043 95,911 89,784 In 1912 these actual values per mile ranged from #72,086 for the main line of the Oregon-Washington, to §106,043 for the Spokane, Por'ti&fid' and Seattle. During the intervening years to 1921 there has been a tendency tov/ard a more equal valuation, but in 1921 these values ap- pear to be unnecessarily diverse. V/e do not mean to attach undue importance to this test, but it does appear to us that for the principal railroads of the state, with substantially .V5 • noisalinaoo ill aJTion';-;92 2,^ bJ^oili.S'i siLf 1o noeJcieqnoo A -iircf rcoi- arl* JsriJ- J-qjs^ -lajrld-ij/i ^a'c^ al33V9i Xiisj-Ql) i9d-^3X^ boJi/dlid-aib ^Idsi'lups need ^on a.ari aei^isqoiq sssiiJ" no neb \^rf nworf-^ 3i aixlT .aavlesniarid' ai)eoa J-neiafiiiJ -oxij- gnonp;-. aJ-^J-a 9xIJ" "ccf b9niiTied-3i) ais ,ai)fioti ^nsialxxi) sriJ- 10*5: 9niiL l£uto:'. 980x1* wolad" ^naasiq eV/ ,«oiis5llJ3ijp9 lo b-xsocf :1S,'^1 b:ui ,dX2I ,2161 i-o"i oliio. loq ssjjIjdv . IIX :£JS AT • aCAOHJlAH "^O aSKIJ PIIAM T IP S JIII flS^ 3K0ITAUJAV JAUTOA xsei diei 2i§i«_ 608, SV $ ^S^.IT'^ 5617^51^ .q,J-8 li.M.O 2£f^,88 592,38 9a.L,de niSiicf'SoT'I.cJ-O S8d,I8 a^?,I8 050,^8 ,1,'A dbd,?:8 2?2,1^8 SSO,SV .W.O tSV.eS Iie,ae 5i^0,d0I .3 cS.l.ana-io^iS ao'il basrijai sllai asq esul^v Ijsjjjos oasxlJ- 2IGI nl oJ- ,iioJ3nJ:rf3.5V;-no§s'iO erL:}- lo sail nxBin arii- lol d80,SV^ SnxiJjCI .9li-jS98 i)nB r-oslcf-xog: ,9aQ>ioq3 srlj- -xol 5i^0,d0I$ \;on9ijn9:t s nescf asri sicxld- I2SI oi a'i&sx anlnavigJ-ax 9i£j -qs asulsv 939rid- £261 nx ti-a , :io ti-auisv Lp.upa siota 3 bt&xfoi dosiiz oi n&9ai J^ori oi^ a.. .oaiovlb xLiiiiyaa^osmoj ed o-t i-:9q d'fixld' au-o^^ issqqs asob jx ^i;cf ..tsgi" sirli" oJ- aooBiioqai oijbau XJ^L&licu^iadua dii^ ,3^,3ie sdi lo sbfioilioi Isqxofixnq 9ri;t lol 68. similar conditions of construction and operation, and with fairly equal terminal facilities in the leading cities of the state, that the actual values per mile should "be reasonably close together for the different roads. It has been urged in partial extenuation for the leniency displayed toward the railroads that they have faced a steadily increasing competition in both pass- enger and freight business from the privately owned auto- mobiles and motor truck lines which operate over the high- ways. This is a serious situation, if true. The amaz- ing growth of the automobile industry, and the very rapid diffusion of this means of transportation among the peo- ple has undoubtedly meant heavy inroads into the local passenger business of the railways. In recent years the growth of motor bus transportation has cut still further into the railways' local passenger business. A similar development of motor truck transportation threatens the local freight business of the railroads. To the extent tha-t these recent transportation developments have actually reduced the earnings of the steam railroads, and thus les- sened the value of their property, due account should be taken of them in determining the taxable value of these properties. Sut if the growth of motor vehicles and motor .86 i>ni5 ,nol:tj3i9qo bn^ aotiouiisnoo to aaoiJ^ibnoo lelimie asxiio -^nibsiel and- ni asiJ'JcIioB'i XsnJtraiSj laupu x^tisl dilw ,Bl)eoi ^fnaioliX.b acLi lot 'I^Iic^9aoJ■ ^tolo T£lcrj3noai59i -aasq .oltocf /li nox^Xooqiaoo gnxa^eiorxx x^ihssia s boo.o't ov.gxi -oiua bQcmo ^loisviiq^ ddi moil aasiixaucf Maisi'i orts losno -r£sxx"f. qxIj- 19V0 oj-oiaqo xloxriv/ aanxl ?{ojjiJ" 'loiou i>nB 39lxdoiii • a'^xjv; -sscis 9xiT ,91/11 Ix ,iioisciJits ai/oiisa a ai aixfT -oaq arfJ- gnone noxJ^-tioqaiteid' lo ancsra atsii 1o aotsullib l&ool arid' oictt abjsoinx ^^vxiSii J-noSfli ^c^beidtuobnsj ssd elq ddi aiso^i j-nsooi nl .a^-swIiBT: grid- "io ?ii9ai3;rcf le^ndsrasq i9rl;fax;'t IIxd"3 Jxro aj3Xl noid'.aJ-ioqartB'il ai/o Toc^ou "io rfd"y/ois tcxiXifixxa A .aaoniaxra is^naaasq Xsool ♦3^iJ3v/Iis1 srIJ- oJ-ni 9xlo 3n9«ta9xrit noxd'.Ooioqan.yit jlou'it toj-oiii lo JrisniqoIOTa.ra J'n9d'::o arid' oT .abi=^. oilx.ii axiJ ::c aesnxsi/a d-rf-^lgil leool ■^IL&ijioB evGd aiasiacioloveb noLisiioqsnati ^aoosi eassii isdJ' -aal eudt basi ,si>«oiIxai iossd-a siid" lo aanxni^g edi beouboi od bluod.e jciuooob sub .i^-tiaqoiq tled^t lo 9x/Ij3v sdi bacioa osodi lo 9;;Is'r glcfsxsd' ©rid' anininnad-ob nl m9r£d' lo ae^si' loioa bnij aaloxriav lod-ooa lo dd-woia 9xfd" Ix iud .aaxd-xoqoiq 69. transportation has attained this significance in the sta,te, it is clear that we have here a source of revenue the.t under existing tax la-VTB is not receiving the attention that it should receive. We shall defer to a later section of the report the more complete discussion of the taxation of motor vehicles, but it is clear that the loss in taxes due to the failure of the railroad assessments to advance must be borne elsewhere. The methods used in the railroad assessment have been shown to be of questionable efficiency. To the degree, however, in v/hich the above considerations have weight, it is also perfectly evident that this loss in tax revenue from the railroads should be counterbalanced by larger revenues from the agencies which have been re- sponsible for this decline. 5. Electric Railways ; The tax law relating to electric railv/ays is also anomalous, in that the state assessment is confined to the operating property used for transportation purposes, v,'hile all properties used for light and pov/er purposes are in the jurisdiction of the county assessors. This rule necessitates in some cases a purely arbitrary division of the property, and is a violation of the fundamental prin- ciple of the unit rule of assessment. .ed i&bnu i.^t 9i;nsT3i to oo^ttroa 3 aisrl svari 9w d^jsrlj- ijislo si li d-Jt J-^xlit aold'nald-fi edt saivi909i .ton ai aw.el xb* gni^aijcs 9xid- lo noxJo93 io^rI 3 o:t iol9f3 il-sxfe 9T/ ,9vi909i biuoda loJod lo noiJjsxs* 9rIJ- "io noiaex/osil:) e^slqiaoo 9101a sdi d-xoqsi eild- oi etjb eexr>i nx asol sxid- tsdi iB9lo ex di J'uc/ .agloirisv sniotf 'dci' v3i;a sonrjvbjs oi aJ'n9ai3 3 9ar'.B baoilisi 9riJ lo atisit.p.l ^n9ni239saa ixsoilisi sfi^ ni beau abodierct. sxfT .9i9riv/33l9 9iW oT .T^onexoxltg aldsnoiJ'QSJjp lo scf oi- nwoiis noacf avBii oybtI anoxd-jsiabisnoo 9vociJ3 orid- rfoxilw ni ,ifire\7od .aaigaJb ni: aaoX ax;i;^ iasLi tnabtra ■^Id'os't-xsq oalB ai -^.l ^id^tovr boocisLsdiiciiiiuoo ed bLuoda absotltst edi molt syn^vai xai -91 n99'J 9rr.fl rioirfv? a9ion9-5i3 9r£,f noil: a9an9T5i i9:gii;I v-i ,9nJtIo9b aia'J- lol alu'xanoqa ; 8 Y-Q wX JBfi ii j- o 9 IS .3 ax QX-GwIXBi oii3-09l9 o;t snx.l->?;l9i wqI y:st 9rfT oc)' ijsnxlnoo ax tngaaasaa^s eiaia eidi isdi ax. , 3;jcIsLiortj3 osIb .aaaoqiwtl nox^fj-jd-ioqexisa-t lol bsau ^i'lsqo'iq, anxJiJioqo 9rf^ 913 agaoqitrq i9\voq bna drl^il 'xox baau aaxjigcjoiq IIb glirfw 9lirx airiT .aioaaoaas •'^^rn/oa sxf* I0 rtoxtoxbaxiUQ edi^ nx lo noxairxi) ^iBi;txd"ifi ^l9ixrq a 392BO 9inos rti aelaJ-xoagoan -aiiq liionsfiisijnu'i 9xld' lo xiox^tslolv 3 ax i)n£ .^.jd'isqoiq 9x1^' .^TiQaaagaaB lo slui itau edi to elqxo 70. the peak valuations, "both actual and equalized, of the electric railv/ays, v;ere reached in 1914. The great drop in these figures in 1921 was due to the acquisition of the properties of the Puget Sound Tra-ction, Light & Power Company and the Western YiTashington Power Company by the city of Seattle, and the consequent withdrawal of these proper- ties from the ta^ rolls, \7e have no desire at tMs point to enter into a discussion of the subject of municipal ownership of public utilities, or of the general policy of the extension of the commercial activities of our cities, but we cannot refrain from reference to the significance of this policy from the standpoint of the tax rolls and the tax rate. For example, the acquisition by the city of Seattle of the street railway properties above referred to has meant the withdrawal of $7,675,000 from the local tax duplicate. The taxes formerly paid on this valuation have been shifted to the other property, including real estate. The very least that can be urged upon these coirmunities which desire to embark upon such experiments, ie that these com - mercial undertakings be operated along such lines and in accordance with such principles of policy as to make them self-sustaining and not a burden to the remainder of the property of the community by the levy of taxes to cover deficits , .ov noiJjiaiiJpo.n oriJ- oi osjb a^^v laSX ni ^eiir^tJ eaMi ai qoi/j -isqo-i'.i saoricf "io i.-iW-s-iijUvtiw ^nawposrioc arii /)ae ,9lc}-J-i338 1o i'nloq ahit ia s-iissb on avsri sW .alloi xs* sxid" moat aolc!- Xeqloirti/rj lo teoi,dija 9rf.t lo noiaauosih a o;tat locfno oJ" la ^ioilo.i liJisii^jj jii^ iO to ,.^3iJ-iIi:!-u ^llcfjjq "io qlda'xemvo ,3aid-io 1JJ0 "lo aali-iviJOvO Isioismio::^ srfJ' lo noxansJ-xs sxfJ- aonjeotlxnaxa sxiJ- oJ" aonsis'isi moil nt^i'isi ionnso 9w ctjjcf 9ii* bns alloi xb;? srLt lo In.tocxbnLGJ-a orfJ- j:^^! ■^ioiloq aiifJ- lo lo Tcd^io 9ii+ Y*^' aoiiliaLisgoB '5di ,9lq£asxs lo'S ,9J-fii xBt oJ- x)9'3:-t 91:91 9vodJ5 gaid'-xsqciq i^swXxai ;f99iJ'a axiJ- "io ali-J-figS 203 J' LnooL -ariu nroil: O0O,eVf),?'A 'io Inv/iSiliXi^J-Jtw 9x1 J- *ns9fa asri 9V3ii rtox*^':jJlsv dixict no filsq Y-Cisntio'i aaicfjJ' srfT .gi'soiXquo «9>ts'io'X.'i lo inuo-jn IlBiae v^leri&3l ■y;iiaqonc{ ari^J lol XB;t s^i^taiBe its eJ-uJ-xcfaa'xfa oJ- oaiw 3cf aas'xqxa sdi lo saao axic ni ^noi) naao ^cI)S^•IIJ8 aaxi ea ,xbJ' .aainjsqnoo 1^0 brto : eaoi:^:si og ioO aw»i 3vxiq . ? Ib91 aJ-x no bsx^i al noxJT.ioqioo ad'.svliq erCT ,io3393ajs ^id'ni/oo 9iict -^icf baasaasB 3.6 x*i9qotCT lenoaisa I)ns ,3i9nwo ^J-xsqoiq Iei/bl7ibnx 91b 3£ loaa-^a srrLca arW- nx -lib boJ'J39nJ' 3X «oiij3ioqioo edi rioxuv/ crs j-aioq 'Clno sriT sxT* bos noxtfl'ioqTooni 10I bsaaBrio 3991 oric^ nt at ,vl;ra9i9l ■^a3:il3ud ^nioj.) Ic asalivxiq exi+ 10I baxval a9:::BJ' sansoil ,etsi*e yfiJ- nx 72. In most cases this pa-rity of treatment in taxa- tion is wise and sound. Many of the incorporated con- cerns in this state possess only a small capital, and they meet the competition of individuals and partnerships in most lines of business activity. The license tax is not a discrimination against the corporation "but only a very moderate charge for the privilege of limited liability and other advantages which accrue in conducting a business under the corporate form. There is a limited number of concerns, however, for v/hich the property tax as it is understood in Washington, is hardly an adequate system of taxation. We refer to those corporations which, by reason of their possession of valuable natural resources, or of superior advantages in production based on location, patents, etc., are earn- ing a return in excess of the normal return on capital under competitive conditions. The tangible assets of such concerns, including their real estate, plant and in- ventory, are a very inadequate basis for their taxation. There is a surplus of ability to pay taxes here which is not reflected in the assessed valuation of the physical property, and the policy of exempting their stocks and bonds to the ormers merely emphasizes this disparity. .s? -b:;ca;)' ax taomtseit to "^itii.^q stdi aaajso ieosi nl -noo I)9;ti3-xoq'xoonl eiii lo y^-Q^-^ .bmsoa brts aaiw si noij" biiB ,IfictiqBo Ilsaa e ^^Ino aaaaaoq 9;ts^3 aixiJ- ni aniso a^iriaisnJisq Lab alsi/Jblviijxil to noi^tii-samoo 9iit J-sem ^sriJ" ai XB* senooll siiT ."^i'lviiae aasnxaucf "io asnll d-eoa ni (5 vino iu6 noxJ'xj'roq'ioo ^xl;^ ocni^sii noiJ'srrimi'ioaxI) ^3 J- on ^.tJiIioail 'o3ii:atL to saaliyiiq sxfJ lol aaisxio a^tsioiioni '^nsv assaxaiicf a artx^oi/ijnoo ni sutoos rfoxxfw 893J3;fnjsvLj3 tail^o bni5 .i-atcol a^jsioqioo ^rii tobnu ,i3V9wo/l .anngonoo lo ladmun 'oQ^imil b ai eieriT ,aod-3nlri3fiV/ nx booJ'a'igbrijj si il as xsJ ^i'locjotq 9xi^ xlolriw io"* oJ" la'isi eW .nox^sxBt "io ^l9d•3^c^ 9o"sijfj9lji3 as \,lbtsri p.'l noxa39C3oq ixsrit to noaagi -i^a .lioiriw enoxcfj2'Xoqioo saorii aags^naT-bja ioJti9qxfa ^o 10 ,890ixro39T LsituiBn 9ld^uLs7 "io -niB9 sTS ..od-a ,a^n9J-.sq .aoxj-eool no beaad notioubotq nt LBilqao cto niuisi I-s.nion adi to aaeoy.e :ii aisjis'i s 3ni lo aJgaas aldt^ast sxiT .snoxJ'xijnoc; gviJlcfgaaioo 'tabnu -ni i)n3 i-nalq ,9d'fi*39 Ib9i ixaxIJ- aaiiuloni ,an'i9onoo xiox/a .noiJax!:^* ixsxld- lol aiascf aj-supsij^nx ^lev i5 91/3 ,ii'to^ri9Y ai iioxxiw ot^d a9XB* ic-sq od" x,^tLids lo axxlqixra b ai oiailT laoxaYriq 9r£J lo ^oic^3uIBV beoasaas adi ai b3io3lt&x ton. haa 3:100*3 •ixsrfcJ' 3niJ'qin9X9 lo '^oiloq sdi bns , 'y^i-xaqciq .^tiiiBqaii) axxfcJ- a9sxaailq(u9 • '^oijjos slcflaaoi ain:.t ,noi*sxBd" srict- anibnovtxs 'ccf i)9rioiiei aJ "^ilifj^si neo j-I .jbeiooliovo nailw 33 90-^9 ad-Bioq-JOo axfJ- ^avoo od" xa^ aairiorLGil Isirnne 9:fj3ioqioo no xcd" an^niai/ci' s lo aoss^Si ijcf •s.o ,8d'3XX9 sirfj- f)9noiJ"ii)aoo 9cf bLaoxf x-^^^^^ia sisLt to 98U .ginooni ^90 .noXvUJ"! Janoo sxld" ocf i'ngabnsniB ns noqjj ; 3:{nag ,8 j"O9{,cf03 ax sd'fiJ'a v;nB X'^ a:>£aBo' lo noitsxsJ' srfT -bot odi T^cf bgaoq.TtJ: nead ovad xloixlw 3noiJ"£cMmiI ni.sd"x9o od" ,a;ixiGd lBnoxd"sn lo ncid-BxaJ- axld noqij Jnaoiniavog lais riJ^iw 9onsJbioona ni ^qaoxs a^Tneci' l£noxd"Bn r^d' ^^sm e^Bd-a 0" on bns ,339i3noO ^^a' mvoh hioL 8noxcJ'xi)noo lJ3ion92 9iiJ- gnii'ostcfua ^^cf astnsd nwo eii JeiniBa^ sdijnxaixioaii) IXxw aiaia LsciotiBa 9di no i;9aoqcii sis nexi;^ adxad" isriaixl oi raexiJ- .axnei -as Ow ax aoiisixsi jixiscf lo i)oili9i'a no^Bi^-t^e-s^ s^T ,'^9noia nx sjjIbv "xIeI bna LZut lisdi is aaisria jlosd lis sag a ,nox*.si;Ijsv 3xn;t 10 .;Ow d^s noxi'w^Lsi' tol :iood3 liaxid" dail o-' bne 74. first deducting therefrom the assessed value of the real estate "belonging to the bank. The practice for years has been to take the book value of the bank's shares as the "full and fair value" of these shares. This is a valuation which can be actually determined frora the bank statements, so that if this rule is consistently and gen- erally followed bank stocks are the best-assessed class of property in the state. The problem of bank taxation in its relation to the treatment of other classes of intangibles, such as stocks and bonds, mortgages and credits, has been given a turn by recent federal Supreme Court decisions of which the governor and the legislature should be made aware. The states have proceeded on the assumption that they were complying with the federal statute (U.S. P.ev. St., Sec. 5219) if they provided for the taxation of national and state banks and loan and trust companies on the same basis. But in June, 1921, the United States Supreme Court held that in providing for a low flat tax on intangibles in the hands of individuals, the State of Virginia was actually discriminating against national bank stock in favor of this "other moneyed capital" in the hands of individuals. .^v aa aaiade s'sfnisd siiJ' to aulsv >foocf ocii Q-yLssi oJ" naecf afixf 3 3i alriT .?3'iBria aaodi Ic "sx/Isv •xi.'sl Jbns Hut'' ovii -nss iJHiJ •^I^asi'aianoo si oIjji aixiit li :J'j--xf;t oa , atnetasj-Bj-a aasls &93S9aas-d'C3d' siiJ- sis 3:foo*a :A.n3d baftoLLo'l >jIIj313 ,;3?Bla eAi «x T^J-rsqoii lo Ov noijfil9i aJ'Jfc nx noiJr^xs^ jlnso 1o naldotq arlT as rfoaa ,aoIa'xsrifid"nJ: 'lo asasalo itrfio "io j-nsraJ/ssiJ- sriJ nsvxa asocf acji ,siibG'x.o bn.3 asaB3d"io;it ,abncd bns a~Aoofe rioiriw lo anoxaxoab .t'lxroO aiaoiqwa I/^ioijat J-n^oei \;^ n-suJ s .91BWB 9bBni 3cf bluoiia 9iud-j3lax39l eiiJ- bn^ lonisvoa srfJ- 919T7 v9xict d-.3xiJ' aoxd^rmi/as.^ sxivt no bsb-aaooiq avBd a9j-/3J"a sriT (9133 .osS ..d-a ,VD?! .8,U) otij:^&t3 lij'xsbs't 9x{cf riJ-iw anx^Xqnoo ai&ia bns Isnox*Bn lo noxi'sxsd' orit lol bgbivoiq T^erfJ- "iJt ♦ aiaacf 9:.iBa ed^ no aginaqiaoo tautj bajs n.80l bna aifnscf bl9x£ iiuo'J girca-xquo agu^J-S bsjinU edi ,IS6I ,9r!uL ni c^JJS. 9fid- nx 39luxsfU3d-fix no xsi" ^eXI wol b lol gnJtbxvoiq al t&di ^LlBtsios aaw jainigiiV to SoSd'C erit .al^xrbxvxbni to alinr.rf RXdJ' to novst ni :^ooie. :^Qd iBnoxJ-Bn J'enxB3*j sniJanxmiioalii .alBJjbtvJtbni to abneri siiJ- nl "iB^xqjso b9Y9noiii 'xaxf^o" 75. (Merchants national Bank vs. City of Richmond). This decision endangers the classified property taxes in a number of states, and in ilev^ York, where intangibles have been exempted since the enactment of the personal income tax law of 1919, the national banks have brought suit for the recovery of some $12,000,000 of taxes paid on bank stocks in the last two years. Thus far, of course, nothing has happened in Washington to disturb the established situation, and an amendment is pending before the Congressional Committee on Banking and Currency to correct the effects of the Richmond decision. In the meantime, it is quite possible that this decision would afford a basis for a contention on the part of the national banks of this state that the com- plete exemption by this state of all intangibles in the hands of individuals was an unwarranted discrimination against their stocks. The situation contains sufficient- ly serious possibilities to warrant our recomnendation to the governor and the legislature that steps be taken to urge upon the state's members of both houses of Congress that favorable action be taken upon the proposed amendment to Section 5219 of the Federal Statutes. .av axxfT , {bnamiiolE lo vdtO ,av iasa lJ3nox;^jb-:I s^osiIdisM) £ ni asx&i ^:J■':^qo1q Lai'iiaej^.Io erfJ aisaiXBijns noiaioob 9vsri 8aIcfl3nEJ"ni aisrivr ^litoY W9;. nx ijo^a ,a9J^::;t3 lo •I3ci:2x;n soioonJt Xaaoaisg &rW' "io tnamJ'oafie sd:)- oonxa aotgrnexs need lo'i ^lua irfauoitf avsxl aDinsd' Isnox;fj3n sri:t ,^ISI "io wal xai aiooJ-a :i£asci no hi&q z^y.si Io 000,OQO,SI;> snoa Io '^lavooai odi .anssY ow^ iasl 9r£:f ni ni I)9n9qqBrf asii gnirid-on ,9aiiJoo Io .i.-s^ et/rlT OS bn.'s .noxJ-^ulJta ijoriaildsJ-ag sriJ cfiijJ-sxb o* rto^a'urisBW esj^-xxaioO Ianox3e9ignoO 9iid" 9:s:ol9rf anxjansq ai taaisIynQmB 9iij Io a;foo'i'i9 9ri;t jooi-xoo oj \;Drt9injjO dob gnJcjInBa: no alJxesoq aitijp ai ^i ,9i!iidTL39ni axfJ «I .noiaxosb nnonirioifl no noxJ-ngJ-noo b io'x axas.; ^ bioils bLuo^ aotaloeb axrIJ- isiii -laoo gxt;}' J-Bxij' 9;)'£i'3 axrtJ- xo aiinscf Isnoid^an arid' 1:, ttsq B:ii adi nx aaLIooi3 itoi> M^TSYa boa 9ii/J-yjji.ts erfJ- noqu ffianal J"j3 »tIo7,'b ^v^ar{ 9\.' svDlIsd 9V/ s^uBOOcf ni9;fsY- xjsJ' nod"3nJ:riaj3V/ 9fi^ 'to nohisiisqo aioalQb suoiisp. ^c^er nlsiiso bsqolsvsfo asrf xaaJ-e-^a aJtrfd" JsjrfJ' XLlsispB 3d 0} rji nsiiiucf xBt oricf ti bsd'ooiioo so iamx iloiriw 9v iJ-.£ia*3x a.i:i; ti3i3 •^J^ajrio 'aiB sioeteb soariT . ^'j ^ ucf ii J' ex b noiJ'xi'iego s.iJ nx eJ"09x a b ai.G yorit .3X i^:,di .i:?j-oaiaflo ni 939xiJ nx ncdi iBdt&i awal X3:f eiiJ- Jo notici^alt\i!x^& l>n.£ .3-3yl3 3p :9 r{J avA'^I blxjow 9%7 xIotxlTT cfo9"i9^ scj'oiiss ;^nor3 bos tatzl sdT odi 19VQ loionoo I.s'ii.+aao '?^f-;i;i^9b;3 "io >Loal axli' ax 93iamfqm9 8BW otBiB alriT .Y^'xsqoiq; iO noxJ"fislI.sxrpo b«» J'n9ia33oaaB x-sJ- aastli-.nJ-nso "io nol.*Oijbottnt edJ ni 3i99nolq srit lo sno -ns 0081 to noi:a;^i;;inioo xsj 9^3;}-3 c + i oonla ,noi.t^i J 3inxnil).e .oixIO ,asani3ji .sd-oaonniil ni anoxsaxi.iiaoo xiilimls exi* bac^Bba:^ -gJ-^nuJ-iolnU .aa&sia lod&o 3jjoxi^t bns sinnolilBO .noggtO ^Xj'n9i3xl1.0's ieetuo erW d"B n9vx3 &oa esw noisaimnoo airLcf ,^^1 9r[i' ngvo noxaivioqua bris lo'iinoo lo 819^00 9vien9r£9iqinoo aaoji ILi.i'i bn.s j^^'^^'io'ifl ^o noii'osilsupe bas ;tri9;ixaa93ajs -niabf? x.sJ- niaboi:: ni anxr.nisgcf cfngllaoxs 9:Ict- ,-^l9d-i5ni;d"xo^r:;; x^d" 3^3j3 9xid- "io noi-BSio edi nx 9b,3ai aaw rloxrlw ncx.i^ttsi a^w vbocf 3Xil;t aalJj39io WisI 9xicf nsrfw snobnu asw xioiaaxxiirrioo ^9floX8ax::£aoo xeJ- ach^Ja "io soxllo 9£lT »VS.QL nx b9lj39(i9i 77. was created at this time and pres\imably this official was given the supervisory powers formerly exercised by the tax commission, but the appropriation was materially reduced, and the loss in prestige which came with the change effect- ively negatived any real influence which the tax commission had built up. The same supervisory powers are now vested in the director of taxation and examination, but this of- ficial has even less real authority in tax administration than his predecessors enjoyed, 'III' A As a matter of fact, the task of thorough, effi- cient e-nd effective administration of the tax system in the State of Washington, with its immense area and varied interests, is too large to be handled by a single commis- sioner, g.nd our central recomraendation looking toward the reform of the present chaotic condition of assessments is the establishment of a tax commission of three members , to be appointed by the governor for terms of not less than six years and at salaries sufficiently large to attract high grade men to this office. The principal _ basis of ., these appointments should be fitness, as evidenced by the knowledge of taxation and administrative capacity of the appointees . .rv afiw Islol'ilo axxf* xJ^'^'.-arauaaiq htia stati sirid" is bei&oio Vicv ymi odi ^d bsaioisxs vjl'xsm'xo'i aaavroq ^icioaivisqua sril nsvlg ^bBoubai x-^liiltitisia gh'n aoii::..tiq_oiq_q& aiiJ" iud ,ftoiaaj:.ianoo noxaaxini:aoo xa^ ssH rfoi^iw sonayllni Isai x"^ bavii&^ea --ilavi bacfaev v/on aia anairoq x'Xoa-tTisqi/a orosa srlT .qw iLiud bad -"io axxio d"i/j .noiJ^axnisxs bnj3 acx^^xjs^ lo •xo^osixia odi ai nold'-oa^ainxrobB xej ni ^J-xioriJ-i;^ Isai aaal nava af,d iBxoJtl ,i)9iCoi,n9 ano33909boiq oirl nsdJ -i'ile ,rfei;oioa"i' lo staaj- 9rit ,ioii1 1o leiisa b aA ni iii9«3\;a xai 9xl;t to tioli^tieicitiobB 9riioo1'i& btiii iaeto bsiiBV bns soiis sanaccii ail dit\y ,riod"3r:J:rf2j3W lo oisiiQ ^di -aJtinaioo slSxiia a X'^ b3lb:vid ocf o^ 931bI ooi ax .aJagigtnx 9d i .b'xav/oj a^:■t:^iooI noxJ'3l)n9..g40o9i X j31 .t n eo iifo , „i)nB , -x s ri o i a 3i alna xiiaaaeaa 1o noxJxI^noo pxj'oaiio Jnsaais arii to taiolai • s . taa'rr -gni oeirlJ' lo noi ^ axinmoo xeJ /•; lo itierrs i ciildsiaa odi asdi fisal Jon lo snt-ji lot isniovoa -Ji^ zd I)9^nxoqqa ad oJ" ^ J'ojjij-JB oi Qai-Qx YXJ'cigxojfcl'lijs aax'xgX^a Jg bos aiasy xia to axsacf^ Ij sg Jtofl.tiq ; ox t T^ , .ao-ft-o exriJ oJ naai aijB'xa -riaxri 9iiJ Yd I?9on9.DXY9 8.S ,589nd.t1 3d blijcrla e j'nataJ'a.fcocrqB assffj axtJ- lo ^J-logqjBo ovxJ BiJaxrtiabe bti& noiJBxai lo e^Jjalw onal . aaaJnxoc^q fi 78. Such a commission should be given complete super- visory control over the whole tax system. By this we mean that it should have the povrer to compel a proper local as- sessment and equalization of property for taxation, and to this end it should be empowered, when necessary, to order a reasseesment of any or all classes of property in any taxing district, either by the regularly constituted taxing officials or by special assessors chosen for the purpose. With these drastic powers of control should go the usual supervisory pov/ers which are now vested in the tax commis- sion of such states as Wisconsin and Minnesota. In ad- dition, this commission should be given the full powers of equalization and of corporate assessment now exercised by the state equalization committee. The present ex officio board should be abolished. Our subsequent criticisms of the operation of the Y/ashington tax system flow from this central defect in the administrative organization and procedure, First, we have found that there is no adequate means of checking and testing the assessment of property. The state board of equalization has for years prepared a table of ratios of assessed to tiue value, but the methods .8T -laqus sJ-oIqaroo navig stf bL:soda noxeaiuiinoo a ciojj3 OBsa 9w aixi* \ja. .as-sA^s xai' aloxfw adJ- isvo lo'ij'noo ■^loaiv -as Leool laqoiq .s laq^ioo o^ tswoq sxl^ OYisxi ijli/oifa ii ;fsdi i9bto oi ,vis3a909ri aaxi'y ,Jb£)i9Woqiii3 3cf .bluoxia J-1 f>n3 axaJ" oo ^ciB at x^i3q,oiq "to ssaaBlo L1& 10 -9ibnjjii idQis bloi 1Z& bns ^-^iauoo lebnjj bsnlinexo a-xsv/ aaaaoa^xw 97x1-v;Jt{3Xo -qonq lol bi£.q doJtiq Ijgxj^Jos sdi ci ds rfJ'jao 8nib909ig sdi grxxiub abrtB/i gnJtriOQxfo ^cd"i3 abioos'X oixlqiiiaonectS .aii^iiora 9Yl9w;t xioxxiw caoii ,'iirtomict-33J' axjlJ' Io sbein siaxi j>nxfliaonoo ^^isqoiq sri^t saidiiyaob ai'sxl bns Qb&m. 9i9:v «93£Bt e-sw ^"orcLXvtasJ" rloiiiw 9t:9w oxfw taioJxbiJja xitxuoo edi ocf bsbixswiol "io BUlBr baaaoses arlJ ^lixc^ioo oj- l>a'xJ:jjpdtc ■>i>f«jjOO ^id 59sxIj8JLrp9 as noii'qiioeab rlOBa aJail gaoxLi- "io aiisisi edt noqU . abijsocf -id"39* mowa y/J iiwoxla a^ asxrlav leutos srfJ" oi^tBi 9xld- bn.s m&d:.^ rxc b9bnoJ-x9 9T9X7 \:nof!T ■,b9Jx;qcico aavi aguljsv IfiXj;fos o;t bgaegasfl "io (XI-OI .qq .J'loqsH 0X61) ffofcxlw no lBii9 j-jsm 9rl:f ^ntioalloo Io nnlq oxriT I^'i979a lot 9vxJo9l9b 3JBW -i^d-niroo xioss> io1 ot^ei b eascf oi' isaoe&ei btua b9'ievco anoxd'osaaB-xi' Io tedr.ujn odt -^tsitl anoaisq 288 TjIffO .Iljsma oo:f asw bswdiv-igi'ni ano3'i9q Io 80. in the whole state were questioned in 1910 and an examin- ation of the stenographic reports of these hearings showed that some of these witnesses had no definite evidence of actual transactions in real estate. Second,- there has ;£ in t... been a tendency toward a professional witness list. The sane persons appeared year after year. Finally, there v/as inadequate precaution against the inclusion of improper '^ic. Ixa - fir '•: evidence. (See Lutz, "The State Tax Commission*, pp. 356-357) The preparation of the ratios has been given even less attention in recent years. The director of taxation is supposed to require of various officials the compilation of data on the basis of which accurate ratios can be compiled. It would be impossible to secure thor- oughly reliable ratios by such means, even with due dili- gence on the part of these officials, unless there were provided the necessary equipment and technical staff for the purpose. In Wisconsin, where the technique of the preparation of equalization ratios has reached its highest stage, a special statistical staff is employed in the field and office work the year round, aJid every transaction that enters into the calculation is scrutenized and checked with the greatest care as precaution against error. Such .08 -nlBi&XQ ne b:tc CIcI ni LoaoiJ-ssjjp »T9if ^iaia aloriw edi ni. havocla a:QuiiBSd saacii Jo ad'ioqai oldqnt^onsie edi to noiJ-£ lo donabiva dlxnitsia on ixsri aaacantiw aaori^ "io siaoa i'sriJ' asxl aieilJ- -,£>noos3 .3J-£J39 l3::)i r.jfc Qnoijo^seneiJ' IBUJ-Oi; srfT ,i8ll aaoaiitt iBnoiaaa'ioig a i>xswo:t y^oaebnsi b aaod 9i9Xf:t ,\;IXenJt'5; .issy; isi'la iss^ ijaiBsaqs anoaisq Si^uaa leqc'xqrax Io noiaiJlorix srtl J's.iisajs noicJu^Josiq sd-jsupsbfinl aaw .qq ."noxaaiiiioioO xlqT 3^^3*8 sxfT" .sJuJ sq8) .sonsbxva (vas-ass navia nescf ead Boid-.ii srfd" Io noiJ-artaqaiq arIT "io toioQ-iib 9xiT .3:c,'30\j JnansTC ni noJti-noJ-^B aaal nave sdi alBXoi'ilo ai;ox'j:BV Io aixupan o-* heaoqqUB ai noxJarcsl aoU.3i BtBisjooii i-Iax:iw "io aiasi srid" no siab Io iioitnliqiaoo -loriJ' d'xuose oi ala'xaaoqmi do 1>I;j-cw tl ,i)9liqaioo 9U nso -llxJb eub Xiixw navs ,Bni39iu xloua y,u aox-^i 9lcfBll9i i^Ixla/fo 9i9vv oiodi 3'J9lnjj ,al£Xoi"11o 939-^1 Ic J"i£q grid' no gonsg lol "ited-s Isoinrfoad- baji J-nsiuqix/ps ^iBaaooBn sdi b9bi.voir.i edi Io 9x;pxnxIo9d- e:ii eiedv! ,nlEnoosl\7 nl .geoqauq 9ili ;ta9rf3xrf aiz hado&st axsri aotis^i noxi^jssJ:Isjup9 "io noilsisqgiq i)l9xi 9xiJ at i)9^oIqra9 ax HsJ'a IeoxJ'3Xj£,tsi Ijsxoeqe j3 ,936d'R tjsrfj- noi^oaansivt ■\ji9V9 bas ,Jbnuo'i 1^39^ odt iicw 90111 o bns i)9;£o9xln baa ijasxnsJ-xjioa ax noid-^lxrolso artJ- od^nl aioJ-ng xiox;8 .101T9 ,Janx.s3B nol-i/.so9'iq a.o 9:ii3o jsgJ-figig erl^ riJiw 81. a staff costs Wisconsin a few thousand dollars annually, but it accomplishes a very equitatle distribution of the burden of state taxes, and the evidence thus collected is of the greatest service in the supervision which the Wisconsin couniission exercises over the local assessors. Th!e problem of the equalizing ratios is serious in this state, for several reasons. In the first place the tax law sa,ys explicitly that property shall be assessed at 50^ of its true value. It is not possible that all of the assessors should attain this level year after year, but it is of the utmost importance that they be advised and compelled to strive earnestly toward this end. The evidence concerning property values which a v/ell equipped statistical staff would collect under the direction of an intelligent and active tax commission, would be of great value to local assessors in making the original assessment, and would be a strong factor in securing an original assess- ment of all property at the legal basis. Ignorance of relative values and of changing values in different sections in a city or county is one importa,nt reason for inequitable assessments. When v/e undertake to correct such assessments by mea,ns of a worthless ratio, it is the blind leading the blind into the ditch. .18 ^Xll&ur.as atBlLob bcmauodi wsl a nlanooalW ad'aoo llsd'a s nsbiwd edi Jo noiiudiiiiaib eldeilupo '^lev & Qorieilqiioooa ii tj;cf add' lo 81 i)9j-09lIoo awrit sonsblva oiij- ijne ,89XBi' ed'.si'a lo nlsnooaiW srlJ- iloiriw noiaivxaqus edi ni soivTiaa i'aaJsaig .aios?.938a iBool od.i lavo a93io'XQ:c9 noiciaxinfaoo auoirraa ax aoiJ'Ba gnisilBup's axlj' lo raalcfoiq sxfT 90>slq ;f8iJtl sxid" nl .anoaaoi Ixsiavsa 'xol ^s&aia 3tdt at b&aaaecB scf I.r.sria ^Jisqoig ixsriJ ^I^ioilq^rs ai^a wsl x.eJ' orfJ- Us ;tari^ olcfiseoq *on oi ;tl .salsv dXfrtcT ail lo J^OS J-^; ,is9Tc tetis tz3x I9v9l eidi nial^ta f>Ix;ojtia atoaagaaB etii 1o i)9axyJ3B sd t.tqjIj' j-jjii^t ooaBJ-ioqml j-soiiiwU 3di 1o ai J-x d"ucf 9riT ,bae aidi bisyroi ycJ^iesaiBQ avxiJ'a o* hallaqraoo i)nj8 J&aqqiups Haw b xloxifw 39uIbv •^iiaqoiq aaxnisonoo &on9£)XV9 xiB to noxJ-oeixI) ed& lebnu :t09lIoo bli/ow "^^sia X.BOXJ-aiJ'Bj-s JB913 "io 9cf bli/ow ,ncxaex;:ai:oo xbJ- aviJ-OB i>nB *n93ill9;tnt ,.tn9:tiaa933B iBrcxgiio adi arfl::i3:.i ni aioaaseas IbooX oJ aufjsv -83938.3 iBrtJt'^xio HB 3iixii;092 nx aod"OBj: ^noiie b scf blx/ow bna lo 9om--.ion3l .axsBCf Ib39I sriJ el's ijtisqoiq Us lo onan anox.to9a i'ns is 11:11) ni asulsv anxanBiio lo briB asulsv eviisLei. eldB^tupatit lol rxoaBsi JfiBtioqifll sno ax 'Zinuoo io ^d"lo b ni ad"n9r,ic3 93aB doaa ooaiioo od" 3:L3d"i9i)ni; sw nsxfW* .aJTisniaaaaaB sriJ- srtiiJBoI Jbnxicf srfJ' ax Jx .oiJ-Bi aeeldiiow b xo enasm ^d" ,do&ib 9di oinx Jbrixltf 82. The attitude appears to be general, both anong officials and taxpayers, that the ratio is the important thing, and that equalization by this ratio condones any laxity regarding the legal basis of the assessment. Such an attitude is very demoralizing to efficiency in assess- ments. The attention of taxing officials and citizens should be constantly focussed on the legal basis of valu- ations, and in order to accomplish this there must be greater attention given to the actual 100^ value, for it is a truism that 50,% of true value cannot be determined for assessment purposes until the true lOOf? value has been 'determined. The assessor should be required actually to ascertain and to set down on the assessment rolls the full 100^ valuation of all property. The calculation of the 50^ basis then becomes a simple clerical matter, but its simplicity should not be allowed to obscure its importance. Secondly, the accuracy of the equalizing ratios is of serious import because of their use in determining the basis upon which the state direct taxes are levied. This direct state levy is now so large as to involve the possibility of serious inequalities of tax burden among counties unless the basis of apportionment is ascertained .28 -jjIcv Ig r.ascf X,"^'3l ocif nc I)eseuoo'i ^IcJ'nfd'effoo 9c Llucr's is. iQ'i ,ax;Ijsv -i^COI laui'os sriJ- ocf nsvlg ^oi:c^^t9iJJB leisais £)9ni.TrT£;ter. scT J-oi ii£0 swiev etrLt 1o ^,06 i-^irid- otelwii- a el noocf earl ejjijsv -fOCI Qun' ^ lij-rii, eesccaj-^q dr.sfiiaasaae rto'^ oc^ ^II^jj^OB batiupai od jbiucrfe loeesoE^ 9r£T •Jionintisisfc'* Ilifl 3di eXIoi Jn9meF.8Ga3 orl^ no vcvob iss ot JinB nii>;fi9oa£ 91;^^ Ic nca-J-^IuoIeo &x£T .v^isqoic; Il£ "io doxd-fx/Ifiv ^"001 .eoKBJncqcti 8C^jt sijjoeo'o Oj osttoIIjs ed i-on hluoiis violoiXqiute eoxJ-si gnxsJtlsjjpa exi;^ 'to vojsiucojb orI;f ,\Lbi-ioc>3o ^niriinnciob nx sax; lisiid' 1o 9au£06cf ;t'SoqcjLX s;;cxiS2 1o si • fcsivsj 91j5 saxfii- c^09iifc Qiate 9di rioirfv ncqir eiastf srI* 9iii gvlovni oJ" 3»e e^tsl o~ won ei ^sl fideie cJ-osixx) eixs'T Snorae nscit-cf :c£i to aeiixlBSsphciii sisolias 'to ■'<;*iXxc xaaoq bsnxjp^isoas ex tn9finoxJ"'ioqqiJ "io exeed 9ri:f aaslnx; gsxJTX/oo 83. Tfith th.9 utmost care. Indeed there is every incentiYe for the local assessors and the property ovmers to under- value property, since the reward is the escape of a certain proportion of the state tax. We have no doubt that -titerft is a tendency toward a competitive under-valuation among counties, and we have already indicated our reasons for believing that the ratios do not accurately reflect the true relation of assessed values over the state. Thirdly, these ratios are used to equalize the valuations of steam and electric railroad properties in the different counties. Clearly the distribution of this aggregate valuation is of great importance to the different counties. If the ratio for a given county is in error by only 5^, this county will deprive the others of their fair proportion of these corporation taxes. In view of these and other defects of the process of equalization, we are led to conclude that this duty is too important to be entrusted to a board composed of state officials serving in an ex officio capacity. These offi- cials have their own duties to perform and their on^ oppor- tunity of studying the assessment situation comes in the three weeks period during which they are in session as a state board of equa,lization. The task of equalizing assessments .S8 -tebnis Co aisnwc x^'^^Qloiq oxfJ- b:i£i e^osnsseB Isool axiJ- lo'i »x«.4tt j-Br:d cfOiJoi) on svarl sW .r.;-^! uJ-;:.;f5 c-r'^ lo noiiioqcxq QnoiTLS r;oii'/^>i;l£v-i9f)riir ©vlJ-iisqffioo s b'^&vioi ^otisbnai s si arid- d'osl'isi Y,leis?,isjoo^ i-off oib eoxct^i axlcf isrLt gntvallecf .sJ-^^fe srlcf 1SV0 a&ul&v baeeessB lo noid-Blei si/rrd' arW 9sxli?iip9 od" i398i; 91b 8cxJ".oi sparfcf .vI^'rxrfT nJfc s&JLJ-'isqo'rq- L/;otIx£1" oi-r.-t^oola i-ji'i: r^-iRf+3 "io enox*x;i;Iev Rxx-:* lo noxd'ijcfxi^e xi) sxC* ^IicsIO .egi^nuoo d-n6i9l^l£> arii- dneiolxii) edi oS 9onsd"xoqmi isaris 'io ex noxcf£;;jIj5T sJ-sge'css^lJ lO'XT.g nx ax \iniJoo navxyj f; tro"! oiist et(i 11 tesiicujori ixsiricf xO eaorivto oild^ svxTqgi) lixw xtauoo aidi ,^d Y-tno •\:d' ,B0xnd^ noicfjEsricqioo 939xi* "io nci:J:ioqoiq linl aeoooir orl;t "io ad'os'i-sb ledio bn£ ossrii- "io v;&xv nX Bt \iiJb 3 LtLi ffiiit ebvLonoo cct boL sib qw ,noxd"J3SlIeiipe Io ©isd's "io i)98ocr!LOO b^Bod a oo iisd'su'id'ns 9d ocf Jrtej'ioqjTii ooJ' -11'io ossriT .Yd-iosqBO oloil'io ra ns ni gnxviOB alsxoil'io -■xoqqo ""fcCnc -txgrl^ I'Lif: cirtCi-xsc, cc^ asjcd-x/l) av/c ilorlJ- svb.I bIbIo grid" ni a9mco nciis^tie ir.sv^eeeees 9ti& anixi-^ud's "xo y,is.nsji JD as noxaaoe nx ene v9rii rioJtrfw gniiuh bolt^iq 3>I9S^7 99:cri* acTnscTi&agaas snisilsi/ps "io ^Si-J srCT .noxd-ssxljsxrps 'to b't&od sJ-Bd-e 84, is too difficult and important to te left to any ex officio board, however good its intentions. This v^ork should he ^ytransf erred entirely to the state tax cocimission which we have recoiamended. At the satne time the proposed state tax coimnis- sion's pov^er of equalization should "be broadened so as to perrait of searching inquiry into the work of the local ^.boards of equalization. The county tax burden is now sufficiently high in many cases to give rise to some com- petitive under-valuations in the different taxing districts. The cities and the rural districts have the same incentive to avoid the county taxes that the counties liave to avoid the state tax. While it may be urged that a bad assess- ment cannot be entirely corrected by equalization, yet it is true that an efficient equalization is vastly better than a haphazard one and the power of correction, coupled with the authority of the tax commission to order or to make a new a new assessment places the incentive upon strict compliance with the law rather than upon easy going laxity. In viev/ of the many complications which inevitably arise under any system of assessment on a percentage of full value, we recomi^iend the amendment of the tax laws to require the assessment of all property at full value. Such a .^8 oioiYzo X9 xciB oJ" itQl oc ci iastiioqLii. beta iluoi.J.li.b oo.t al ©cf LIuorfe >Iiow aiiiT .enoi-nsirii: sd-j: i)C03 :tovav/ad ,lji£ocf ew xfoxriv/ noxaslrricioo xsi ois^ie orii oi x^etticiQ boiislstis.'xi -BJtxtffiioo X6:f oiBiB £i9soqoiq srid" sctio strxs srlJ- d"A as OS I)sn6i3BO'iJ su Jbli/or^a noi^i^silBjjps lo aswoq s'ncxa XbooI sifJ- "io i[aow orii oiai xiiupiiii anirroi.'59a "io iii^nso^ oi won si: noLiiJc" :uii viriijoo arIT .nciJ-i-.EilBJjps lo cbt£o6 -moo smos oJ" saiic avig oi' esaso \;risni ni rigixi ^{;Xd■x:9ioi■i'iJJ8 .e^oJtid-aiii) gnixa^t J-nsislliii srf* rii eftoli-^x/I^v-nstou 9vJtd'i;t9Q svxdTiSoni eiiUB3 orli ovxsrl 2:to.t'!:J-eib Ir.iL'i sdi br.s. eoiiio orfT i)xovB ci svjsri aaiJnuoo sad diiri^ saxj5i ^idriijco sxld- biovs od -gaaaajs bad jz J-sfld bsgrtjj scf x^ia ii alxxf;-/ .x«J- eieis odi ii. ii^x ,noii-iiSxI,Ei;p9 •:£/ heoo ■iico ^^^laiidno stf J-onr:£o ineci isiisd \l&eiiv si noxd-esiX^irpo inexoi'ils ns d-^rlJ- siriJ- r-l £)9lqjJG0 ,noxJ^09aioo Ic 'xswoq ©nd bna 9no i)i£;ssxfqexf fi nxixid oi 10 lo'cio oi noisaxiori'ioo xcd trlJ- lo ^^-t'^or'J^Xjr, exfd dii\f ioliiz Koqx' evxiroonx axij- eeofilq ia&riiae&sBc W9n a won j3 giLam ,vd-l>:j3l anxop, v;ee9 rxocxu nsrid- i9xli^eu W£l ©liJ diivi oons.llaiaoQ XluHjxv3ni xfcxxi'jv ancidT.oxIqcico \;nBcr! or/l lo ivsxv nl LLuj. zo Q^r.ir^Qoioq & no JaainsEoeaB lo ci3io\c i^nx; aGi)nw setis 9ii:i;p9i od 3W£l ::£j 'jcii to icior:^hnsmB 9cii bneicitacoez sv/ .gi/Ijsv js rloua ,9jjIbv Ilifit ie \itoa^oic 11b "ic d-nor-easae^ srfd 85. change would be looked upon by many as revolutionary, and its successful adoption would require very careful safe- guards in order to inspire full public confidence. In th.e first place this transition could only be effected under the control and direction of such a tax com- mission as we have recommended. Secondly, it should be accom-panied by adequate statutory safeguards against local extravagance as the result of the e nlarf^ed basis of assessment , This safeguard could be provided by enacting that for the first year of such increased assessments the amounts levied in any district shall not exceed those raised in the previous year by the higher millage rates on the lower assessed values; and for the second year em increase not in excess of 5'/9 over the amount raised in the last year of the old system. After the transition had been effected such restrictions could be repealed, and especially so if, in the meantime, a system of budgetary control had been set up in accordance with the suggestions offered in this report. The system of assessement at full value presents numerous advantages. It is vastly more simple in adminis- tration since there is only one objective upon which the attention of officials and taxpayers is fastened. Secondly, the effect of inequalities of assessment .ee bus:. ,y/tsrioltijLoviyi as -^ricn ^cf noq« bs-AooI. sd ilucw ©gnci-fo .annsbi'cnoo ozLdsjq lltst aixqani o;}^ 'xeMo ax. sMeug sd Y^iiu i;lJJOo noiiioiiEii eirii eo^lq &eilt srt* nl -aioo XGd' B -Koya ^o noiJooiii) bne Icxlnoo sx£J- labttu bsioells ecf hJjjgrfe tl .\:I.bf'009e .fcoI)nsiT!niose'i evarl 9?: sc noJteeini I>;pcl :tertXB 5£ ei^ ifiJJri& lBe x?.o>^.^'g.>l'3....9J:f? .i-'pQi:is \di batanaacooz , J-r.9c:p a988£ _'iQ sx8J?d . bsv.i.r .Ino sxIJ "Ic j'lxjeoi griJ eg. 90f;i;;i.EYBi:^x9 ericf lol: :^B^li gnx^tojans -^cf fcsLlvoiq 9d i>Ii;oo JbiJBi/ss'Jjsa »3lr{T £)9xvsl si'HKo.r^ erid' aineu-iBeassc b3e£>etorii xioxre "io lesv; ie-ril auoivsiq sxiJ nx £i9ex-?i oeorLi bosoxi^ ^oa Ilsria :toJ-rtJ'Eii> xns ni ;a9XjlBv i)98a9as£ nsv^fol sAt no cgJ-ei ssslliic ngxlgirl stii ^d i-s9y ita lo ?.E9o::o ni d-on gsjssrfonx hb ibsaj tnoo98 9rld ic^ L-hb .cieJ3\;a bio srfd xo li^s^ ^'^^S. srli nx JbsexBi ^riJJOiix edi tsvo anoxdoiidB9i rloue iigJosllg nt^sd b&ri notiinnsii siii igilA ,smJ:d-n£9f.'. srid ni ."ix oa \:.[Iei09q39 has. ,£)9lBeq9i sd i)Iuoo eoncbiooo£i nx qu d-9a n99d Jbar,''. lotinoo \;zei3^bsjd lo irtoja-^ie js .i"iGqsi axxld' KX /jsiefio 8noicl"393ayR erli ri^iw edngasiq oulsv ILul i-B da&BXOcesBCB 'lo fi'-sj-a^a 9riT -exfixrnl)^ nJt 9lqaxi oiou xlt3£.v zi il .GS-^.^inBvba j;jJoi£)i:aj-n erli rfoxrfv; iioqu 9viJostdo &no xlao ax eierld gonia nciJ-B'sid ,betie:feBl 3X His-v:Bq:cjsd- bns aljsxox'tlo "ic rxcxd'nejdB d-ngxxiaagsaB lo a9xdxlBWpvnx 'to d-os'i'is erid ,^cIb^oo2ci 86. is diminished, for the change to full value v/ill in itself compel greater precision in appraisal, and the taxpayers, as well as the officials, will "be more alert to the accur- acy of the results. Thirdly, such a change will be of great significance in furthering the efforts of the state to attract outside capital for investment. There can "be no question that the present high nillage rates are an obstacle to the out- side investor, who sees the tax rate as a certainty, while the actual basis on which he as a foreign investor is taxed, is a matter of great uncertainty, Finally, the assessment at full value is the only means by which the state can give assurance to the taxpayers that the present constitutional rule of uniform- ity is being observed and applied. For all of these reasons we recom^iend, as a part of the reconstruction of the state's system of taxation, the introduction and diligent enforcement of the full value basis of assessment of all property subject to taxation. The policy of effectual centralization of tax administration which we are here recommending should be extended and completed by transferring to the tax commission the administration of the inheritance tax and the duty of assessing telephone companies and all other iDUblic utilities. .d8 ,8i3\;BqxeJ or-j jjiu; ^l4isi£i:icB as. noxsxuaig isi-iiaag Isqxaoo -1JJ00JB sfi ot izelB 910EI ed LLii:! .sIsioiiTto srtJ afi IIsw a« .aJ-IuESi axlJ- "io ^os son-BOXlxnsie i-xsoig "io scf S.Si.\-i sancrio £ xioue ,\;I£)ixriT sbiciuo ioeiiiB o& scfc^ts sxid- "io ed'iolls siii gniier^J-iul nx iBrii aoliBQup on scf nso s-rcsxlT .irioitiJesvriJ: 10^ i.^J-irBO -d"i;o "iiii od" eloi^-i-io'o rx s'X£-. a&is^i aj^^jj.!.: i;^^!!! oi.sii;-iu bi^o ,vjTtxi5i"i£o £ 8fi stei xsi edi ease oiiw .^octssvnl sLJte lotz&rni ngiaiol" b bb 9x1 xioxxlw no 8X3£cf lBi;i'c»,6 srfd' sixxlw ,\tniHiiQotiu is:ei^ Io 'iOwctfc: e si ^baxBi rx adt ot oo:isivaa£ ovxs rieo 9:t£^a sxid- iloxrlw yd artcsm \:Ino -cnolxni.' "io oIi/i IxinoiiiJJ'xd'Bnco drisae'. i;i;j j-jsr-d' eTSv^qx^;}' ,£i9j:IsiqjB i)xie Lsvioaoo snxscf ax yjl iiBq JB ae .bnsivxioosi 9W snoaeg'i gssrl;}' "io lla lo'tl ,ncxc}-j-5xscj' "io med-evic e^ois&s edi to ncxJ-ou'xdrnooe'x sr^'J 'io 9x;l£v IIul sxLct iC inaaoo'ioltis ine'^tlib hiiB not*ouboiia.t edi^ ♦ ncxJ-i^xjad" ol Josi,cfi;a ^d-isqciq lis Io ^nsmeaseas 'ic axescT XSo "io xicx:tBSil3*xd'nao I.iiu:fos'i'i6 Io ^oi/or 9XiT 9d bXi/orfa sxfXijfior.Tfaoosi 919x1 eiB 9w xioixiv/ noxd'f.id'ainxrabjB noiaainxnioo xsi sxiJ o,t j^niiielansid' ^io" beisLqtaoo bn£ bsbcis&Tie "io Y^uL sxli- bne xB.t son^sJ'iisxinJ: 9ii^ "io nclizi&aic.i.u'^B odt .aeiJxIxJ'x; oxldx/q tcx-J'c lis xinjs aoxnsqinoo 9nor.q&l9J' anxesseas 87. V/e have already discussed the reasons for the latter recommendation. The inheritance tax "belongs under the jurisdiction of the tax comraission "because of the im- portance of the appraisal of estates and the other admin- istrative features of the tax. The reasons for thetrans- fer of this tax to the attorney general's office by Ch, 7 of the Laws of 1921 are familiar to the public. Without miniraizing the legal side of the problem, we are disposed to hold that the purely administrative features of inher- itance taxation are of such importance as to justify the return of this tax to the jurisdiction of the proposed tax commission. The yield of this tax will depend upon the completeness and accuracy with which the inventory and appraisal of estates are conducted, and the special taxa- ' tion authorities of the state should be given full powers of investigation and review of all such proceedings. The ordinary legal routine may be handled as it is today, by counsel assigned for the purpose from the attorney general's office, or by the commission's own legal counsel. .V8 edi tot anoajBOi edt bBseuoelb vljJBSiIa 3vsr£ aW tebass agnolscf xei son^.ti-zsnai eaU ,ticit£tKo:iS^ooQ'i zoUbI -mi arlJ" ^o sai-fBoscf noissiaz^.oo x£i sdi lo aoiioiboliu!: s£li -snBiiecli nol anoaesi en'T .:ce* sxid" "io 8Sii;j£;9l svJtd'JSiiEi ? .xiO ^d soxHc a'lfiisnsn Aj9nio;tJ-B axf* o* xsJ^ ai/iJ ^c lol ^jjoriitr.v .oxlcfuq sriJ- o^ ifiilinsl sie XSSI ^o 8V/J3j erld- Io f>9Eoqei:i) sis 9T .noldoiq srij- Io eoxa 1^39! erii snisxxciKXiu -isxircx lo s&tiJt::J. QYtii-iisinlrab^ x^eiucr ariJ d-sr-J- blod o:t srfj' x.'i-^^siJi;, oj' an soriBjioaaix ifoua Io oijs noxj£X£i* sonjcd-x l)saocxoiq erf;^ "io aoiiothBtiul adi oi xcd" eir'J lo nixictsi noqtf i>n9qsx) Iliw xei exri* Io i>Iei'i 9x[T .noxsaifruiioo xei bttB xio.+n9vrii 9x11 rlolrixr iiJxw xoBiirooi* fcns acgns^slqinco 9x1;^ ~ -sxsi iBXogqa 9fid bne ,bs:foiJbnoo ois eaiBtas 'Ic Lseisiqosi aiswoq Hut nsYXS 9d bluodB eJ-scfe 9ri;}' Io 89ii'iioxrj'iXB noxd" 9ffT .agniiiseooiq rioue Il£ 'ic w©xv9i Lnes froid-egiJ-esvnl Io ^cf ,yjBboi rJt ;?x as helbnBd ea x,en aniouoi l£j}9l y/tsnlbto a'iBisnos Y^^io^'^fi s^-J" cioi"?: gaognuq 9x£i' nol Ijanslaeii l98ni;oo ,l9snjJoo Ib-qqI itwo a 'noxaexrjcco 9xld" ^cf ic .goxllo 88. CEAPT3R IV . SCHOOL FIITM C ES IN WASHIITGTOIT . Article IX, Sec. 1, of the constitution of the State of Yfeshington is quoted telow. This is the only state constitution using this language: " State's Duty to Provide for Education of Children. It is the paramount duty of the state to make ample provision for the education of all children residing within its borders, without distinction or preference on account of race, color, caste, or sex. All educational authorities agree that the State of Washington has a school system notable both for efficiency and for cost. In 1910 it v;as ranked by an expert of the Russell Sage Foundation as standing at the head of the states of the Union on the basis of school attendance and expenditure of money per school child. Few states spend so much for education in propor- tion to their wealth and population as does Washiiigton. For the last year or record, 1921, the state spent ^28,493,158 for its grade schools and high schools, and ^2,778,000 for its higher educational institutions, comprising the state university, the state college, and the normal schools. This does not include the amount expended on schools for .88 .VI fiST^iAHC . WOTC'TII KS AW KI a SOTI ALII J00IID8 lo r.o ti SI i a e.noo eifd- 1o ,1 .098 ,XI sIoxJ-oA 8aJ- ax eixiT .wolacf ts^oiip ax no^'EnxxiafiW lo SofjcfS oxid' :9Ssx;£np.I ex^-'cJ- snlaij xioxijLfi'ii-snco ai&is Y-tno lo cioi iBp jji)c. _ lot elixvoi'j: get' , v;^ . J^ e/aJjsJ-S ■ Q^siie 9ncf "io y^wL J'nJJoxi--8'xsc^ sxCj- ax ;M ♦nsa. bJirlO IJJ3 lo xiox;tx:ox,'i)& orlv lol noxaxvonq slqnic s:i£ij; o* J-worlrl?.' .eieLioG aJx niri-xw anxLxasi neiijlxxfo ,aO£a iO ^-mioocB ac oonsio'xsT:*. io noiionzieib .X92 10 ,si^siJ0 ,ioXco 9i-Bd-2 edi isrli 99i3e eex^tincri.JuB Lsaciir'OViie LLk Xorioxox'ile ic"! r[d"oti sldizJon mact'SYa loorloa js ai».x{ nod-^nirleBW "io sxIJ' Io bsced srid i'ij srfxl)fi£«8 as, aQiiv.hnisol ^a-sS ilgasufi h£\B &OiiBb:iBii& Loodoe. 1c eiajacf sxiJ- no noinU er^J' to Baisie .blxxio Xoorloa locr x^enoi:: "io eirjiibnsqxa -loqoiq ci noxi.eouijs lol xiotra ob i)n9cra escf^^a ws'i .nod':3f:xr{8j8V/ asoi) 8b noxi-.eIirqoq br.B ridlesw lieri;! o.t ncxd" 8gI,cG± , .'U,, j-i.^._5 wj^s^^s srlJ- ,1201 .h-scoti io i£9\j d'ecl sxIj ioI ao'i 000,87^,24 £>n£ .aXooxtoa xisixl £>nx3 alcoxioa 9i);3is s^x io1 9d-iii-8 9X10 snlsxiqiiioo .anoxd'L'd'icfani Ienci*xoui)9 'X9xfsxx{ ad"i .alooxIoB iBrcion srii ons ,9391X00 aisia ecii ,\iitievi.c:u 101 aXcoxfoa no bQbneqxa imJOEiH adi ocwXcnx j-on &9ob sxxtT 89. defectives, or on reform schools. The average total cost of education in the common schools in Washington for 1921 was §123.14. For the year 1918, the latest date for which figures are available for purposes of comparison, the average, cost per pupil attending public schools was: $78,31 in Washington; $60,99 in Massachusetts; $12.32 in Mississippi, the lowest in the Union; and ;?49,12 throughout the United States, The records of the state superintendent show that the current cost of education per school child has increased from $49.52 in 1912 to $97,35 in 1921. The accompanying graph represents the annual increase in cur- rent expenses for education compared with the average daily attendance and the wealth of the state. The sources of support for the state system of education are fourfold: (a) invested funds, (b) state tsix- ation, (c) county taxation, (d) district taxation. To these sources should be added the contributions made by the federal government to the state college for the encourage- ment of agriculture and to the state department of education for vocational training, (a) The state possesses $17,260,771 invested .ee Isioi 9SJS1SVB 9xlT .alooxloe nno^at no lo , sevitoelsij nod^gniiiaaV/ ni eloorloa noiianoo orU ni noliao:jb3 'lo *aoo lo eseocii/q lot BldAlier^ six; sattJ^sil xio ixiw io1 ei&b oilo'i/q anxbneo js I'iquq isq Jeoo &3£i9v.e 9rl;t .ncsi'iBomoo ja:)-d-9 8iJxloBa3,BM ni 66,03^ [nod-^iniiiaeVr 0! IC.8V$ :ae;v eloorloe Sl.e^'v 1)03 .-noinU sdi ni JesT.oX aricf , icqieaxaaiM xii S£.SI# .eecTjB^S £)etinU arid- :J-i;Qrij^,iJC7x[J woiie Josiins^niisqiie sd-fi^ta Oiii lo aLiooc-'i oriT 8£rr blhio loorioa i^jc noxi'BOJjLa "ic .taoo d-nsiiuo srid- d-exiJ- siiT .LSQL ni eS.Ve| c:^ Siei at Sd.QH woil b98BO'ioni -Tjjo ni 9S£9'2oni liiirnne ould' ecfnoes'iqsi ilqisia 3ni\;nec_flioooe ^lifijj t33js:c9va sxij dj bir i>9iBqn;oo noiJ'.eoi;i)S lol asansq^ce i'n9'r . sci-fi d^a edi "^ c d&L&sif Qdi bci£ stoiisibn^ii^ lo zQie^'S eiBie srU tot izocasje Ic seoiuor. srfT -xjs* 9d-.6ta (cf) ,ebr:sjt bsiaovni [a] :blo^'£uo'i ei& noiisoi/Jba oT ,tioi:fBXBi iotiisib (b) ^n-jii^xsii vinuoo (0) ,r;r.r,+/\ 9£i'i v;(, ei)B.-n anoioii'cii'xd'noo sn'.d' b9i)bfi so" £)IiJcrIe ssoijjos sci^xio -9gjs'Xi;oon9 odi loJ 939II00 9d'i:ie sdi ocf c^n9c:ni©voa Lssiobet aolisouba to incmiiscQb e&eie. 9£ii od" bnB szuiluoii^jz "ic cfnen •sninici^ I^noxvfoor lot i)0d-a9vni XVV,OoS,TI^ eeeagtaoq gJ-JsJa eriT (js) 90. funds for educational purposes, $208,150 of which are de- signed for the state university, $1,182,195 for the state college, and #15,870,926 for the common schools. The in- come from these several sources of revenue should be added to the income derived from taxation, (b) State taxes for education in 1921 amounted to $^1087,147,91, representing a levy of 5.34 mills, or ^20 per school child in accordance with legislation passed by the extra session of the legislature in 1920. The amount of the contribution v^hich the state should make to the cost of educating the individual child is a matter of judgment on which opinions differ greatly. In 1895 under the so-called "Bare Foot School Boy Law", the state for the first time recognized its responsibility for adding elementary education by appropriating §6 per school child. This was increased to ^ per school child in 1898, and to 510 in 1901. The total amount so expended advanced from $646,600 in 1895 to $1,300,902 in 1901. The state's contribution was raised to §20 per school child in 1920 and the amount of state aid in that year was $5,730,334. At the same time the total cost of education in the state swelled to $20,739,846 in 1920 and to $28,553,333 in 1921 - .06 -9Jd sib riciriw 1o 05I,80So .eeeoqiJJc; I^noxd-f^ojxbs lol abni/l ©J-BCfa srlcT lo'i 661,281,10 .'icMeisvintf Qisie e:ii lo'l i-onsia -ni 9xfT .sloorioe noiritcoo sxlJ- lol SSv,0V8,SI$ br.£ , 9391X00 f)9l5jjB od biucde ©unsvsi I0 aeoiuoe l&ievos esedi cioT'i 6i.n-;-> ,noiJjsxj3;t uioil beviisb 9G!.ooni erl^t ocf bj- b»3:nuomB XSSI rx noi*x30ur;9 lol eex&t 9J-£*3 (cf) 10 ,all.tin ^S,e "io a^ysX jb sr.ii-nsesiqsi ,XQ, V^X, V80j3| baeesq noiJ^XalasX xii-iv; sortabioooB ni bXlrlo loorioa 'xeq CSy .02GX ni 9TjjJfiXsis9X 9r£J lo noieaga siixo arlJ x^f ad-Bia 9x{- rioixrw nolJucfiiJ-noo srlJ Ic tnvor^ srfT JbXixfc lex/biviiirii: srii' 8^i:c^£;oiJi>^ lo d-aoo siii' oJ e.uBm i^Iucrle .Aild-fiSiS lexlil) anoiniqo xloxriw nc i-xisinsiiiiii lo isi^^Bir: b ai 9iiJ- , "WBiI Y,o2 looxioB d'co'5 siBd:'' i)9lXjeo-03 sriJ' nebuu CG8I nl nol i^i'lIxcfianoqaoT s.ii hosin^oos's enil* 3'G'ii'?: grid- 10I sisio looxfoe i9q S^ ^ntisitqo'iqqB vd" noidsojjijs ^ladTiOiroXs gnxbie ,8G6I ni: Jblxiio Xoorioa i9q By cS b&ssBtont asw sxriT ,bli.£^.o bQO[i£Vs:>B l59i>noqx9 03 Jntrorrie Iicfod sriT .XCBX nx OX^ cS ons 3*5ijiie 9XlT .XOex nx SOe,00£,I$ o* aeSX ni 0Ce,d^6*, noil 02SI ni i>Xxrio Xcorfos it.q 02^ cd" £)93X£i asvr noid-utfiidrroo .^f.8,05?,3|; 8£\7 i£sv ss:iLi ni btG eizia Jo iciuovj^ sd:^ bn.B gd-jed^e srld- nx cioiiaoubo lo d-eoo XBcfod" srid' griiid" 9ir.e8 orld dA - XSex ni. S5£,St;e,82^ oi bn^ 02CX ni dl^e.eev,OS$ od i)sXX9ws 91. an indication that the districts as well as the state had increased their expenditures. The facts do not seem to justify the expectation that if the state should give more, the districts will give less. (c) The anount assigned to the counties, §10 per school child, has not varied in recent years and does not seem to be an occasion for dispute. The total con- tributed by the counties in 1921 was $3,730,723.31. (d) There are 2,595 school districts in the state which raise by local levy the balamce necessary for educa- tion in the districts in addition to the amount contributed by the state and the county. These districts vary in wealth, in population, and in educational policy. They are restricted by law to a levy of twenty mills. The dis- trict levies for 1921 amounted to $16,239,382.24, which was 55.96^ of the total amount raised by taxation for educational purposes. That education in \7ashington reaches adequately the majority of the children is shown by the following facts: 147,652 children attended school for 181 days or over, in 1921; 139,693 attended school for 161 days or over, but less than 181 days. Only 7,768 had less than 160 days schooling. .IG b£Xi ej-BJ-a Slut ee ILsv ec e^^oiiiatb ctii Sarli aoliscibnl ne ,3eiJLfCtii)XT9CrxO itsdt f)9EJ3910nl noxd'B^09q:c9 sciS \,tliv.ul oi ino9a Ion oh scfce^ sxlT Iliv/ BSoittezb sdi ,9iyr.i 9vJ:s LXuoxIs QtBio ecii ti j^ri^ ,8391 9Vl3 Olij: ,a9i::fnuoo eri;!" od" bonsiesjs J'nirons sriT (o) S901: titc eiJ39Y; J-noo9i njt LeliBv j-on aaxi ,LXixio Ioorio8 i9q -fioo IfcJ'ocf 9ifT .sd'UcxEii) icl nolecooo hb 9cJ' od mooe ior. ,IC,SS:V,OSV,S;i: asv; isei ni esltnuoo i^di \d bstudtii eisi3 edi ni aicitiiatb loorlos 265,2 ozr. '^ -^riT [b) -Boubs lol Y'^Baesosn oonelBci gxiJ- i^veX lijool ■v;a' satsi doidvr i)9*jjciltdTioo Jnjjonis eiii oj noiJ'ii)l)B nl eJ"o iiJ-aii) ari!^ nl ncid" fii Y'J-'*^"''' a^oxiJcii) 9a9riT .^id^nuoo arl* bae gJ-fiJ'a 5di x'^ Xsd'2 .\otloq_ iBaoiiBOubs ni bns. ,noLisLsjqoq ni ,il:MBOw -sib 9XlT .ellin: \;Jn9T/J "io \;voI s oi wbI y;cf beiotttasi Qte B^'V rioxrlw ,^S.S£f ,ees;,dl|; o* hsd-niroraB IS6I lo^: 89XV9l ^oxiJ- XBnox*«o0h9 lo'i ncJ:J'f3X£;t ^c f>9ex£i invocus leioi sdi lo t^^se.es ,a9 8oc-rijq "ZZoir.upQbi^ 8 9I10B91 rto^anixie.sAV ni noli.'ioube ir.dT rad-OBl sniwollol ed.i ^d nwoxia ax nsiialxrlo odi lo ^;}"lioi,£ci sxli ni ,isvo no s^Bb 181 lot loodoe i>9bnsJ-oS ngiblxxio S5d,Vi>I 8891 iuc ,isvo no a'^ceb 151 -ol loorioe Lebnoj^B SQ3 , G5I ;X£GI ♦ Snilooxioa 3Y,izb OdI fiBxU- sesi bs-d 86T,? \;InO .SY^b 181 r.adt 92. These last were pupils in remote and poor districts, where adequate educational facilities could not be fur- nished. In some of these cases relief can best be afford- ed by direct appropriation of the state board of education, and in other cases consolidation of adjoining districts will provide a more efficient education for a longer period and 7/ill reduce the cost per school child in the districts which are consolidated. When your committee compares the cost of educa- tion in Washington with that in other states, bearing in mind their wealth and their population, and when it dis- covers the steady increase in the cost of education within this state without reference to the state's population or wealth, we feel compelled to urge the suspension of further increase of taxation for school purposes until the taxable property of the state and its population have relatively increased. There is no question that some school districts are not now getting the educational requirements that it is the state's duty to provide, even though the people of those school districts are levying as high as twenty-eight mills upon themselves to give this education. It is also true that there sure other school districts in the state .se ^cicltiaLh looq bos sJ-omso: nl aSlquq siow iae.1 oeaxfT -tijt od ion blvoo aas:&i.llos1 IsnoliBOUbo Qifiupebs> aiarTw mt'iot'is Qd iaeU nso tsi.l&i aae^o eeoAi 1o smoa fli .bexiein ^noitBoube 1o biBod a^Bia Qdi lo nclJ"J3liqonqqB toeiib ^"^ f)e ecfoJciJ-aiii sninxotbB lo noiJ-Jsiilcenc-j sDaco isrl^to ciX bne boiisq i9snoI b 'xo'i noiJ'.e.oi/JJO Jnaicx'iiS) e-Toxu £ dbivoiq Iliw Bctolijrib aricf ni bltcio loorioe isq j-soo t^riJ- eoubsi lltx} brie .bsJ-fiblloenoo 9i£ lioldvr -Boube lo d-Goo exf^t aaijaqiuoo sad-iii-not) luov nsrl'v/ ni gnxiescf ,aeiBie 'sedio ni o^rl^ dtiy. nod"2iiixl8sW ni noid" -exb i£ noxiw bn^ ,noxd-j3luqoq ixsxl^ baB dSLBQVf itQdi bntsz aldilvf cioiiBoube 1o cfaoo odi ni secoionx yjbeeJ'a oxiJ- e'xevoo 10 noiJ-^Ixfqoq a'scfsd'e 9xiJ od" sonsislai iuodilvr siste eid& zoditul lo ncxaneqax/a edi 93^1/ o;t bellsaraoo las'i ew ,dtLB3VT elcf^XB^ 3xlj Ixoax; eoeo(:T:uq looxfoe 101 noi^jcXjB^J- ^0 easeioni ^lovld-Elsi svBxi nolJ'j?IiJqoq eii bas eis>ia &di to x^rsqoiq .bsasoioni: adoi'xJ'axb Lcodon anoe i£:r'.i rfoxJsoxjp on ax 9i9r£T J-x iiirld- ad-nsra&ijtjjps-x iBnc.xJxsoubs exlo artlJ-d-93 won ion sis lo 9lqosq edi di^uodi nsvs .sLxvoiq ci \iub 3*Qici8 adi at td^to-Y.icisy^i ae xfgxrf sb Sf;x\;v9l eia aioiiiatb loorios saoxfi' obIb ax il ,noxd".'iOJjfc9 ahii gvxg oi asvlsarnsxld- noqjj allici 9^B*s edi ni ai-oiiJ-eib loorloa laxi^c 01s eisdi i&dt siszi 93. in which the number of scholars may be materially less - or more, it makes no difference - but in which tiie assessed value of the property of the district is so great that they have more money than they know what to do with and it is often spent on high class gymnasiioms, teachers cottages and apartment houses, water systems for rural communities, playgrounds at a distance from the school grounds, and in other unusual ways. These expenditures must be checked, but we submit that they cannot be checked by continuing the present system. The whole school fabric is working upside down. The state should levy and collect taxes from the larger dis- tricts and be able to use the money in the poor districts without being required to pay to the rich districts the snme proportion per census child as is paid to the poor districts. The only v/ay this can be accomplished is by changing our system eo that the state will prescribe a min- imtira of educational requirements and require every school district to levy a taoc sufficient to meet these requirements. If any district after levying the maximum araount in order to meet these requirements falls short of the amount necessary, the difference should be made up by levying a general tax for that purpose. In t'ais way the state will not be paying .se - 83©! ^LIziieiBOi. ed •^sci aijsloiiris lo ledaun srl^ rfojrlvv ni £isa80aai3 erIJ- xloxxiv; ni iud - aonsisllib on esz'p^i'.i ii .arorri 10 YsxiJ- i&di- d-BSig 03 ai vOXid'ail) sxiJ- lo ^J-iaqciq anJ- "io bjjIjbv 8i ^i -bnjB xid'iv/ oj:> 0^ J^rfw won:I T£9xiJ- nsiii ^saou sicra. svsxf asaBoioo uieiicrei , .-:: xrJtaBncrt£, sijbIo xfsxxf nc insqs neilo ^aeiilaumnoo l^iu's 101 oX;.sd3Aie is^taw , esaiioxi Jnemd'iBqs bn£ nl bna ,ai)nuoTa Icorfos sxfi moil eooBisib b isi afcrri/oiaYf.Iq ,£)9:ioorfo gcT J-rura asnwiiijnsqxs sesriT .a-\iJ3W iBueunjj lariJ'o gnxjini-fioo \:d be>Lo&do sci J-onnso ^^csrld- ctiixf^ tisidua sw J-xjo" ,xn3^e"^3 J-nsaoiq siii .nwoi) sJbxaqxr gni^facv; sx oxicfsl Icorloa sloriw oriT -3Xi3 rtsgial aifcl- mo-xl asxaJ- J-osIIoo bit£. y;jel blucrle oi&is srlT aioli&sib looq sri^t iti \;9noin &di aau oi slcfa ecf btiB oioiti QiO- aJolacfexi) riox-i adi oi rBq oi bstiupei ^ixiiscf ikjodilyr rtooq sri;}- cJ" biaq ax aa blirlo euafioo leq nox-ioqoiq env=a rjcf ex /)9ri8iIqinoooB 9cf nso aidi \jew \;ino *3xfT .ad'oxiiexl) -nxm J3 ecfiiossiq lllv eisiB sdi ijidi oe nis^faYa ijjO gnxsnexfo loonoa y;i9vo siiupoi I)r;B a^tnsriS'rxjjpo'i iBnoxjBDJjLo lo nixrrxt ,8:fnor:i9ixup9i gsoxfJ ;t99in o- instottlue XBi s xP^sL ci ioiiistlb tobio ni insjoiiTB raurcixaxi: edi snxYvel isJ-Ib d'oiaJ'exi) ^njs II ,^i.':8sso9ri ont/onie 9if;t 'io ^'loxia a.ri£i acfngneaxirpgi gaorij- d'99n oi TZBi leisnss b anJtYV9i Y^f qi^ 9i3£X:i 9cf bisjoda eonaie'i'itb odi Snx^Bq 9Cf ^on IXiw siir.ia edi ^svi si.:.i nl ,oecai!jq isdi 10I 94. school money to amy district that has sufficient property within its borders to carry its own burden. There could be no objection then to one district having greater educa- tional advantages than another and there would be no dis- tricts in which the scholars are not having a full nine months school term with competent teachers. Then if the people in the so-called rich districts saw fit to burden themselves for additional frills nobody should complain as the state would be losing nothing and the districts them- selves would be carrying the load. CHAPT.^R V. OTHER SUGGESTIQITS AlTD R3C0IMEan)ATI01TS . We here present our comments, suggestions and re- commendations on certain specific proposals which we have studied, or v/hich have been urged by persons who have ap- peared at our hearings, 1. BUDG'JT : We have referred frequently in the course of our discussion of the state's financial problem, to the import- ance of a comprehensive control of revenues and expenditures. .*e bluoo sisrlT ,aeiiisjd rrwo aii y^ibo c* Bi9tioa etx nixictjtv/ -Boube leitzsfg gnivBTl J-olid-eil) ono ci rocLf noicTosQd'o on scf -eib on scf £>Ix;oTr onsriJ- ^rrr fon^ton^ n.sri;^ sosfdrr^vba Ijenoi:* anin LLut b ^nxvjsri c^on oia aiBloiioe srlJ xioirfw nJt aioiit B[li Ix noil'i' .gisrioss* ^nod"9qmoo xl;Mw cneJ looxioe arid"noni ciebisju oi cJ-il wjsa ad"DJ:id'8ib doit b&llao-oa sxiJ- ni slqosq as-, nialqcioo blULile \;i)Oaon allii'5- LsnoltlbbB lot E9vl3sc;':xl^ -flOxC^ a^oxi:fexi) 9di bns anxxlJon snlaol scf bluow s^sJe sriJ • hscl eriCf ^aix-i'xzo acf i>Ixfow savlaa .VH^-T3AH0 , 81101 TAC T-il CITIi. SlIOITc^'uf-OOU S figETO -91 bns 8noxd"89Sc1^s , ad"n9nanoo ix/o -rrsasiq s'XDri aV.' svjrjxi 9v/ iioixfw aleaoqoiq oilxosqa nla^iso no encxcf^bnscacco -q£ sv-3xf oxfw anoaisq vcf isgix: nesa' evaxf lioxxiv; 10 ,b9Lbuic: .esnxi£sn iwo ;ts Jbaiseq : ILpgua .1 •xjjo "ic 9c:ix,'C0 9x:[d- nx vIcfrtQi/poil wsiislsi e^--;' ■-••^' -^Toqcii srLt oi .fnsla'oiq XsionsnJc'i a'sd^scJ-a sxi^ lo noieax/oexJb ,a9ijjd"xi)n9axs M^ asunsvsi 1q loicfnco svienQiisianco X3 "io sons 95. This control is fundamental to economy and efficiency In public administration, fir it is evident that there can "be neither efficiency nor economy in public affairs while there is lack of coordination between the revenue-raising and the appropriating agencies of governijient. This coordination of our financial system can only be effected by means of a budget system, by which there will be brought together in a comprehensive plan, the estimates of revenues and expenditures for the fiscal period, with adequate authority to control these estimates and the financial operations of departments in the interest of the general public. In the course of our public hear- ings over the state, no single topic was referred to as frequently or with such approval as the subject of the budget. Those who advocate the introduction of a budget system as a measure for the promotion of greater efficiency in public affairs are sometimes inclined to think of a single budget which will give control over local as well as over state expenditures. This is obviously impossible. We are obliged, therefore, to distinguish in our discussion and in our proposals between the state budget and the means .36 nJ: xonatotJIe brte T^raonoos o^ LaiaorsBbatfl at. loiinco slriT HBO Qioiis JziLi in^btvs ai it ixl ,txQiSciislnimbe oila'jjq alirfv/ aiialiB ollcfuq nx ^aonoos ion Aior.sJtot'Jlo tsdiisn ocJ Snxsxau-9JLrn9v&i e^£c^ nsow;t9cf noxi^nxijiooo lo jIobI ex eiarii .Jnsranaevos ^o esxoaas^ anx^tsJtiqo'xqqB sdi has. njBO ueoa^a Leior.isnxi zuo to aoi.iiini.b'iooo ajUiT xCoirfw -^d ,c;^;^aY3 d'esLxro a "io arusam xd beiosIJa ecf ^I«o ,fielq svianonaiqiitoo fi nx isrfd'ssocf ^tilaxicicf sd IIxw 9isrl:t leoail 9xic^ 10*1 esix/lxLneqxs i^ns esunsvsi lo eeismiiad sdi eeisBii-^es aasrfJ- loiJ'noo cj ■^j'iiorld-iXB scfcuppfijs n'Jxw ,i)oia9q J-asie^tni sxiJ" nx ad'narKJ^'iiscai) lo 3noiJ"£'x^jqo Ifiionfinil erlJ- I^ae -X09X1 oilcfuq ixro lo santroo adi nl .ollciijq I^isnes arid' lo as oi JjQinelsi aew oxqo^ slsnjca on ^9isiia 3di levo agni arid- lo cfosttfua edi ax5 lavoiqc^ rioxfa xictiw lo \;I;tii9x;psTl »d'9Si)iJcf J-gshxra B lo nolJoui)0'xJni srlJ gJcoovLs orlw seoxIT YOneioiils i-Jeaig lo noxJ'oxiiO'-:;q sxl* lol 9ix/8B9m p. bjb 0t9oG\;3 ©lanxa a lo :ifiXii;t oi ijgnxlonx e9inx;toiiica o-xb a-xxjsll:.} olLduq nx 19V0 es Il9W as LcooL levo loiJnoo 9VX3 IIxw rloJtxiw io^bud 9\i , 9 Id i 3 8 oqrci ^-i^aJ^oivdo ai sixfT . aertuu xi)i:9q:c9 scfisJ-a nciaexxoaxi) 'iXfo ni x^^axxisni^texu oJ ,9ioi9i9Xid- ,£)93xIdo 9ifi 8n£9in 9fit i)ns is^bud 9j'£ja orlo n99w^9d alfaoqoiq ixxo nx Jbms 96. of budgetary control over the thoussinds of local spending units. The State Budget ; The development of "budget legislation for state governments has gone on very rapidly in recent years, until today almost all of the states have taken some action look- ing toward more business-like control. Twenty-four states have so-called executive budget laws, under which the gover- nor is responsible for the initial budget plan, and twenty- one states have provided budget making authorities of the board or commission type. Through the administrative code of 1921, ^i7ashington has taken the first necessary step toward a budget system in providing the administrative co- ordination of the state departments and the means of com- piling the information relative to e:cpenditures upon wMch the budget must be based. On this foundation it will be a relatively simple matter to build a satisfactory budget system for the state government. We do not consider it necessary to elaborate the arguments in favor of a state budget, nor the details of the plan. We recomiTiend the introduction of the executive type of budget, v/hereby the responsibility for the budget is placed upon the shoulders of the executive, who should .36 ,c.itnu 3jBd"a rol noxli?IeJ:s9l i'sgfjua "io d-nsnrqcleveh erfT Iltnv ,eiB3\ ortsooi ni \lbLq_si \:isv x;o snog 3£xl ainsccinievo^ -•AqcL rfoid"oB sraoa ns^tB* sv^ri asi^ie srft "io lis ^sorrilp --^i^o* -nsvoa eiii xioixiw isfcnu ,8v/£l d-egbt/cf avitijosxs bsllBO-os svjsrl -\Cwn37;j- bos ,nBlc J-a^bi/c' Jf.xc^ir:! srli" nol ela'ienoqeei ex 'xon uiij io e.si.ii.'i.vi.i'U'j -^ui^^L. jt.,-^j.-.;j^ jjaJDivoiq sv£r£ saisie sno SYid'B'i^exricibe srfJ xlguoirfT .^qvj noxeeiiimioo no aisocf qeJ-a x'taseaoea j-aixl scii ns^lB* ssa' no;fsr;xx{aBW ,isei "io eboo -00 BviJBzieinii^a sdi gnxbivoiq nx .^sJ-ai^s ie^j^L^ ^ bT£7;o;t -moo lo sn^oni edi bns, aJnoniJisqeb eJ-fiJ-a sdi 1o noxJjQnibio rfoif-w noqx; esiuiibaeqpzs oi sviislsz noliRsmo'tnt arli gniliq ,b9 3Bcf 9C1' oai/rc d"9abi;G sdt elqmia ^cIs'^'^^-bIs^ -s ed" ILtvi d-i noiJ'sJbnuo'i airij- nO e&BZodsl9 Cu x'i.:jcBeoe,n is. lohxanoo ioci oh o.. . j'ns.'iiiiievog 3lxj5;t9b 9fiw ion ^ie-gbua sisis & I0 lovsJ ni ai'necujg-iJB sdt avxJ-jJosxs odt lo noxd'oifbo'xJnx gxiJ- basL'Snooet sV/ .nslq axfJ lo ia^^sjo fidi lot vj'llxaxenoqcsi arlJ' xfieisdvr ,S32bva I0 9qvJ blxfcxls oriw ,9vXcU09X9 oricf to eiabluoxfa edit noqi/ beoBlq ax 97. conpile , for submission to the legislature, the estimates for the various departments of the state government. The executive budget is to be preferred to the board or commission type, first because the executive has the final responsibility for the operation of the state government and he should bear as well the responsibility for its finances; second, having this responsibility, the executive should possess adequate and final authority to control the details of the financial plan; and third, be- cause the people T7ill hold the executive responsible for the results, whatever the system of planning the budget. The crucial feature of sjiy budget is the status which this budget has before the legislature. In England, where budget-making has attained its highest degree of per- fection, the budget as submitted becomes a bill for the consideration of the House of Commons. Proposed expendi- tures may be reduced or eliminated, but may not be increased, The recent budget law of Maryland provides: "Neither House shall consider other appro- priations until the budget bill has been finally acted upon by both houses and no such other ap- propriation shall be valid except in accordance with the provisions following: "(l) Every such appropriation shall be em- bodied in a separate bill, limited to some single .ve seJBntjtoaa sriJ , etuis Is i:-°,.el edi ci ctolaBlsxiija lot .sllqnoo .dTisri.nisvos siGia oili 1o sSnamiiBqeb euoln^v sxid" lox arid" oo bsiisleiq ed c* ai Jeji.buo sviJ-wosics oriT asxl 9vid-x;o9X9 crid- seueoac J-stil ,Qqyi nciaeitmoo 10 biBocT sJaJ-a edf lo noi*r>-ioqo srfj lot -^d'Jtlicfianoqasi Ismail Siii- ^illici'ianooiosi o/ii- LLoxi aa ib9J olifcrfc sri bnB j-nei.L'iTSVog arid' j-^J-ilicfisnociaQi aiiid" snxvsri ,/)iioD3a laaoasnil sj-i lol -9cf .hiblJ- ons ;n£lq Isionj^nil axlj Tro sltai&b srit lo'x'noo To^ 9lJxanoaa9i ^riduosxo sild" i)I ori XI iw olqoDq axIJ" sauso .tsgbjjtf 9rid' aninnsXq "io m9J-a\:8 edi aevglsriw ,si-Iu.^.9i odi aui^ie. sdi ax taa^wcf \rari Io eiui.zoJ. Lntosjto idT -•X9q ^0 09139b J'agxisxri 3tx bsnxsd^i; asd 3ni:;lBni-d"S3bi/cf aiorl'A' arid" -xo't Ilia" 2 asmooacf b9.tc^J:rad■l;8 as d'93btr..i' srLt ,noLd"09'j- -xbn9qx9 b9eogoi^ .anciiiHoO -o asuoK oriJ- Io aoxd-aiobxanoo ,baa^oiocit ao ion ^^^5x11 cfucf ,b9d"Bnxir;xl9 10 beoiibgi sa y^m a3x;/i :39bi-/0'iq ba^lA^iBTi "io wbI d'aabx/a d'n909'i eril -oiqqs 1-jiLio labXGnoo Ilc^ris sajJoH iiJiId-xoTI" ^Il^nf'i n99d asri IIxci' dogbua exfd IxdrtiJ aiioid'sxiq -qs 'it'rid-o xfo0s on bns nas/jori ri:focf -^ noTAX bgd^oe Qoasbiooos ni d"q90X9 bilBV sd Ilaila noxJ-si-iqoiq rgni-p/oIIOi anoxaxvoiq edi xlilw -iag 9a' XlBxia ctotia'viqo^.- ji doua y^iev'S. (I)" sl^nla Siioa od' bsdiinil ,J.Ixcf aia'xsiqaa s nx baiboc'' 98. work, object or purpose therein Btated, and called therein a supplementary appropria,tion "bill, v/hich supplementary appropriation bill shall provide the revenue necessary to pay the a-ppropriation thereby made, by a tax, di- rect or indirect, to be laid and collected as shall be directed in said bill," The above limitation does not apply to an appro- pria,tion to provide for the payment of any obligation of the state. The general assembly may amend the bill by increasing or diminishing the items therein relating to the general assembly and by increasing the items therein relating to the judiciary but except as hereinbefore speci- fied may not alter the said bill except to strike out or reduce items therein, provided that the salary or compen- sation for any public officer shall not be decreased dur- ing his term of office. The iTebraska budget law of 1921 contains the following section relative to the same matter: "Sec, 12, Appropriation bills submitted to lep:islature . The Governor shall also submit to the legislature at the same time he submits the budget, copies of a tentative bill for all proposed ap, ropriations of the budget clearly itemized and properly classified, for the en- suing ap ropriation period, and no appropriation shall be made in excess of the items and recom- mendations contained in the budget unless by a three-fifths vote of each House of the Legisla- ture, but any item or recotimendation therein contained may be rejected or decreased in amount," The details of financial control are being rap- idly standardized in those states which have already .se bas ,&3d-s*a rxton^di oaogiJJc; 10 i-oottfo ,>[iov/ Hid noilsiiqonqcf/i vxsctnaraalqqjjr:; rioiriw .Ilicf -ih ,;csd" B Ycf ,9bj=;:i: ^^ijoijiIo noxd'-'iiTqo'XsIt.:^ oxict 2i3 o9;)'0sXIoo hnsi bi^I ed oi ^iooiibni to ioQi •'.Ilicf bhsy- at I)slo9ixi> scf Ilsiia -OTqqs a.-3 oi xlqqa d"on 36 0^ noiJ".s:tinTxI ovoob exfT "io noi^^axlcfo y^'^ 'i^ ^nannceo arii' -lol siiiToiq oi notiBiiq ^d IIxcT srivt bnsroB ic^ra ■"ilcTjassajB liJienaa oxiT .ai.ziB ecii 0* 3nilJ3l9i ni9i9xl« aniaix orlj- anirlaxnli-axi) 'xo ijata.BetonJ: nl9T9rIcl' aicsj'jt sxit gnx^^oionx ^d" iKtn ijXcfxooaafi XJ3i9n93 9xlJ •ioeqa ozolodnioted ajs i-qgoxs d'ud ^i-aioxij^t ^^i* 0* gnx^^Xsi 10 .tjjo QilxiJ'a 0^ +79DX0 Hid" bi-oa oilj- lo^IvS Jon y-s^ b9xl -rtoqiaoo 10 ^'i:iLi:,a anJ J"^i:i* hs-uivoiq .nxoioxld" aasJ'x 90Jj.b9i *.ijjI) £>9as9io9l) 9ci' ion XXfiila -x9oi-'io oiXtfwq ^^ts lol noxJ-sa .aoi'i'io I0 nnsi axrf sni 9iii- anxisj-noo XSSX 'io wsX J-saijud s:£^s:iTd q'.J. sxiT riacfcf'sx:: gmsa 9fIJ' oi sYiislei noxJ'oga anxwoXXo'i bsJ-J-lncfup. aXXJccf noxJ'.sx'iqoiqaA ,:2X .og,?" i-xnxcfifs osXn II.3.L-irj 'lon-roYoO siiT » ijifj 3'j ?Xex'A9X o.t Bih:iduu or^ <;.-:J:.j' srsisa erij is oisjislst^el odi o.t Xl£ lo'i XXid' g-rij-.cd'nsJ- j to asxqoo .isahjju gri^ YIi-39Xo ie-Qbud adi "io 2nox.t.sxiqoi ;qo Jbgaoqoiq -ns ex^* ^ol ,1)9x1:15 3^5X0 Y-^'tsqoiq Snji JbesimsJ-j: noioJ^iiqoiqqiJ on ii;nj3 ,l)ox'X3q noJti'^'siiqo'x sC-^ gniiws -£30091 ijrr.o amaji odi "io 3300x9 ni eb-arz od XXsrie B YC*' 339Xnii ie-^bud 9ui ni Jjanx.^J'noo 3noxd"';i)n9iii -.oXaxssJ orfj- 'lo aatroll :ioaQ xO 9toy axli'lit-ceirlJ' nis'iorid- notiP.biio'iU;ioosi 10 mai'x Y^i-3 :^uJ ,oiui '^.iciuotoB nl bosBQtoeb to bsioalQi ed Y^^ra i)9nx.^j'noo -qiji gniad" 91b XoiJ"noo X^sion-sxxi'i "io sLl^iiob srIT Y6e9'iX:3 9VfixI rio lilv/ adisiis esorii ni. bo^ibiabnaSa ^^fet 99. introduced the budget, a,nd v/e may pass over these matters here. The introduction of the budget would possibly necessitate some changes in the manner and time of making the state levies, but those matters could readily be ad- justed. Today the state equalization committee decides on the state levies in advance of tlae bien;-ial sessions of the legislature, and in advance, therefore, of the appropriations v;hich will be made. Under the budget sys- tem there can and should be a closer coordination of levies and appropriations, since the one measure v;ill carry both the appropriation and the tax rates or levies necessary to meet the proposed expenditures. It is essential in any budget scheme that the audit be made indepentently of the agencies v/hich prepare and administer the budget. The state auditor is a constitutional officer, and his authority •Jlr . should be extended to permit a full and complete audit of all transactions dealt v/ith in the budget. Local Budgets ; The problem of local budgetary control is very much more difficult than that of the state budget, because .ee .919ri anjfc>f.s£i lo o:zij bnji isnnsn aria^ ni 29^n3:io 9n:oa 9J'sjj:3i;909n -be ed xltbsei bLuoo erottsa seorld' tud ,39Jtv9l gJ-acTa sxt)- a9i>xn9i) Qottiasnoo noicf^fcllsixps 9t;i^8 srf^ Y^boT ,h9j"2juc, enoiaese I«J:. ndJtcT ariJ lo 9on..iYjjfc nl aoxral sJ^jj-a j-iS no 9ri;J- lo ,9To't9i9i:Ij ,9onevi)s ni .bni5 .sajj^sXaxagl 9x1* lo -8"'ia i'S3bwcf 9rii' i9i)nU .9b5ia ad" IIxw rfoirCw anox JaiiqoiqqB 39XV9I "io noxcfjsnxbiooo •x93oXo £; 9^ blued?, btis cv-io Btodt' aot rf^od vjTi'i.ro IIxw aawassn 9no sxlJ' oonxs ,3Xioil3iT:qoiqqs Jbns ^TJ333959n 39XV9I *ro a9ii2t xBo 9x1* .^HB Hoi^B J:iqoiffq3 erfi' nx liixi'nDeag ax i"! .a9iuJ'xbn9qx9 b92oqoiq oxfj- i'99a o* lo 'il&neinoaQbai ob&m ed ttbva edf isrit snisxioa io^bud ^n.e 9xIT ,t3^bijd sdi igd-sxnxcibxj bns 9:tJ3q9'iq doidvr agJiongss 9ri;t viiiodim^ p.i'. b"r ,'X9oxl'^o I.snox-jJ^iJan''- >- ?x lo^ibxfB si-isd-a lo tibsj^ oieiqaoo bxis IIul 3 iiansq oi b9Lrj9oX9 9^ blxroiic ,t3-Qbud 9riv fii xliivr Jl/sab anoxJoBaoait Ila ; aosab.crg XssoJ Visv si Loiiaco Y'la^fegbi-fcf IjsooI lo adldoiq 91IT eaueogcf .J-gsbucf 3J-j3*3 stit lo J'srld' n^J- J-Iirolllib 3ion liouta 100. of the large number of local districts liaving legal author- ity to levy taxes and spend money, and because of the v/ide diversity of activities and functions which these districts carry on. There are various preliminary reforms in local finances yrhich are very desirable if a proper control is to be established over these finances. Among the more important of these are a uniform fiscal year, a uniform system of a,ccounting for all local districts, and a recon- struction and consolidation of such districts wherever pos- sible. These steps will simplify the task of budget super- vision greatly, but it v/ill remain a very difficult task. There are two alternatives for the establishment of supervision over local budget making. One is to pro- vide for local supervision of all budgets, taking the county as the xinit, aad the other is to give the proposed state tax commission this authority. Under the former plan an ex officio budget commission could be set up, composed either of the county commissioners, of a locally chosen budget com- m.ission for the county, or of a group of local officials such as the chairman of the board of county commissioners, the mayor of the largest city in the county, and the president .001 aJbiw sxfd' to aausoscf bna ,)£9aoin Lneqa bna aaxs* "^vel od- Y^i e-J-oxTJ-aib sasxU doirivf BaoiSonul baa aolJ-ivx^o^j to x^^tsiarib ,no Tci-^so Isool ni araiotsT Y'^^^^i'^iJ^^'^'? suoxi.:;v 91b oioxfT si loi^aoo aeqoiq r. "ii aldstJLssb t^isv sis rioirivr asoff.^nxl qioe: 9di ancniA. .asonanx'i oasrl^ navo bsriailcTcvas acf o* artoliiau r> ,xb3'\c Isoaxl imolinx; b qib saodi lo irrsJ-noq-Tix -nooai B bna ,ed"oxid-axb IxjooI Il£ lol s^-t^nJ^oo^s ^c ms^taTja -eoq lOVdiedVT sioitislb doiss lo noxd-Bblloenoo bna aoiiouiia -isqua d'sabjjcf lo -^Laai edi Ac^ilqiuxs IIlw aqsJ-a oaerIT ,oI(iia .jfasJ- cMjjoxH ib visv s cxh^aot Iliw Jx Ji:;a' ,-^Liaei:2, noxaiv irisioriailcfBd-BS oxij lol seriiaa-ioils owo 913 oisriT -oiq 0* al 9n0 ,3nl:I.sni i'sabx/cf leool ioyo noxaxvisque "io ^Jtiuoo sdt 3nx>l£d- .ad'ssbxrcf 11^ "io noxaxvTsqua IbooI lot 9blv oiata beaoqoiq edi avig oi ai ladio 3di oeui ,ilais sxiJ^ aa ci8 «Blq leixiol sJid" labnU ,x*iiorI:t/ji3 axxi;t noxaaxriiinoo xa:)' isdiia baaoqraoo ,qxr J-sa ocf bluoo noiaaxiTintoo ^o^bucf oloil'io X9 -moo ta'^bud naaoiio AjIIijoox ^ I0 .aianoxBax.timoo ^^Tnuoo arlj- lo alBioxI'io Isool "io qwois j3 lo lo .y^hjjoo oifd" 10?: noiaaiia ,3i&nox38xrnciioo '^i-nroo "io b-xsoc! exl* lo osmifixfo axld^ as rfoxrs J-nabiasiq edi baa ,^^nuoo odi ni ^■^-i'-t- Jasgi^ srid' "io 'xo\:bci 3iiJ" 101. of the most populous school district in the county. Such a budget commission could pass upon the budgets of all local spending districts, but it would be necessary to de- fine and limit its power carefully in order to avoid local opposition to the v;hole plan. It would be wise, no doubt, to provide, under proper conditions, an appeal from the local budget commission to the proposed state tax commission, whose findings should be final. The other plan whereby all local budgets would be sent directly to the state tax commission for approval, v;ould increase tremendously the burden upon this body, but it v/ould have the merit of providing the means of a compa.r- ative study of expenditures in different districts for dif- ferent purposes, and of a more intelligent supervision of these outlays over the state. The latter result could perhaps be accomplished if the commission were given ade- quate supervision and control over the work of the local budget commissions, together with the right to entertain appeals from the rulings of the latter. The subject of local budgetary control is so vast and so difficult that it will require many years of experience for its full ree,lization. No state has at present .101 ,^C&nuoo 9£LJ- nJ: iolx&elb loonoa auolisq^oq usom artl lo Lis to aie^bud sxlo noqw aesq tXiJoo noiaslcauoo d-s^Ljjcf a iIoi;8 -oh oJ" ^CT^3s909n 9cf bluov ti iu6 ^aiolttetb anlbnaaB IfiooX l£OoI ibiovs oJ' ioi)io nx X-i^Luloiso -iswoq aJ-l JlraJtl bnn 2:1^^ .ctcfuoi) on ,S3J:w scf LIjjov,' J'I .n^Iq alcrlv/ adi oi noxcMaoqqo srid" moTl Ix5sqq,c n.f3 ,3rioiJ'ii)noo loqctiq lobnw .sbivo'xo; oJ ,«olaaJ:;aiioo xjsd" ei-Bd-a bseoqoiq arid' o:t rtoxaaxiaaioo ;t93.b;jcf L^ool ♦ Isnil 9cf blxfoifa asnxbnxl eaociv blisorr aie^bisd L&ool LIb xi^eiodvr fisXq teriio adT ,IsYO'xqqii 'xo'i noxacLTu-aoo xbj aJ-^ia sriJ' oi \,S.t03ttb tnae scf d-jjcf ,^:£>ocl aii_';t noqiJ n9i)'iija'' 'sxli' x^auobnst^ii ea^s'ioai. blsjow -i.oqiaoo B "io snasm srii- snibivoiq "io i'iisiK odi 9vbx1 I)Ix/ov.- d^i -Ix.o lot ad-ox'xd-exx) Jns-io'iiib ni: aoi;jti:J-5noq:c9 Tto \:i)UJa avxJ'n "io nox3Xvi9qua JTi93JtIl9cfni oioic s to bnjs ,a9aoqiJjq tnsi^l bliJQO ilueo't loi&sL sxiT »3iBia edi lovo e.-^L^uo oesdi -obc n9VX'e, 919T7 noiaaxrtttsoo edt 1i b&daJLLzaioooe aJ aqiixliac Isool 3di lo :fTow 9riJ i9vo Ioii"noo .bn-s noxaivisqua aJ-sup citai^otno oi id'Qlt Qdi rf^iw tedto^oi .enoxaexnucoo io-^bud .'xsitsl sxict lo asnxIxTi and- raoTit aXja^qqa oa ai XoiJ-floo ^C'^B*9^i>iJcf lisooX 10 dooQcfx/a 9xiT "io 31.S9Y xnsci Qtiispoi XXxw ^i d-^rlJ- i luo iVl tb oe £)«b J-asv Jn930iq is asd 3i3ta oil .nocd'iisiX.'so'i XXi/l 2oi lot gonsi'xoqx? 102. a satisfactory method of dealing v/ith the problem. It is very essential that local putlic opinion be actively en- listed in support of any plan that may be undertaken, and we recommend as a beginning the introduction of the prelim- inary means which ve have outlined, such as the uniform fiscal year, the uniform system of accounting to be pre- scribed by the proposed state tax commission, or the depart- ment of efficiency, and the consolidation of local districts wherever possible. These steps will produce economies in loca,l expenditures which will make the introduction of more effective budgetarji' control easier, and the results more lasting and satisfactory, 2. THE TAXATION OF MOTOR \T.HICLES ; The subject of motor vehicle taxation has come very rapidly into prominence v;-ith the growth in the number of such vehicles in general use throughout the state. There are three aspects from v;hich the problem must be viewed. The first is the taxation of the automobile as personal property; the second is the license tax on the privilege of driving a motor vehicle over the public high- ways; and the third is the use of the motor vehicle on the • SOI -no ^lavid'oa 9cf noinigo oila'uq Ij^ooI tBxi.t lijxtnsaaa -^iiav £)ns ,ns^cri9l)nx; 9c[ ^exn cfarfJ" rtBlq •^rus lo iioqqx/s ni beiatL -milQ-zq edt lo no tioubciizu sdiJ- anxnnxsscT J3 as I)n3ra:ioo9i 9w molinu srii' 34.^ xloua ^bonil^^sjo srsA ew rfoxiiw ariGSm x'i&ai -srtq 3cf 0^ ^niJ-niToooB lo mstex^ molinu odi- .i^sa^ IsoalJ. -ttsaob 6ri^ 10 ,noi33iiriiiioo ::s- air^ia Loaoqoiq aild" \;;cf bediios atolrtath Isool lo noitobiloanoo Qdi bns .^^onaioille lo i-nsni aslaxonooa aoufioiq IIi''.7 aqsJ'a aaaxiT .alcfinaoq isvsisriw lo noic)-ojLrx)OiJ"nJt ©Jld" 9:isra Xliw rfoirfw eoitrd-il^nsqxs IjgdoI nt a^Iuas'x eiid- £)ns .isiesa IoiJ"noo ^£;1sd■^3I)ua sviJ-odlls oiom ♦ '<;ioJ"oj3l3x;tBs bna anxJ-ajcI 0101a 1.0 ;ioir;jCAT ^-:t . 3 ; s:ejdikj::y goTOAi dmoo a.sri noxd"£;xB;t aloxxlsr loJoin lo ios'idsja srCT lacfnun ad^ al d&yroT odi rlJiv/ aonsnliaoiq oini. ^Ihiqsi i^iav .oJ-3ia ariJ- iuoi^^uoidi 9sjj I/insnsa ni aalolriav doua lo scf ^simi malcfoiq odi doid-'fi moil a^ooqe.3 soixiJ- oi.s 8i9x£T aa DlxcfoaoJ-JJs 9f£;t lo noid-^xsJ- grid" ai i-aill 9rfT ,I)av/9lv grid" no xsd" eaciooll sdi ai i)noo93 ouj- ;-id-rsqoiq Isnoaisq -ffaxjci olIcfJLfq grid- levo oLotdsv loiota b gnivxib lo saalxvJtiq sxid- no aloxrldv lod-oDi odi lo 9ax; 9ilJ- ai inixfJ- sxli' bns ;3>:sw 103. highv/ays in the transportation of persons and freight for hire. Taxation of Automo "biles as Personal Property ; The state constitution requires the taxation, according to value, of all property other than that the exemption of which is constitutionally authorized. It is necessary, therefore, to continue the tsocation of motor vehicles as personal property. The automobile "being sub- ject to universal inspection and always where it can be seen, one would suppose there should be no evasion of the personal property tax. We have learned in our investigations that this is far from the truth. For tvra reasons at least it is possible for a considerable percentage of the auto- mobiles in the state to escape taxation altogether, Pirst, the fact that all property is required by statute to be listed and assessed between the first and the fifteenth of Llarch, It is easy for the owner of an automobile to secrete it during these fev/ days and the as- sessment records indicate that this is a rather common practice. We have found also that importers of new cc^xs malce a practice of taking orders for automobiles in advance of the first day of llarch, but never promise delivery unless .SOI ^ i vioiacroil , iBnoeisI aa eelidoxaoduA to nol^axsT ,noxi;5XBj- erCJ- eeilsjpo'X aoi.i'fJilfanoo aisia sriT ;M .I)osJ:Torfi'JL/'.s T^IIsnoiJ-^tid'anoo al doirfw ^o aolizmaxo ioJ"om lo noijsx.scf sriJ auzxt&aoo oJ" ,sao'i6ioriJ' .^saesosn el -cfwa anisd" 9licl"oao*Ui5 exfT .Y^isqoiq Isncaisq ajs aaloiriar 3d" fiBO tl sTsrfw a^jswlB bn/> noxlosqeni JDsa'isvin;-,' oi' d"09(, srfJ- "io noi3£!V9 on ad" blucrfa oisrld" oaoqc^ija £»Iuow sno ,n9oa anoid-.csxd-asvnjt itso nl. benisel svsd 3\! .xbJ' xiteqoiq Isnoaiaq i'assi d-s anoas^et owt lo*!! .xlJwxci- 3i£d- moil: zsl si aMi ir.dt -olUB dcii lo 93J3*n9oi9q oldsisblsnoo .o lo't alaieaoq ax ^tx , 19x11930 J" Ij3 noilfixsl 9qj3oa9 ol slfita sxll xii aalxdom 69'iii;pc)i aJt ^ligqoTq ILb l^iid" los^ sril .laixT i)ns laixl •prfl ngawlscf baassea^ brr- ''--^■sail sd" cl 9ljjl;3d'3 y^' xis ^0 12X17/0 9x11 10^ ^aB9 Bx II .dotslZ lo di^isoitil 9X11 -as 9x11 bna ay^b -.791 9e9xll gniiub li 9l9i093 ol 9j[xd"oxiiolx;B nomnoo laritat z ei eMl Ijsril alisoibiti abiooai Inamaaos ai^o TTsn "^io a'xaliociul laxll oeXii bnuol avsd aW .aoxlosiq sonsvbB nl 3 9litfo2iolx;<3 lol: aiablo ^nijLBl lo aoxloBiq s 9:fBn aaalnjj y/iQ-vlLab aaimoiq i9V9n iud ,xloisir Jo^^b iein uixfl lo 104. they happen to have the cars on the floor or know that they ca.n he delivered directly to the individual without suh- Jecting the firm to the tax. This means that the great bulk of the nev7 automohiles coming into the state arrive here subsequent to the first day of March, naturally a ca,r purchased after that date does not pay any personal property tax. Second, as the la,w has stood for many years, the exemption of $300 to the head of a. household has not been confined to household goods. We have recommended herein that this be changed and that the exemption be declared to be upon peYsbnal property consisting of household goods and personal apparel. At present this provision is the means of exempting a. large number of automobiles, since those persons who own no household goods may use the $300 exemption for the purpose of exem::ting their automobiles. In 1921 the average assessed value of automobiles and auto trucks was only ^27 6.48. Vie believe that this is a sit- uation which was not contemplated by the legislature in enacting the personal property exemption. We are satisfied that there was never any intention to protect by a tax ex- emt)tion an instrument of commercial use such as the automobile. .^01 ^erid- isicit wonal 10 rooll sd^ no ai-eo arid- avrA oi naqqarf ^srld' I3913 or! 3- }Bdi ensam aJtrlT .xs;f 9x1^- ot Bitll odt anlcfoai, sviixa aiBta erli^ oi'ni aniiaoo aaliu'oraoi'iJa v/sn srld" to :£Ii;cf \;IlBrtJj*i3Tl .xIoxbM to ^eb osixl: sii^ 0* inesjpetodus otod iBaoeioc x^^ X^Z ^^^ asoib eisb i:idt lotts boP.Bdo'zuq^ ^^•so s sdi ,ai.'^c-v y;ni^nt loT: Lood"3 a-^if W3l srfJ' s.'S ,bnooQ?, need ton aisri Iilorlsauoxl iz I0 bsed odi ot 00S$ I0 noxJ-qmoxs «i9i9x£ l)9i)n9-icioodi evBd. o^l .3^)003 £)Xoxi9euoxI od' benltnoo oi' i)9'iel09i) stf noxd'qin9X9 sdt d-Grld- hn^; f)9snBxf.o 9cf Kxr{.t i'.'^ff.t sl)oos iiloxloajjoxl lo gnioaianco -^j-iaijoiq Ii3no2i3q noqx; 3cf edi ax noiaivoiq alxfd' J"n9a9iq iA .Xgaaqqa Ixjaoa^gq i)nx3 9oni:a ,a9licfofiio*as lo iQcfriirn s^isl s 3itid'qn9X9 lo anagin OOSv gxiJ- 9si; y--^"'- alJooQ I>Xor£92Uoxi o« nwo oxfw enoansq aaoxfd' .asIxcfomoJixis 'XxgxfcJ- 3ni«..ra9:c9 lo gsoqixrq srlJ- lol noi^qx[i9X9 oi"Ui3 bris 89 1 id omo J" iijs 'to sxxisv £>9a393SB 93art9vs 9x1* XSSI nl -ita jz 2X sill* &Bdi avoilod sV/ .Si'.dVS'; ^:X^o asw a?lo0ij' rci 91UjbX!2X39X 9xLt y^d bd isilq^aa inoo ton bbw xloxiir; aoio::iU batletSsa eisi sW .noJ:d'qni9X9 ^d-isqoiq laacazaq edi ^niJ-oBne -X9 :c3J' a Y<^ ;to'-jJ'0'iq oi noxd"xtacni: ^^s 'ig-^-'sn asw O'isdi tcdj ,9Xxtfoxn;oiu5 gxfd" sis xfoua 9a;/ Xfixo-xgnaaoo lo ^nsnixxioanx n.3 nctJ^ras 105. We believe further that the surest and safest way to tax automobiles effectively is to collect the license fee and the personal property tax at the same time. This can be done without changing our constitution since it involves only the manner of collecting the tax and does not affect the uniformity of the tax. The contention is advanced by some interests that the automobile is now paying more than its share of the taxes. With restriction of the personal property exemption and the establishment of a strong centralized state tax commission with power to compel the full and equal assess- ment of all property of rvery nature by the local assessor, the tax burden will be equally distributed to all classes of property. We are referring here to the taxation of property for the support of governmental functions, and not to the tax voted by the people or the legislature for building highv/ays. It is entirely proper that an additional tax should be placed upon an article of personal property which is itself the cause or the medi^lm through which the highway may be built. The modern permanent, loard-surfaced highway has been largely the result of the demands of the .eoi x)xis 39l aansoxX &di Joalloo 0* ai -^Idvxj osl'ta bq L id o::ioi ua 9cf rxso exriT .ar.iid' oiosa ariJ' i'.e XBd" ^Jiocroiq Isrsosisq srid' aa/Xovni i'i sonxa noliuiiiscioo luo snJtaxisxIo d■i;oil^x^y snob d'os'ils o'-oa asob iifiii xe- ecii ^uiioeLLoo 'tc trc^nneiii oxlJ- ^Ino tGdi aJs9i9d"ni oaoa T^cf baowirbB si noliasinoo sriT sriJ- lo 9:££rxa acfx narld" a 10x11 ani^so; won ax eXlo'CfiOoU/s srlJ- noi&qvzoK9 \tieqoiq Ii?noa'i9q ori:^ lo nQi^oiiiaoi titVfl .aexscf XBd" oj'.3;fa h&silB'iineo -^cioiS?. s lo J'nsoriaili.od'aa odi bn.?. -eaaeae Xaupa bits Ilifl sxi* Isqiuco od- lav/oq li^txw nox3.?xf;sr:oo ,ioaa923J=! Ij30oI oxCcJ' y(i 9i^:iRa viov» lo -^i^tiaqoiq LLn lo tttssi 893a;3lo llB oi b9i uoi iii bIL ^illsupo 9om sxiT .i'lxud od i^isni \;r,v;rf3ixl edt lo abnsnisb arlJ' lo iLuso't cdi -^jlssiel noad" as,d Y'SwrCgxxf 106. automobile owners. Indeed, without tiie automobile this type of highway vrould still be regarded as an unwarranted extravagance. These roads are in such a peculiar degree for the use and enjoyment of the autoists as a class, that special taxation of these vehicles for highway purposes is entirely justifiable. We recognize that in another sense the entire public benefits from these improved highways, and all taxpayers are now meeting the obligation herein implied through the payment of the general tax levies for road pur- poses. The automobile as a form of personal property should contribute to this purpose, and our recommendation for the collection of the property tax oA motor vehicles is designed to insure a better distribution of the property tax to all owners of such property. License Taxes on Automobiles ; The case for the taxation of the automobile in a special manner in order to provide and maintain the type of highway required for modern motor transportation has already been stated. We have considered the scale of license fees now imposed on automobiles and motor trucks and have decided to make no recomiiiend£.tion looking to a modification of these rates. .dOI botn&i'isvrnis na a& JbaJbi^s^i 9<^ II 1*8 £>Iuo\Tr x;.3wr{3lri "io 9qx^ 99139b lailjjoaq s lioija ni 01.0 ab^oi osailT .sonaaavsii-xs i'sxiJ ,88510 J3 83 oietoius sri* lo i^nani^OGno bas Qeu srit 10^ o93oq'x'x/q 'ZBvniQld 'zo'i aaLoiriav aaaxi^t Io nox^axa* Isiosqa ,9lcfBl'ixd-?.xjt "^Isii^no ai eiitno arid- aansn n-nJonB ni Audi 9sin3009i o\7 IIx: Jbxis ,sv;^wri3ixf i)9voiqnLt aasiii- cioil aJilsnscf ollcfuq i)9ilqini ala-sgd noiJj3axIcro 9r£i' sni^gaia won 9Tj8 3i9\!;sqxsJ' -ijjc b&oi lot 39i\-9l xsd" Isienss srii Io d^nsniYBq 9Xi* rfgyoTrlj blisoria y^tieqatc ianosieq Io orio^ b as al J: cTomoJi/JS orfT .390oq erli IO*- noi;Jcbn9.-:iinoo9'i luo bn.3 ,9soqTCJjq aldi o& siwdiiinoo b9itsi.30b 3t coloxilsv toioin no xbo •yci'ioqoia arii "io noiJo9lIoo 11b 0? x&i x,itoqoiz sri* Io notiuotziaib isti^d b eiuenl 0* .''liisqoiq xious Io aianwo rea lxcfoao^jjA no a9:c£'r 9gn9oiJ nx alxcfomoJ'UB 9ri* Io aoii.zxBi odi loJ 93:30 sriT 9u* niijJ-nxsffi bns abivonq oi rtabio at lecinsta. IsLosqa jb noxusJ"'xoqaiicTi^ iod"c0\ nngbom lol f)3a:xup9T \jfiwrfsxri Io 9q'\c* 9lj808 9di botebianoo evBd 9\~ .bsisia need ^c^&^1l3 asd a:iouti loioiz. ba2 BSlidoiaoius no basoqiiix rron 6991 eaasoil "io B oi anijxool noi:J'.fsi)n9:araoo9'r on s^isiii oi b&btosb evBsL baB .a9d'£i gcsxij "io noxJsoxIxboia 107. The Autoao'bile as a PuTjIIc Utility ; The development of any new coiaraunity, territory or country depends on transportation for its present ex- istence, its future, and its continued prosperity. Trans- portation is the backbone of all activity; without it prog- ress must stop. When the northwest was first thought of as a possible empire, men with brains conceived the plan of building cross-continental railroads into the heart of what was then an unknown country. The project included the State of Washington. The federal government, realizing the necessity for railroad communication and transportation, granted both the ITorthern Pacific and the Southern Pacific railroads vast tracts of land to create a value upon which the promoters might erect a financial structure. Capital was secured and the railroads were built. The great north- west came rapidly into possession of its natural resources and soon made itself felt in the Union, Automobile transportation began in a small way. Individual owners of automobiles carried passengers for hire. Individual owners of trucks hauled freight by the ton over the highways built at public expense, until at the present time we are building highv^ays with the general .vol ■^lodJiii&u ,^ifinWiiir::oo v/sn ^^n.^ lo cfneniqoIeveL 34? -axxGiT .vcMiaqaoiq isoiiniJ-noo sii Jane ,sii;d"0^ si i. ttioneioi. -gonq d-i dijoit^ivr ;\iLvi:io£, IXb "io 9r.od:foi5cf arlj- si noxde^noq .qoi'3 d"ajjjm sasi iO HBlq oxiJ i)9visonoo ani.cacf xitfiw nscf ,a::xqma 9Xcfi2aoq J-jBxiw "io d-i^'f'ri oiIJ oittl abcallBi Isd-nenicfnoo-seoao sniiiliya SiicJ- b&buloai cToocoiq sxlT .\;i*fjJJoo nwor::Inu n.c5 norlJ' e^.w 3nisJ:Ii59n .d-nscinusvog Isiebel eriT ,noc)"3Xiir{ajs\/ lo eiecfS ,e.Qii:^£iiocanB's.i bns ncii-£Oxni;ficioo ^■•ijotclisi lol -^d-ieesosn sriJ- doidv noqts oulev s eiBoio oJ" ijnal "io eJ"0J5i;f iasr ebsoill&i IfiJ-xqsO .eiwJ-ouic^s IjoXonsnXi .s i-osis c^^fs■tcr eisJ'omo'ic' srIcJ- -r£^ion i-£si3 sx£T .:flj:u'i sisv absGili^'i odi' bita bsiijooc sbw a9Oi0oa6T Ij3ajJd'£.n scfx xo rtoieegeGoq oiai. vl^xgci sulbc J-asv; .noxnU iidi nx ctlol "itlsa^fj: eijjsjc: nooa Jbn£ ,VBV/ Heme £ nJL aBS9cf noxj.ec)-'j;oqaneic^ sIxcfoino^jjA io"! arjosnoee^q bsiiiBO aolxcfocioJJJe lo aiocnro l^ubivibnl 9di --icf drijixsi'i belie^ri ajtoui^t lo eisnwo lJ3i.'i>Jtvxi)nI .©'^xii is IxJnjj ,9eneqxs oilcfijq c^x-; iliua a^r^wrfeiri arlJ- ie\-c rroi l£ion9£ oxicf xid-i\7 a^i^v/xiaxri snxiliucf sie 9y^ entiJ ctngagiq arid' 108. tax money, twelve per cent of which comes from the rail- roads as a separate class of property. \7e are paralleling the railroad rights of way with the finest paved roads in America. These roads are now being tied up by exclusive franchise to bus companies which operate at regular inter- vals, between termini under statutory regulation under what is Icnown as the certificate of necessity, found in an act entitled "Transportation by I-Iotor Vehicles", being Chapter 11 of the Laws of 1920-21, at page 338. After the certificate of necessity is once secured b^'- an automobile transportation company, it cannot be re- voked except by action of the state and no other competing concern can use that particular higlaway so long as this franchise remains in existence. If the patrons along the highway become dissatisfied with the service they make com- plaint to the public service commission wliich in turn grants a hearing and determines v/hether or not the company owning the franchise shall operate more equipment, and when the order is so issued it shall be complied with, and in case of failure to comply the franchise is annulled. This in- cludes the hauling of passengers as well as the hauling of freight. .801 -Ixci stLi taoil aacnoo rloirlv.' Ic inso isq erLowt ^•'^er.oin x^i aniloilBi^q eoG 9V,' .^^cJ-xocfOiq "io aaelo o^si^qoc jb a*-, ebsoi. ai. cteo'j f)sv/5q vasni'r srid" xid-iw ■^j^r *io edrlgii bBOzlts)i eAi 9vi3XJlo::9 x"' cu boii' snxod won oie abfioi seorIT .coiisniA -noifti o:f>IU59*i J-jg ©j-Bisqo xfoirivr saxnBqffioo aucf o^ ftalrfoniial d-Bxiv; lobnu fTOJ::f£ilJt;:jei ^ioJi/d"JsJ3 ishtiv Ininie* neewd-ycf el£5v d-os n3 Ki bnuol: ,^ii xasaoon 'io sd'BOx'ix.t-xao yrlJ- ec nworof ex isd-qsdO giiiad ."eeloxxlsV 'xo^foi; '^cf noitsiiioqenBtT" bslitine .&CS Qssq Jb ,IS-OSex to awBj sri* "io IX i)9iuo98 scf.'c ex ^*Jt3C909n lo ©jsoi'txci'iao arli isd-TcA -91 9cf j-orrnBO J-1 .^infiqciro noxJeiticqarusiJ sXidoctod-x/.D n^ ^cf j}ni:Joqctoo a 'rito en bns sjbjb erli "io notion ^cf d-qsoxe b9>fov exrld' ec LftoX os ^fiTvAiSiXxI ■XBlrox^Jisr tsd* sau nso nioonoo ariJ- gnoXe anoiJsq sxld- 11 .©onsd-sjfcxo nl arfxfsnisi sexxfonsil -laoo siifin TjgrI* soxvtise ^xI:^ xij-iw bsxlei^saaxi) skioosc' ^ewrrrjiri e;tasi3 nrri;- nl doxi^Mj noissxirKcci aox-risa oxXcfuq sxij- ci intBlq giiimvo T^rusqwoo arid- uon no i&i{d"9flr aonirsiifvitei) iDns sni^jssrf b ext;!' nsxfvz Ani; ,tne!iiqiuj^o otoa eJBtrsqo Il^ria ©eixioftenl edt 93B0 ni i)xt3 .xioXT/ bsxlqctoo &cf XXP.JL8 ;ti: jbexraci oe at tebto -nx eiilT ,bQLLunn£ ei aaxrlonBil edi ^iXgraoo oi otvltBl 'to gniXjjBXt 9x1:^ ax: XXav; sb atosne esBq io aniltrBxI oxtd" aoijulo • c^xigxo'il: '^o 109. For the passenger franchise there is paid the insignificant sura of ^10 for each car having a capacity of not more than eight seats; for each seat in excess of that number the license fee is increased 50 cents. The freight haul automobile pays |10 if that sura is in excess of the establisheid wheel base weight license. As stated above, the highways of the state are built frora the public funds and the roads are supposedly built for the general use of the public. Under the pres- ent system were an individual desirous of buying a truck and operating a freight route or a passenger route on a highway in this state, the road is closed to him if someone has already made application for the franchise. This means that the public has already gone so far as prac- tically to build and maintain what corresvjonds to the rail- road bed and right of way of a railroad, and it is done in part at the expense of the railroad. In addition to the loss of traffic by the rail- road companies, Washington is losing in taxation thousands of dollars each year by reason of the constant reduction of value of railroad property. This can be met by the imposition of a franchise tax upon the gross earnings of .eoi arlJ- bl.B.q si eiori& eeiricnsi'^ losneaef.q dfJ lolI Y^tiosqjso B gnivari xco rioirio toI OT^-^ 'lo rare ctrLBOJfilrrp.ianl T:o 33907:0 nx J-soe rio^o tol [aisoa itigie ns^di siom J- en lo 9riT .atnoo Od f)03£9ionJt ai aal sansoil srfct iscfnun t^s'J eaeox© ni pI rrijja ^s;£i;^ "tl 01% exfici slidoKo^u^ Iwjsrl ^risioil .eanocil i-risisv; ea^a Leeiiv beiiBxldRioo edi "io ens sJ-^J-a ari* lo a\;£v;xl3xx{ srlc^ ,svocfB I)sd'£Ja bA •\ilJb98oqqi;3 aifi eb&oz edi bna ebtHJl oilcfuq odi dOil *IiJJcr -asiq arlJ- lobnU .oilcfug axfJ- lo sau L^ieno^ -rlJ- lol JIxM :foi;id- B gnxAi^cf lo Biroiiael) lBJji)JtvxI)ni r.3 o'xsw xusJ-aYS *n9 no e&uoi lej^neasfiq jc id »d-i;oi ;Jriai9i'i b s^i:^.'21^qo i)flB Ix aid oJ isaoXo ai i)Boi edi .sJBd-e exif^T nx -^v/xiVJir' a ,eai.donsi1 odt -xol: noltBOlIqqs oJbBci y-E«531-C^ sfri snosinoe -oxiiq as i3t 03 drrnj; v.£>Bsnl6 e:zA oilcfuq 9x1* cfjsxri' anBem slrfT -lisn eriJ- cJ- aLr.ooc ■-> xioo J-.^xiw ni£d-nXBi;i bns MiL'cT cd- '^llzcii nx 9no£) ai d-i: Ms .Lsoilxsi s lo Y-ew lo id^Qir bm bed fcsoi .^BoiIiB'x odt lo oangqxa SiiJ- cJ'b J'nsq -IXBi orlJ- Y'^ ox'-lBiJ- lo aaol axid" od- n:;xlJti)j^s nl ebneajJ-orW tioi^BXBi nJt sr^xsol ai nod-saxrlesT/ .aeinBqrfroo Ijbot: nolJ-0JJi)9i J-OBd'enoo sxld lo xioasoi Y^f ib9Y rIo£9 a'XBlIoi) lo arid- x^ *9C'- s-cf r.'jBO yixlT ,Yd'i9qo'iq JbBonlxsi lo sulsr lo lo agninxes aaoig srfd noqu z'j;^ sairlonsnl s lo noxd'iacqni no. auto transportation companies, both freight and passenger, as additional compensation for the exclusive privilege of using these rights of way. It is estimated that in 1920, a year when the business was only in its infancy, the bus business produced two million dollars of gross revenue. A five per cent tax on this volume of earnings would pro- duce a revenue of $100,000 annually. In this connection the coraments made by the Colorado Public Utilities Commission in defining "public convenience and necessity" as this expression is used in the law providing for the grant of motor bus franchises, *" should be noted. It was found that in two counties, in which sixty-eight motor trucks were operating as common carriers over the public highways, the total paid by these vehicles for the use of the roads was $819, The Texas and Rio Grande Western Railroad paid $38,023 in these counties for highway purposes and other taxes whicli brought the total to $153,396. The Commission said: "Public convenience and necessity, by which must be understood the convenience and necessity of the people at large as contradistinguished from the convenience and necessity of a very small number of persons who seek to derive a profit from tha farmers' and home owners' investment in the roads, never contemplated that the truck driver .oil .•xo^nseeeq bn£: J-xisioil diod , soiriisqcioci acii^i'toqsnB'ii oiiJS to sssXxvxiq eviewIo"0 edi ict noileenoqfiico l£nox;ti£)i3B a« ,0201 fti cfiir:^- i>9Jemid-a3 ex il .xb^ "io a^risli oasrl* snxeu eij-a jrid- ,-^oa;.;'inx SoX ni \:Inc saw sssniaijcf otii nsrlvr ibs^^ e .9x;rievo'i neois to az^llob . nctlltm ovii Jbeowhoiq aasnxoud -oiq ijljj'cv; esnxnttj:© "io aaxrXov ai^.c^ no x£j c^nso tioo^ svxi A .X^lBunnj:^ COO,COI0 lo ojjnsvsi a sojjL srit "^^cf 3i)£Li aJnan'iCioo sx-d" noxloennoo exrl^ nl oxlcfuq* sninxloL ni ftolaexiranoO aelikLliV oxiducr of)jsiolo0 ni I)9ax; ax noJtaesiqxs p.irlj as "\;*-t2390sn Lxie oofisxnsvnco ,3 9exx{oxi3a'i aucf ioJ'o.ti lo ^tncag exlct -rol gnihivoiq wx;I srfj- nl ,a9id"nxjoo or-J' ni J-jsrli- Jbcuo'i s^w a I .bston ocf i)Iucrie ncranoo a£ s*'^-c^-2i9qo sisv/ ailoxri* louori c^xiVls-vcfxir. x£oir£ir seorlJ- \;o" Msq Ifi^toJ^ edi , 8\:£iv;risxrf oxlcfuq arid' le^-o aieiizzo ar.xoT arIT .6164^ sjsw aJb^oi qxIJ- 1:o sax; arli ao"! esloxriov saorli- nx £S0,6S$ bl&q bsoiltsP. iiisdeeW aiir-p-yri oiH has tii:SUOid lioirkr aszzBi tedio bn^ asEoqiuq \B7rd^J:d lol asxJ-nxfco :biia& noxaalraaioO sxiT ,668,5511 oi IjdJ-oJ- orlJ- xioiiif; \:d' .■^d'isasoan bi^.r^ sonsinsvnoo oxIcfuIoxji* exit i'coo sflj oJ noxJ-ioqoiq sxjI) etd ©drcfii.^nco Ilsric , a\;i^v/rlj5i;r£ nixo "io oon.snsJ'nxxjfu bnis noi^ou'id'anoo "io jiBgai noiasiincioo airid' aso .narii '^Ino fine ,nerlt ,anoJ:;JoJ:n3'5 9i i3n,o anoijii'^noo isqoiq i9i)ni; ,08iJ bIaI oilcfwq svianoqxQ ■^lex/ci^nsaisid- i>nB Jjstjig b lo J-xlensd Isups brie ^^xngxi) Ici/ps Ic ee '^J'ilxoB'i ^(S looisrli- est; .-. i-eiebor:: crij aJlw alqooq srid" 0^ noJ'om lexoiei.aoo sniJ'XiIi;ss*i "^lo ijoxloq sctfi^a oxiT -esnq J-A .bsqoIsTob Y-Ced"sIcxnoo J'orr el noi^iscfioqeKJS'iJ- Yino noxioxbaliuc, IIx;! arri asliow oxlcfirrr lo brrcocf c-.d* Jens lOx ssexxlon^'i'i »vxauIoxe svexi xic;xx-.v/ Eniooncc seo.rur aovo avis 0^ Jbsbnsas acf Mi/oife vbI edl .ebuoi sxfJ- lo aeu aiii bn£ ennsonoo lie isro ^;tX':orictir£ si-slqnoo jn3a'.d-ieq9i) axrid' I.sxo'xoiiiioc lOx a\;x;wr{3xxl oxio'xfq orlo oat; oxTv; elcL'bivibai i>sdTti3'i3 nosd aBd aaiilonsil dviavloxo njs isxfJ-silw .aaaoq-wq -91 9w ,n9:i£.t nssrf esxi qoJ-a 9vxJ"Blxr2^9i axrfJ nsxTr .d-on 10 ^oiS 9x1* norw ijaaocmx Qcf cJ-nso isq evil "^^ -ai a JarlJ- bnarjEoo ••acu:>ii edi nx srxgxsgns anisonoo ic exioaisq IIb lo egnxni;:© id;^lBzt 10 aieanseaeq lo a-'^f^vrrfgixl cilcfx/q gxlj- lovo nold-Bd-icq d"f. d'ooll 00 blisoda sisii^s ....: ,9mxd"nseri odt nl .aiixi 10I iBioiorjaoc -xol 3\;b^xIsxx£ 3d& gniaw asoriJ- moil rfetrona ie£.ol donzid eidi lo d-aoo svid£;idsxfixxai)£ 9xlo i9voo oi agaoqiuc 112. of the department of public works. This cost amounts to about ,$100,000 annually and the yield of the present scale of fees is only ^20,000 to $25,000 per year. We reconimend an immediate advance of these fees to a level that will make this branch of the department self-sustaining and the subsequent introduction of a gross earnings tax when the state has assumed full jurisdiction over all who use the highways for commercial purposes. Hi|ghway Tribunal ; We desire also to call attention to another fea- ture of the highway abuse. The auto freight transport- ation companies are continually hauling loads in excess of the carrying power of the roads. The highways are now provided v/ith a police patrol, but in every case of violation of the highway laws and regulations the offender is brought before a justice of the peace for trial and the punisliment meted out by these tribunals makes the highway regulation a farce. A separate tribunal under the jurisdiction and control of the highway department is possible as a means of curing this evil. In Hew Jersey this plan is in operation and we are advised that it works successfully. The expenses of maintaining this separate court are more .SIX aJnuorae J-eoo aiilT .Q:}fiovr oilcfuq "io *nsn;f lisq&i) aiiJ- "io ineaa'xci sriJ- "io i^IaiY arfo hr.& x^^^-^^^^ 000,001^. tucds oi 9\V mtS'fiX leq 000,?.S$ o:!" OCC.CSc; y,lno ex Bsel Ic elBoa level B oi Bi>o1 saQtii 1c ooanvh^ 9wfii£)9f.irni ns. bno..s.iooei ;gnif:i£d'8i;8-lle8 tneait'iBqQh adi lo rionsicf eidi sisai Ilxvr J'jarfi xbS egniniso eeorts £ ^o not&ouboZoL:.i. drioupsecfije sxio Jbne oiiw lie 19V0 noi^oiLsxiiiQ IXx.'!: bOimjeajs ssri ocfx^a arid' nsrivr .aaeoqiwq I^ioiomtaoo ^o^ a^Bwr'sirf srfJ sau :l BciLdli 7 v:. swxia.tH -£9x 'xaxid-oxiii o* noliaoitB ll&o oi obIb sixasb sW -*iocfencid- iTfsisrr"i oi-x;,D sriT .sat/ere Y-swrlsI:.: 9ri;f xo ©ix/o to eesoxo nx nbaoi gniluari xHcualinoo six; esxnsrmoo nox;J-£ won sifi avjfnviis-t-f^ &^'? .aJbeorr sflJ- to levoq anxYiiJBO sxld" noxcJ'jsIolv "ic dsjso vt:ov9 ni i'ua ,loiiBq ooxloq jb lid-Jcw i>9x)ivo^Q drlsuoncf ai isbfisllo sriJ" enoxd"5.Iws9T br.B svrsl -^j^twxfsirl srii' lo tnstaslalfMq osxt btis Lsiii lol 90B9q esii to ootieul £ e'soted ncxd-jBlJjggi ^sv/xlsiri srlJ- as.^^xii elcnisdiiij 93 9Xid- ^^cf j-xro bsisru btiB tiotioibetik^l srli lebttn iBnudiii oistisq^e A ,QOiBt a amiGm b bb sXcxeaoq el JnaxncJ-iJGqob \;bwxi3Xx1 exit "io Xoidrroo fix ax ncXq eirfJ ^isaisT. v.'9TI nl .XJ:v9 aidi gnx^cj-ic Io ,\;XlJj"lse©oous eoLtovr ii isdi beet/bs gib 9v; bnB noxd-^ioqo »'xon: 91B j"ixroo sis-.iBoes eidi gnxni^driiaai 'lo asangqjio sriT 113. tlian covered "by the revenue derived from fines. We recoa- mend such a system of highway tribunals in this state in order to protect the public highways fron the abuses now prevalent. If properly protected, the present style of cement road will last indefinitely, but if the present abuses are allowed to continue, these roads will all need to be rebuilt in the near future. 3. REVI5I0IT OF C3RTAI1T LIG^ITSES AITS PSES ; We have pointed out above that the state and counties now collect certain licenses and fees for various purposes. We recoimend the following chajiges in these charges: (a) Corporation Filing Pees ; A flat fee of $25 is now charged for filing the articles of incorporation for any corporation which is or- ganized in the state. V/e have found a system of graduated filing fees is in very general use among the states, and we recommend the introduction of such a plan for tlais state, with the following schedule of fees: Amount of Authorized Capital Sto ck Pee Up to $100, "000 $25.00 $100,000 to $250,000 50.00 250,000 " 500,000 75.00 500,000 "1,000,000 100.00 Por each additional ^100,000 or fraction thereof 100.00 ,111 -aooBi sW .asnll taoil bsYii&b eun^r^i ocii X'^ b9isvoo ctBtli cii. QiF.ie ohij ai. alAnudiiS yfivrd^iti 'to msia^s b rioue Jbnsci won aeaudB siii xaoix a-^cfiwrlgixi nlldx/q srfi- d-osiciq cJ- isLno '10 ©1^*8 d-nsssiq sdi ^beioeio'iq "^Iieqoiq II .^tnsleveiq ineadzq edi li li/d ,^jl9lj:nilsi)i:i: tasi lllv! baa's *n9ir:9o boBii IIj3 lliw aixson seorlj ,9Uff>*noo oi' JbswoII.^ sib eeei-'cTe .siuJ'jjj; i£8rj 9r£;f nl ilxudsi 9cf o^ ■.:'31j ircjB e*B^3 oil* tjsflJ' »vodi3 ;tJjo ijgJnioq svbiI ^V/ lot ao9l £)«£ aeansoil nii^Jiso JosIIoo wort a9i;tnuoo BO^fisrCc aniwollol sdi bnoi-^^oosi 9W .essoqiuq sjj-oxibv ras^asxio 9 a grid' nJt ' 8 39*"^ p.n JfclJtl noiJ' grroqToO ( b ) srTi- snlli'i 'xol ijegisno won al as$ lo 99^ jr.Il A -10 31 rloiriw nox^-Bioquoo A^as lo^ noid'eioqiooni lo asloxcfis bsisubsfs "io ra9Ja^3 s ijnjjol 9vx>rf sT'/ .aJ'Bd'e sxi* ni X)95lns3 f)nB ,sdc}'£i'3 grfi' snoms ssu iB'S.ens^ xt-v ni al ess"! snill'i aJb:.' j- lol n£lq js rloue 1o nol^ouboiScii arli baeivss.oosi 9W ;a99l lo sIuhoi{oa sniwollol bpH r'Jlw ,9i^is b9si.icr'fvk 1c J-nuomA 091 . , . ^lootc: I- gJiggQ 0CTe5^^ OC O", 00 lir OCT qU CO. 05 OCC.OaSi? oi 000,001.*! 00.2? 000,005 * 000,032 CC.OOI 000,000,1" 000,005 0C0,00Iv iBnoiiibtB xfoss lol 00,001 loeiodi ncitosti io 114. (b) Corporation Annual License Tax ; Your conmittee recoEDaends an increase of the an- nual license tax on corporations fron §15 to ^30 per year. This is an annual tax imposed on all corporations for the privilege of doing business in the state. Our tax has always been much less than that imposed by any other state in the West, and the privilege of doing business in the state under the corporate form is certainly worth $30 per year. (c) Filing Fees Char^^ed by County Offices ; 1. Fees Cliarged by County Auditors ;- It has been fif- teen years or more since the legislature has made any attempt to investigate the filing fees now in force in the auditors' offices of this state. These fees were fixed by statute at a time when the cost of operating the auditors' offices was considerably less than it is today, and in addition to tliis the legislature has from year to year placed upon the auditors additional burdens not originally conteiaplated as being part of the duties of the auditor. The theory of the fee is that it is a charge for a special service to the individual, based upon the cost of rendering this service. It is entirely proper that the charge made should fully cover the cost of these services, ,^1£ : :cj3T QQ f.e ptZ iBx/noA. n oxJ'arrogioO ( cf ) ttssx isq OSv 0^ 61$ noil' anoiiBioq'ioo no xed" sansoxl iBun srii' lol snoiit^ioqioo Lis no Lssoqa;! >:bJ" l&L'nas nxj ei eirfT esri XBCf luO .sJeJ-e srlJ- ni rssnleucf aniob lo ©ssliviiq ei'^i'siaii^o ^ns ^cf bsaoqmi ^b^lJ' nexid" assi rloum nsocf a^jstrls axi^ ni Bsanxaxrcf gnxol) xo sgslivliq edi bns ,d-p.oV/ oriJ- ni I9q 0S$ r[.J'Xow ^-Cnxs^i&o ex miol eisioqioo odi lebins ©d'js^a -til: Ksed asxf J- 1 -: aici ihuA vJ'nu pD , \;cr be^-u^iiO eo9l ,1 d'qxnscJ-J'fi T^oB 9l)j3ia e«xi QiuisIai^sS. edt oonis sioiii io aiBQv nasi *4ioJ"xbuj3 orT* ni soio'i ni -vor; as9^ anxli"!: 9rlj eJ-BS^-sSTni od' 9;^jj:fBd-5 ^cc Ds:zi.i s'iov; asCi ssariT .ai-BJ-a axxii- 'io asox'ixo eaoi'ilo 'aiod^iLx/^ sdi snxi'xjnoqo "io d-aoo ar'J" norfw omli s'. tc ci noitibbB nt bm ^x^bof et tJ: nedi as si vicf^iefcianoo ciisw &di noqxj beo^lQ; lasii od' ise-'^ xaoi'i aBii 8'xi.';tj::iex3ei axi^ sidi B£ betBlo^msinoo ^LLsnJ:2>^'^<^ ^on ansfciijcf lBnolJ"xJjI)3 aiod'lbxrjs .no^tihye axfJ- Io asiJuI) oxi.t Io cfisq sniad" lo'i esioxlo £ ax ii icdi ai r.sl nxU Io Y'^o^rTd" axfT d-QOO 9x1^ noqu boestS ^iBUbivlbni Bdi oi soivisa laiosqe e d'Bxfi^ isqoiq ^iIo*Ixd■^9 ax ;1"I .aoxvisa aixi^ ^tiiisbiisr to ,a»oxviea oeQdi Io d-aoo sd* isvoo ^^-^-^^^ fluoric ::x>aai sgian'o srlJ- 115. since the burden must otherv/ise fall upon the general taxpayers. Your committee has discovered that in all of the larger counties the office of auditor is not self- sustaining, due to the growth in the volume of business ajid the expansion of the functions of these offices. The increase in the schedule of fees to a level which will cover the cost of the auditors' offices will mean the elimination of the levy which must now be made to cover the costs of these offices, and will accomplish a saving to the general taxpayer, while it places the burden upon those v/ho make the greatest use of these offices, which is where it rightly belongs. V^e recominend, therefore, that all fees charged by the county auditors of this state for filing of instru- ments, except the fee for issuing marriage licenses, be in- creased fifty per cent, but that no change be made in the marriage license fee, 2. Fees Charged by County Clerks :- The situation in the offices of the county clerks is practically the same as that found in the auditors' offices. The fees were fixed years ago and the legislature lias continually added new duties to the clerk's office until the filing fees of the office do not cover the cost of all the duties ,ZL1 iBisnas odi aoqu LLat asiwiorfdo ieuts. aebivd edi eot'.ts ^0 11& ni. cfjsrW fcaisvooeiJb acsi 9ej;lJ:mnoo iiroY .aio^icqrcci- -"iloa ion al roitbusi Jo soillo odt selc^nuoo issued erlJ- oifT ,8901'i'io anarl^ to enoid'onul edi lo nolen^qxo ortd- isroo Iliw rfoxriv/ levsl -s o:^ ^^^1 lo oZubadoa sxf;?' ai seeoiofii noi^eniniilo arid- nsorc Ilxr; eooi'ilo *aioilbsjB sdi "ic i'aoo sdS "io ad-eoo arfJ istoo oci' 3i>s«i scf won i-aum rCoxxlw xvsL odi to iBttansg Btii oi gnxvjBS a riellqjnooos lliw bnB ,e9ox'i1o SoSirf* sjCbm odv; 9eorfd- noqu neMwcf exli esoslq ii. sixriw ^I'l^Jsccxs* ^IJrigln ;tx Giaaw ai rioirfw .asol'llo ssoxict "io sbu cteaJ-eeiji 9xW ijasrcBxIo 8oat Us t,Grld" ,9'xol9isx£d' .bnsirxcoosi sW .egrtolacf -jjn^^anx "io jjnilit -rol sd'scfe ex.rfd- lo s'icd'xi)JJfi ^^nuoo odi vd" -nx scT .Bseriooil egsI'iiBrri anxysaJ: rco'i eet sri* d-qeoxs ,ad'n9ni oriJ- ml QkBa scf sgnBrfo on d-jsrlo ^uo ,;tn90 loq ■^J'lJtt f)9e69r:o ,i)3l 98nooiI 3^si.iiE.a noxJ-fixrd-xa oxLT •■;3:^;i9i p Y . *nxroO ^ vicf Jbon'xgriD assl .2 srtd' y;IlBOxJoBiq ax ailislo \;d-xi)joo siid' lo esoifio od:l ni. 89 91 9xfT .eooiHo * aio& lb UB odi rtx i)niJol J-sxIcJ- 85 9Uiea T^IlBunid-noo bbxI sii/d'£lax£3l viij bne os-b si^e^ l>9xil sisw anxlil orI;f lid-njj soxllo 3'2fi9lo sxld od" esicfiJi) wen b&bba QsDuh axW Il£ tc j-aoo sxid" :i9voo ion of) soxllo sdi to 8991 116. required to be performed by the clerk. The latest demand made by the legislature is that of providing for tiae filing of an additional divorce decree which must be followed by the final decree. While this would not seem to mean much to the majority of counties, yet in King County we find that it means very considerable added costs. In discussing this matter with the county clerks we find that their state organization has already had this matter under advisement and they intend to recojiunend to the next legislature a substantial raise in all of the fees of the county clerk's office. It is not so simple for this cominittee to recom- mend a raise of fees in the clerk's office because of the fact that the fees are charged on a different basis from that which obtains in the auditor's office, and we shall content ourselves with the statement of the county clerks that they will ask the legislature to give them at least twenty-five to thirty, and perhaps fifty per cent increase in substantially all of the filing fees in the clerk's of- fice. 3. Mortgage Recording Fee ;- We have recommended in a previous paragraph of this report that all of the fees ,dll A^cf iiswollol 90 isuta xfoxrfw oa-xoab soioviL lBnoi:J"ihi;B as lo rioirn nBsm c^ raaea i-on £>Ii;ow aMo alixfl?/ .eozoab lanxl arid" ;tcfli' x.Kx'i 9W y;^nLfoO ania nx Js-y; ,GSxJTii/oo lo \:d-ino(,£xii orlJ- oJ- , 3^^800 b9bh& sLoBiebJiznoQ Tjisv anasxn ii. sjIisIo \;;^fiJLroo orlJ- rid'xw toiism atdi sniaewocxL nl exxict bsid Aji^BSiIxs ai^xl nox-5;cxn\sgio sJ-j^^a iterii jBiio i)nJtl sw arlcf od" i)n9ni::too3i od l)n9dT:x ^loxlJ- JbriB ^tnam&aiyijjG i9LnjJ isJ-djsm lo 8991 oxid" lo IIb nx oelct IsxJ-nBd-ecfxra s sixfj-slsjfcsgl J-xgn .soil^o e'^ttslo "^dnuoo axlJ- -moosn oi oeiti:i^i.:oo stsii lol slqcria 02 ton ax tl axW lo seiJEOOd aoxllo e^AisLo srit ni aogl lo 9sxbi b bnsm aioil exsBcf J-n9n9'ilJ:i .p no baaisxio sib 8991 9r{d- isdi J-obI IlBxia 9v/ iinB ,9cxllo a^iottbus axld- ni enxBd'cfo rioxrlw iaiit a^liolo xinuoo edi- lo tastaoisic osii riih^ csrloaisjo inainco iaseZ i£ r.tedi svxa oj 9iuiBS.eL:Q9l or.J .-lrb /Xxw xsdt tssit 9eB9ionx d"n90 loq vd'ljfcl aqsjliaq i_ 'il ^nl^'iooafi e ^;..^_aJ "io^ .£ 8991 9x1* lo IXb i£idi d"X0Q0i exxIJ lo xlqB^SBiBc; ajJoxv9iq s 117. of the auditor's office, with the exception of the marriage license fee, be raised fifty per cent. The committee is of the opinion that an entirely additional tax should be levied upon all mortgages recorded, with a view of pro- viding an additional source of revenue. Such a tax is now in effect in Uev/ York, Michigan, Minnesota, and some other states, and i is 'producing a considerable revenue. The tax is to be paid once, at the time the mortgage is recorded. It will not be burdensome since it is not an annual levy. We therefore recommend that the law providing for the fees for recording mortgages be changed, in addi- tion to raising the initial fee as now provided by statute, so that it will require the auditors to collect fifty cents per hundred dollars or major fraction thereof on all mort- gages filed for record in excess of $1500. In placing the minimum at $1500 it was the desire of the committee to avoid the necessity of imposing the tax on the small borrower. 4 . KBFORaSTATIOIT : The subject of reforestation has received the care- ful consideration of many of the best conservationists and .Vll eeiiimioo srtT ,iaeo isq •zi'ii.t bestsi sd" .dsT: sensoil bluods 2CS* Icnoi;Mbl)£ ^jlsilJ-ns hb isdi noiniqo srxJ lo si -oiq lo wsxv B xlJ-iw ^babzooet assss^ioici Il£ noqu i)9xv9l scf ex x&i B douS .swnsvsi lo so^cuoa Icnoid"i:bJi)£ ae ani^lr 8CI02 bxiG ,s*oa3nni2J .n^axrioii: ,2iioY wsH nx J^oslls nl won .sunsvsn sIdcasJbisnoo £ 3nxoi;I)0'xq sx bat; ,8ei'.-l8 TCorlJ'O si osfisd-ioci sxli- SdicT ari^ ^s ,9ono bijsq dcf ot ei xcJ erlT n« J- on ax it 9oi:xa sraosnabiijcf ed cfofi LIItj SI ,bobiooet .\;v9l l£ur.n£ Snxbxvoiq x/eL Siit todS bnsirKiooai siolaasricf sY' -iJbbB ni ,b3s,X£XJx£o scf asaBgitioni snxbiooei lol eesl exlJ- lol .si-uJjBCJ-c y;cf bebivoriq ^on a& ssl leiJ-xni Oi-id" aniaijsi cl fioxJ- ad-nso Y^lil d-oalloo oS aioS zbis& adi situpei IIxw il icdi oa -J-ion IL£-> no losisxiJ- xioxd-osil lotsif! 10 exsXIoi) banbnxrri leq axfj- snios^Lci nl .CCcI$ lo 3390x9 at bioosi 10I belxl ag^x-.g JbiovB oi 99d-Jxri:cico 9x1;^ lo Qttaeh edi cew it OOSIiJ ir. iimmlnin .iswoiioa" Iljscta 9rid' no x&i edi gnicoqmi lo x^lsaeogn grid- rT'TOITATaOlHO^Efl .Jt- -aiBO sdi bsvtsoei ssd noliBiaaio'tQi lo ioolduz oxTT bnB aJ'sxnoxdsviganorv d-asa' sxfd' lo ■^nBci lo ncJtdei9bx3noo lul 118. experts in the world. There are two great protleas includ- ed in reforestation: One, the perpetuation of natural re- sources, and the other the protection of the v/ater supply of the country. It is an established fact that where reforestation is not taken up and properly fostered the land which is fit only for reforestation soon becomes a barren waste and in addition to being a menace to other property causes a great loss of revenue from taxation. Those states which have removed their timber resources are no7i frankly engaged in an effort to build up the ground to make it possible for young trees to grow. In the State of Washington we are fortunately sit- uated. We have vast tracts of virgin timber still remain- ing, but unless reforestation is undertc?ken as the merchant- able timber is removed the natural growth, without care and protection, will be a very inferior crop. Replsuiting of trees is not necessary here. We have learned from the experts in this line that if logged-off land is properly burned the new crop will more than likely be fir; if it is not burned and properly cared for the natural growth will be hemlock a,nd spruce. .811 •buLoal stzQldoiq, Jsorts ovii sijs e-tociT .bliov sxIJ- nl siiecixs -91 XeiiJden 1o rioiJ^fiiJ^sqn&q erfJ- .snO moid-fid's snolsi nl />s ^Iqq0s •X6d'fi'.7 9xid- lO noi-osd'Oiq adi loxiJ-o oxiJ- injs .esoiL'oe .■^linjjoo oriJ- !.-< noxJ'Bd"e9io-3'i sisnw c^fiiid• d^oal LsriaJtIdisd-aa itj^ ai il ill ex rioixiw i)a£l sxld isiod'ao'i xlieqoiq ixie qu ns:ted- J-crt ei nl iinr. sla^v/ fia'zi.ccf £ ascioosd nooa noxd'i.J'asioxai lo'i vino ^B9iS £ SSBJJBO vd"'isqoiq iQxid'o oi 9o.sn9iii B ^nlsd oi- noJ:d"xJj£»B svsfi rfolxiv.' eeisfa saoxfT .xxoid'j?-xj3d noa^ aunorez to asol nx i)S3Bsn© >^I:£rir>n't won sib ssoixjoasi nsocixd' ixarlJ bsvonei tco'i olcfxaecq *1 92isi\v od f)nx;oas axIJ- qi; hLiucI oi inolle ns .woig ci BQait 2^^ox -He •iloicciL-izoJ 01JB 07/ no;tanxx^aBV. "io e^Bj-g eti3' nl -niemsi lliie lejciii nigixv lo aJ-o-eid- vBBY svsxi e'X ,b6iBU -^nijxioism srld- sb nsjLn^J-isJDnx; ai noxd'Bd'asio'iai aaaXnx; ^ucf ,gn± i>nB 9130 JifoxiJ-iv; ,xid^v/oi-r L£.iiJis,n sxf* Jbsvomai ai igdivixd- eldn Ic 3niJ"nxJl:^o7i .qoio lox'xa'Lini x.tov s oj IIxw ,nox;fosdoiq sdt cici'jt i)onii59l svBxi a?.' .919x1 y;i,Be8909n d^on si eoaid' ■\Cli9qoiq ai i>n>Gl T:*o-L9saoI 11 isdt entL eliii ai siieq::© ii "ii ;ts.1 ed \le:^il nsfJ sicr. Lllvf qoto v/sn erii bonnud lllyi xiiwoiQ iBiUoBn edi lox beiso vIi9qoir bna bonrsjcS ion ai .sojjiqa I)n£ jioolinsxf sd 119. The treatment of the vast and increasing acreage of logged-off lands is a problem. The first step in a reforestation program was taken "by a legislative act of 1915. Chapter 47, Laws of 1915 contains the following provision: "\i/hen the merchantable timber has been sold and actually removed from any land, the board of state land commissioners may classify the land or such portion thereof as may be found most suit- able for reforestation, which may by order of the board be reserved from any future sale, and when once so reserved shall not thereafter be subject to sale or other disposition. The commissioner of public lands shall certify to the state fire warden and forester all reservations so made and thereupon it shall be the duty of the state fire warden and forester to protect such land and the remaining timber from fire, and to reforest the same." llo suitable approproation lias been made by the legislature for a proper classification of the lands now belonging to the state for the purpose of setting them aside as reforestation areas. In our opinion it is the duty of the legislature to provide immediately for this classification of all state lands, and the act of 1915 should be further amended by the incorporation of a pro- vision prohibiting the sale by the state of any land that is suitable only for reforestation and including the right of the state to lease the lands so held for reforestation for grazing purposes so long as their use as grazing lands will not interfere \7ith the growth of the young trees. ,Qll "io d"OB svx^Blaiaal b ^o no:i£^ asv.' xceiao'xq xioJ:J"i:;tas'rol:si gnlwollol fidi anis^noo Siei 'io aw£j , Ti» leoreriO .cIGI :nolaxvo'rq £)Ios r.oGo £.u_ led.iixj' 9luBd-ni^;xio'isir:i OilJ^ narfV/" I>nsl Qdt Y'iiaaslo "'^sct cienoisaxx-TCiOO Jbrtel ad-si-a "io -J-Jtus Jaor. bnuo'i scf ^-sni 8£ losaarfc)- noUrroq rfous 10 odi xO 1(11)10 lid ^in rioxiiv.' .noxcfjBi-ssio'isi 10't olds nsriw i)nj3 ,6l£8 8*xi;Jj/t 1^03 morrl ^sti&bsi acf bisocf d-oai.Jjja scf laJlasioxict ocn Ilj::rle bsvieasi oa sono 19noi33ir.1ni.co 9XiT .noiixaoqaib tstiio to olaa oJ" 9ii^ ad-xita srI;J- oJ" ^"ild-ieo Ilsrle ebciBl o'lldvq "ic i)njs Qhsoi oa sncicf.'2yi9 3 9i lis lao'nsiol bnsi nobisw aebtBx/ 91x1 2d-.--.J-3 oiii Io ^civb odi 9cr Lls:ide ii aoq_uQiodi Snxniscigi exiJ- b[ts> bns^l dous iOQ&oiq oi teip-siol bns ".9riiea odi icetotei oi dcls ,9iil noil locfmiJ- 9rid- ^d sbr.c: nssd a-sr- noid-BOicfoiQcrfi sld^iJ-iua oZ ■won ei)n>il srlit lo noiJ-^oiliaaBlo 'isqoir b io"! eivizLei-^al nT9xi^ 3axi'u93 lo 9aoqii;q srW 10'J gJ-.c^fc oiIJ- cJ- sni§nol9cf 9x1;^ 3i J-i noiaiqo 100 nl .a£oi£ noii'Bd-asioloi as aiiias aixiJ- 10I ^l0d'i:ii)9i:mi sLivoiq oi 9ix;*i3laxs9l sxlJ- lo y,Sub 5iei '10 ^J-oi; 9rIJ bns: .vbasl ed"; J-a Us lo nox^jioxlieaslo -oiq J3 lo noideioqiooni edi xi^ bsbtietoB isdizut ed bluode isidi bnsl \:rtc lo aisis sdi vd alsa or£i- snictidlxioir noieiv td^i.1 edt ■gCiibijLoai. bciB aotisiaetolst lol Y,Lno sldsi'ius ax ^oic^B;ta91ol91 10I blsd oa p.bnsi sdi 92^:91 ci adr^J-a adi lo e^nel 3nis£;is ae 9au riodi a& sfiol oa aaaoqiirq gnxsBia 10I ,a9Dic>- am/ov Qdi lo xld-wois sriJ- rfoiv: 9'x9li9;tnx J-ors lllv 120. The state should also be given power to purchase at a nominal consideration all strictly reforestation lands now held by private individuals not desiring to enter into a reforestation contract with the state on their ovm behalf, and a suitable fund should be set aside by the legislature to be used in acquiring all such lands. The act should also provide that at the time the timber on the reforested lands becomes merchantable it shall be sold, fifty per cent of the sale price to be placed in the permanent school fund and the remaining fifty per cent to be returned to the counties in which the land is situated to reimburse the counties for the loss of taxes upon the said lands. The foregoing pertains to the handling of the present state lands and the acquiring of further lands by the state. Th^re is still another field of reforest- ation that must be considered, namely, the right of the private individual to enter his privately ovmed logged-off reforestation lands in the reforestation class, and an act should be passed authorizing the ovmer of logged-off lands suitable for reforestation to have the same classified by the state land commissioner and after classification to .OSI abnel noi.^.BiBBio'ioi x^ioziie lie aoits^'xsbtenoo iBnifcor: g iz odTii loiao oS sniixesi) ;ton elsubivibai oiBvt'sc yd bled v-on .lljBiiecf x^vo ti.o£ii no sd'jsi'B yxiJ' rij^xw J-OFidrioo noiitiJ^ssao'isT: b siiJJ'BlsissI Sri:)' ^u SDias :^9s 9cf Llucile biiul sLo^tiue b bas srid" araij- srfd' ;J-s i'sriJ' siilTO'xq oeJEe bli/one foB sxiT IXerfe d"! alcfjs^friarfo'sain BsniooscT ajjnsl iied'aaiolsi orij- no ledmii as. beosla scf ot eo'tiz sLr- ?-.. _ .. :rnso isq vo^il ,bIoe scf d-nso i9c: ■^JxX'i anxnxfijisi srii- I>nB £»nx;*i loorfoe tnsnBnneq 9x:''d' X)3J'Btfc^J:a 3X bni?! sxIj floxiiif nx esUnxroo srfJ' o^ baxtitrd'si scf o^ 9r[j noqx; asx.Rj' "io asci orL+ lol aexJ^nx/oo or(.t Qeiudtnle-x oi ,eb£tsl bi.Bs arii' lo snxIbnjBxf srid oc^ snxB*iaq gniossiol edT shcisL zerlitsjl: lo sniiiupoB edi briB abctsL eisie insee-icr -d"39io-oi 'ic blsxl -xaiivone IIXvS ex s-r^^iT .scf-scta or.:j \-o 9di lo d'xigjt:: o^xij- ,\;l9ii-isn .bsisbianco scf j-sjjje ^BXid" nox^e l'io-b933oI bsnv'G vIs-i^^TXtr sixi isi-ns oi ls-:ubtvibr:li sisvliq toB fuG bn.3 ^aeGS.o noxji5d'a9ioi&'i oxid" ni aLoEl noxdrd'aeio'is- abfiBl "ilo-basaol lo nsm'/o oxIJ- anlsxnoxld-jjB bsaaijq 9cf blucria ^d" b9ilicaBlo siasa adi svaii o^ nox^£d-89iol9i lol aLdBiiue oi noJ..t£-ox'lX3SBlo ii1& bns ngnoiaexi.imoo bnsl o^s^ie ed.i 121. enter into a contract with the state that in considera- tion of having his land so classified he will agree to have tlie land placed upon the tax rolls of the county in which it is, at an arbitrary tax value so that each forty acre tract v/ill he taxed ^5,00 and that the tax so levied shall be paid into the state reforestation department for the purpose of defraying the expenses of fire protect- ion, inspection, supervision and control of these refor- estation reservations. The couniy assessor should not he permitted to change the assessment of such lands while they remained in the reforestation class. This act should al6o provide that when an individual enters into and executes a written contract with the state embodying the terms spe- cified in the statute, it shall exist for a period of fifty years. The act should further provide that at the end of each ten year period of the life of the contract the tax shall "be increased tv/enty per cent, and that in the event that the owner of the land desires to withdraw from the contract at any tiiae during the life thereof, he should he permitted so to do only upon the recommendation of Ihe state land conunissioner, and upon a showing at a hearing .ISI -BiBbisnoo tii. isdi eisie edi diivi -toci^noo js oini tsd-ns 0^ S9iB^ iliw 9xf Lsxlisafilo oe bnsl ehl anivari to aoti n'r v-.tpjL'oo oxiJ- lo elloi ::si' on'd' iToru beoslq bnnl sdi sv.zd JbsivsX 03 :w2i- 9xi;f isdi^ baz 00,65? be:czi 9cf Iliw ioaif siob .tnsni^txiqeb noiir.^ssao'isi oj-i^i'e arfcf oJni bic.r 9d' LLsda -iOQtoici^ ozil 'io aaenoqxo arfj ani-iS'xlSi:; 'lo saoci'xu.: axIJ- loi -lOiOi saorf^r i Ioi*f£oo bn& nolarrisque. .noij'osqani ,nox ton blisoil^. 10333333 T^d'HUoo srfT . gnoijnvigao'x foijstse alxflvv gbncl rioua Ic J-naraassane arid- 93rxi?xIo ot i>9.i-j-j:ini3q od bLuoda taa oixlT .cg^slo noiisiasiolBi odi cii boni&mdt y;,3di setuosxe bna oiat. Bio-fnfi iBUbtvLbat ns naxiw isdt ebivoto] oals -sq '. iii\vs.i3i Qdt 8nxx£>od"m9 sd's:?'-- :'-^ ---t-j..- •■■-.-'ij-noo natcHTv; .g "iJ-'ii'i "io boltaz ^ '^o'^ d"six9 Llzda .tx .aiud-cja oxIJ- nx beillo ijiiu ■-•ii I Ji3 i*£rid- 9i3ivo'io; i2xi:^iu^ hiiJod?. ios exfT 9xld- j-osicJ-noo 3dS 10 alxl oxi^ Io boin&o: isq\ ad& doBO Io 9x1^ ni tBri^ ba^ .Jtisd isq -^J'nsv/J- bsasoionJ: so' Ilsria xed" ,-„ ..-■^. v^sibiiJxw _■. -jaixsQi) bciBl adi Io 'c9n'.vo v.^j j.3:-j J"n9"V9 ijlijoxia 9x1 ,'io9n9dJ' otiL adi -^ntiub onili y^aa ^q d'o-3ijnoo odi Qxt}' "io noi:^.6bn9Mfiioo9i srfJ noq.u y^"0 oi> oi oa Jjsid'xxnisq scT ^nxieaxi ,i . ■; ^nxworia s noqx; btisi .lenoiasxffiraon oubI 9d-sd"a 122. held for that specific purpose, that the land can "be used to better advantage vrhen put to some other comv.ercial use. If the application is acted upon favorably by the cam- missioner the applicant shall at the time of release from tlB contract pay to the State of Washington for the benefit of the county in v/hich the property is located, a stun, as taxes, equal to the amount that the land would have been taxed in said county had it not been registered in the reforestation class. In addition thereto, should there be any revenue derived from the young standing timber upon the land at the time of cancelling the contract, whether as wood, poles, ties or other commercial produce, a sum equal to tr/enty-five per cent thereof shall also be paid to the county treasurer. This amount, together v/ith the back taxes, should be placed in the general fund of the county. The act should further provide that at the time the timber becomes fifty years of age the land commissioner shall appraise the same for taxation purposes and shall fix a value thereon sufficient to produce a land tax pro- portionate in amount to the tax paid by agricultural land. .SSI beau ocf nso bnsil edt isdi ,9aoq'iuq olliosqa )"A:t io1 blad ,33a Isioiersjnoo leAio srnos o* iucr nsxlw oaBi-flcvJa zd:ft3di oJ- -atoo sxii' ^c<^ ^Icf ci o vxil noqjJ bo^oa ai xioxJ'v^olIqqis sxld" 'tl raoil aaselai lo &isli sdi J^s Xlarfs tasoJiIqqc Bdi lanoxsaiis aij ,mja xi ,I»9;ti300l ai ^c^taaqoiq arfJ- dotdxi til xinuoo sdi "io need sv.exl biwow bnfil erl:^ isdj .-tnuocis 9ri:t oct' Is.upo ,39:08^ edi- ni o^iyJ'aisai naacf *on il b&d x^cojo-i 5xiJ3 ni baxsJ sisrlo ijlJLforia ,oc^^19^[cf noiilbha nl .aasXo noi^-sJ'asio'isi noqu ladi^ti anx£)rr«JTi anuoy; sxfJ- 10011 bevt'iQh synsvsi \cn« ^° isricfsaw ^ioB-uaoo oxij s^i-i^-^^onco lo a.-aiJ sdi iB bnaL adi cujs is ,3ouSoiq Isxoisinraoo isri^fo 10 aeli .aeloq ,i:)OOW Sis JS>iJ3e acJ oelB .rit^rfo loo'iexEf J-nso isq 9vJ:l--J:T0iq o* berisHqtaoooB eLiJ- 9c' eqois isdi 031;; sv; .^Bw lebni: raei^onq noior,J^39iol&i isqciq £ T, . oJ- 9*:uJ-£isJ:ij9l 9x1^- a9si:torI*i;B tsoi:^vii.ie.ciQO sriT .noitfocsd' bn£: Jngmsagear. od" slcfr.!! xiJ^-t^ttel £ lo bserl eidi d-uc y'-^^s oJ' bQ:^OBc:e nssd aB.^' noxJ^iileiasI 9d"£iT:goiqqA 9rl;t n99cf 9VGii od" d'i drgjtlgcf 9V/ .noi;fq:in9X9 lBr;oid"i;d"id-cmoci lo bn£. [loiiiiiii^snoo sdi to aiamcil edi "io rictocf .noxd'ngdTii b9xci-ni; rtis agxllxas'i: "io 8hB9rr oJ- :tns:ii-^ oi- .giud-slsx;-;^©! exld- asaoqoiij'c: cfl.J- ^o'i Y^'^^Qoiq larroeigq r:i 005$ lo 9c;xi£v;cIIb d'ox*xd69i \;Il£OilJ:o9qa *on ssob W£l srld- rlsJ^orfd-Ifi tQRiod &dS 1c lo ai: QOtiicxr.oc -rx-'oY .eboo^ Morl9aXv'cr- cd- ncxd-qrrrgxs sxld- noxd"qm9X9 axxfd- d-oxid-aei: oi nLd&ilaeb ax d-x d-jsxid" noinxqo adt 125. to household goods and pex-sonal apparel for three reasons: First, the restriction of the exemption to heads of famil- ies is indicative of the desire on the part of those who wrote this provision to limit the benefits of the exemption to the goods of the household; second, the expense of col- lecting the taxes on small amounts of such property is out of all proportion to the amount of revenue returned; and third, the exemption privilege is ahused by individuals living in rented apartments, who use the exemption feature to exempt other than household goods, such as automobiles, boats and other property. To avoid this situation, your committee recom- mend, on the assumption that such a change would be con- stitutional, that the law be amended so that the statutory exemption shall apply only to household goods and personal apparel , The Bxemption of Cemeteries : Section 6891 of Pierce's Code, under the head- ing of "Exemptions" provides: "All lands used exclusively for public bury- ing grounds shall be exempt from taxation," Section 572 is as follows: Any person owning any land exclusive of encumbrance of any kind, situated two miles outside of the corporate limits of any corpor- ate city or town of this state, may loave the same reserved exclusively for burial and .esi :crrogr.;3i eeirli loJ let£.qqs L&aosisq has BbooT- blodoavod ci -Ilrriel "io ebBed ot noiiqaexe otii 'o aolioiiiieet or^i ^ieiftf oxivf Qeotli xo iiBq edi- no sileeJb eriJ- lo 3Tx;f£oiJbnl si aot [totiamexa aii^ lo aitJened er-'j- d'imil ocf noielvoiq strlt eJoiw -loo ^0 seneqxa erii ,bnooo3 ;i)Ior£oejJoxi sxU Ic aboo^ edi oi ^uo ai vi''X9qoic<: iloue lo ad-nuoine Ilfime no esxsi scii gnJ:d"08l i)nf ibsniJLfJei stinsvai lo *ni;ofii« sriJ- od" noitioqczq ll& Jo elBisblYxbat xd beaudB ax egsllvx'xq noxd-qr.iexa adi ^bildi szvi£s1 ncl^qmsxe srLt eeu orfw , ai'nsxcd-iBcTB ijs^nsrr nx snivJtl ,8eIlcfonto*WB ae rloi/e ,8f>ooa bLoileeuod tisdi ladio Jqmsxe ci »X;^ieqotq lodio biiB Sosod -nioooi ssJJ'iciCioo luox «nox;tBXrct-i8 aldt btovB oT -noo ecf blucm e^^aado e doua tiidi aoiiqmueeG edi nc ,bnezi Xtoiuisia adi itidi oe bobn^mB od wel edi iFdi ,l£5ffoi:fUoJtia Isnoeisq bciB ei>ooa bLodanuod. ot Y-C^^c v-tci*!^ LlBde noliq^maxe , laisqqp. :esJ:;x sJ3nap ^ _j: o noxjcfinexll sriT -I)B3xf ox{;f isijnxf ,aLoO a*eoiat<^ lo 1666 noxJ-osS :e9l>xvoiq "exxoi^J'qxnexri'' 'lo sni -Xtvd oila'uq nc'i \;l9vxeulcx9 beau abr:s:l £IA" "♦noxi^fiiicjEct r-cil i'qxnsxs eo" IXsxle abnucf^ grii rewcllo'i ae ax SV5 f:oiJ-oa8 lo sviejjloxe fer-x:! \;kx5 j^nxfrwo noeisq vriA aslxffl owJ- i)0*BU^X8 ,I)nx:I ^ns Ic oorLsaccujons -loqioo "^na lo sd-xmxl scTxiioqioo oxiJ- 1o a^isiijo atlJ svsxl YJ3xrt jOi'i^.tfa eixl^ lo fiwoJ" -xo x^^^ ^^^ briB Ifiiud io1 x^^^^^^^^^^ bavxaeei snise 126. ceaetery purposes "by complying with the terms of this act, provided that the land so sougiit to be reserved shall not exceed in area one acre." Section 569 further provides: "Burial lots sold by such association shall be for the sole purpose of interment and shall be exempt from taxation, execution, attachment or other claim, lien or process whatsoever, if used as intended exclusively for burial purposes and in no wise \7ith a view to profit." It is apparent from the above sections that it was the intention of the legislature to exempt only areas of one acre from taxation under a ceiaetery plot, and then only in case the property were actually used for interment purposes and occupied by the dead, all other vacant lots in the cemetery being subject to taxation. The intention of the legislature was also that all charges made for cemetery lots should be used for the care, upkeep and improvement of cemetery grounds and that a profit was not contemplated. In the last few years, however, cremation has to a considerable extent taken the place of land burial and in consequence large sums of money are invested in crematories and sepulchers within the confines of cemeteries, and the promoters of such .asi d-xlj^uos 0?. bnsl srld" d'srlJ i)9f)Xvo'rq ,:tos 'cidi 'to 9fio £&ijs ni boaoxe ton .risr^e hsvrocoT 6cf oj Ileas noii^iiooaajs xiooe \'.q bloa eioL Is.ttsM" Il^rle brw tneaneini 'io secqiuq slos Qdi io1 ©a ■ ^nscirfoBoJ'fi ,noii"uo9X9 ,noii'f>xe:t moo:'! i'qn-sxo 9Cf ti ,i9V908d.Erfw eaoocrcq io neil .nix^Io 'iodic 10 asaoqiur I/jiiucf loi x^avleuloxo bsbr.sSrl 3£ ha a a ".cmoiq od" W9lv e xfd'jtv/ seir on ni Lnxi ^Bxld- snox-oea 9vod's sxlcJ- raonl d-nsxeqc.^; cl il \lcic iotsmr.'j oJ" oik:i&let^5l orlJ lo rtoxdned'ni ©rl;t eew d'J: .J'Olq i^ioi'srfgo e lobnsj noiii£X£,i raoil 9:co£ one Io ecsxs 10I i)98U v.[lj3ud"0£ 9157/ "^tidqotq sdi aascf ni xlno r.ed:^ bct3 •xarluc lis ,bBsb edi \di ijexqxrooo bnij seeoqiuq iaecneini .x-oxJ'fixed' oJ d"00(;cfjj8 gnxsd" xieioaeo 9xi« ni eJ'oI ioBocY isidi oeX,G afiw 9ia.tBlaxs9l edi to noxctristni exiT lo'j. h98U 9u" blijoda aid \,tQioiiiQo 10I v.^,i-^h- eo^isdo £1b btiB e.bciuoi^ y-neiemso Io ^fnemeYonuml bai^ qe^^qv ^etBo edi ,eiB9Ti Y.'sl iasl odi nl .beiBlcmsinoo ion esv/ iilo'xq -s d'srid- 9rid' ^9^Ii5c^ d'naJ'xs 9lcfjBi9iiJ:eaoo /? oJ^ ssd noLisi's:etc ,isv9v/oxf "io errii/e q-^ibI sonsijpganoo ni biiB iBiixftf IJrsfil Io 90.elg nir-J^xw sisiioiuqea i)nJ5 asiio^tsniQio ni i»ed-a9vrrx 9n£ "^anoni dou?. to eiei otao'iq edi .bits ,a9Xi9i'9riG0 Io sgirxlnoo edi 127. enterprises are reaping a handsome profit therefrom with- out the payment of their just share of the taxes of the state. We recommend that the legislature pass a law requiring the assessor of each county to place the property of these associations on the assessment rolls at valuations based upon examination of the gross earnings and not at the usual vlauation placed upon cemetery prop- erty. We "believe that this will produce considerable revenue to the state, as the right granted by the cemetery to the crematory association is a valuable franchise and increases the value of the land upon which the crematory is situated from a merely nominal value as a burial ground to a first-class business property. We recommend further that legislation be enacted which would require the owner of such a crematorium project to file an application v/ith the county assessor and to pay a license tax based on the number of niches to be sold and the prices at which they are sold. 6. MATURITY OF BQITD ISSUES : After a thorough investigation of this subject your committee has learned that there are a great number .VSI edi lo s^XBi edi to ei&da is.u[, ilsili 'ic Jnoimcjen oxiJ- d-uo .sj-Bd'g edt soiilq oi ^Jnt/oo riojss Jo noeceea-s oiiJ- snxtli.'psi egninies asois sriJ lo r;ox*i3niiTxx& ncci:; Ji^sajsa saoti^.ul&v is -qcrrq ■^'^^^^9^ noqjJ beox^Iq noxd:f3ijeIv iBuaxr sxlJ- i-s ioa bnG 9ld"fiie/)J:enco POtr^oTq XIxv; :x.ci d-jor^d" 6vexIocf 6\'7 .Yd"2:s ijiis esxrfonBil sXujeiJiBV ij ax noi.iBiooei^& ^ici£iLisio sdi oj y^'ioisidQio sdi xfclrlw noqsj bnzL ecLi "jio ouIbv adi esejseionx bnisoiz) JJsxixfu B a£ iiiili^v l&nlaon Tilsior.: s noi't iJsJsuiJis at »X3-i:?cioiq easnxax/cf ea«;Io-c^eiix s ot jaai.o'xq rox/X'ioJ'wra&io jb xlojje "ic •j.Oiiv^t. iuj Sixupya i)Xifcw r'oxxlw oJ Lac ifrfBaeae \;*™^oo siii- rlJiv,- noxd"Br4Iqqs kjb olil o* i>Xos scf od^ earioxff lo isdciwfi srld- no fisajsd" xbJ eercaoil s yjsq .j'sXca air, \:9£rj xioxrlrr ta esoxij ^^.i-i i;'nx5 Soytihutal: , t ^osi,djjc exriJ- l:o noxvt^sxcfaovnx xj^x;oiorI,t a itj-A nocfciun d'eois e sis etecit icrii boaisial asrf ssddxmcioo iuoy 128. of bond issues in this state that are being continually refunded, and that the public is being led to believe from year to year that our different conmmnities are in good financial shape when as a matter of fact they are paying interest on bonds issued for public purposes such as bridges, court houses, etc., that have disappeared from the face of the earth and have been replaced by new ones, the bonds still remaining a charge on the property of the locality; and in addition, new bond issues have been levied for the purpose of erecting new buildings or bridges. Your comraittee believes that the only safe and sound policy for the state to pursue is to retire the bonds when due and not permit refunding. Therefore, we recommend that a law be passed making it obligatory upon each tax raising unit in tine state in the raising of funds by bond issues to require the bonds to be retired serially and permitting no bond issues to be refunded. The com- mittee is aware of the fact that there must be a leeway of from one to five years, dependent upon the life of the bond issue and the use to which the money is to be put, before the retirement should commence, since in many in- stances from one to two years elapse before the money raised .8SI ^jllfijjnid-nco anieo sis t.ztii siszie aiiiS ni. ssuasJt biiod lo cton't sve-ilscf oc^ ijel afeiscf si oilduq sxi;t i-jBr.l bns .iisLnu'iei 1)003 ni ei£ asititiUi-Tioo ine'iel'Hb isjo i£tii isq\ oi 'xsq\; 3ni"^Bq sis •^sxlt ios'^i. lo tsitsc: js 3b narlw aqaxfe JLEiom^Kxl: 8£ rioua aseoq-iuq oilduq lol i)9U23i ei)ncd nc iasreiai moil ijsxBsqqsei.') avarf ^sdi ,,oie ,3Sswoxf J-ijjoo .esgbiatf .asno wsn ^cf Jbso^Iqsi nsad Qveri bOB iiJics eiiJ' lo 30£l arid- arid- "io ^iwiaqoaq etii no 9S'i«'3Xlo b ^ninisxriai Hi J a abnoo' edi bslvel «s9cf or&d eewasi.bnocf wan ,noxJ-ii)bB ni has ix^llsiooi .aoaiJirni 10 aaniii-IiiJc v^sn af-i^^s'^s -0 aaogauc srld" lol has s'i/'a ^Ino srl^ ii^d* asvsxlacf aai'd'XEiinoo 'Xi/oY Slid- 9ixo9i oJ- ex sjjanJL-q oi" eii-ia arid- lol ijoiloq iinJxoB 9w .oicliStroriT •snxonx.'ia'x J-ixnioq Jon bas euh nsxfw £i)nocf ncqu ^loJ'^^gilao c^x gniiiea Lsae^q scf wsl £ dx5£"d- hnsixiooart B^nxrl "io aKisiJ^i sriJ- ni ad'^id'e etii^ ni linx; 3nisii3i xBi" dose ^llxiX'iaa baiL^oi acf o;t Qbno6 edi oiivpoi oi aauaai bnocT -^^c' -ittoo axIT ,/)8X}nu'i8i ad oi eoua^^i bnod on :Q[ii:ii isiioc i^oB ■^£W9Sl B 3cf J-aunr s-rarlcf d'sx-'o d'o,;'i axfJ 'io QIbvjg ai ao^J-im arid- lo eli.1 sdi noqu d-n9£)naq9i) ,en.G9-^i evil od" ano ncil lo ^iuq ad od- ei xeaoa &dt rloiilw o« aexr axld" bciB suasi baoa -ni xoBia ni. sonia ,9on9rr£too blisoda ineiv.eilAei arid- 9iol9cf i>98ixj'i -^^gnora arid aiolacf aacBla sifia-vj owd- od sno moil e9onGd"a 129. ty the "bond issue can reasonalDly be used for the purpose for -which it is raised and that it is not good misiness policy to coiffinence retiring bonds before the proceeds of the bond issue have been spent. We suggest further that this legislation should deal with the relation of the maturity of the bond issues to the life of the improvement provided by such funds. It is a sound principle of public, as of J>rivate credit, that no debt should exceed the life of the asset created thereby. It is doubtful if short-lived improvements should eveS be financed by bond issues, and it is equally doubt- ful if any bond issue for a public purpose should have a maturity in excess of forty years. Between the limits of say five and forty years, the maturity of the debt should be adjusted to the life of the improvaMent, and every bond issue should carry the provision for a tax levy sufficient to pay interest and retirement charges so as to eliminate future necessity of refunding, 7. TAX PIT FUEL OILS ; This subject is perhaps the simplest of all of the means of raising taxes which your committee has stud- ied. It recommends itself by its simplicity, by the ease .esi saertiaJLrd boo? c!"on ei &x. ^siiii bna bsatai at ti i^otdv icI .iTfSqe nssd svcrf sueai baod srid- lo .Bbnwl: r!ow8 ycf i>9bi:voic£ d-necievoiqrui ariJ lo e^xl oxfj Ov ,;tib9io e^i3Tii(j 'lo 3.0 .oila'uq "io slqiorrxig hnJJor. b at JI IjQ^^sio J-ocas sri^ '10 s^il orii- bo9oxs b.':iw'or£s ideb on J'."!rid' bIi/or£e sd-ngaigvcreiril barll-tiona It Isjiiduob ei il ^x.'^e'isdi -iduob ■^IlBJLfpg ai cfi bae ,e9«3i2x bnoci \;cl b90xixjfli'i 9c/ "19-/9 9vx5r{ bli/oria saoriuq otlduq a 'lo'i euaat baco y,nB Jt Lul 8d"xnil oiii ciseviieE .aiB3"v: •^jliol 'to 3S9ox9 at ■^JiiwjBia e Jblx/ofls Jdgb eriJ- ^o y;i-iiu*j3j:i oxiJ- ,aT[:39y. >c;tio1 bna avxl -^jbe "io Lnocf vrere brijo ,ti:eii'£>ro'Xci!zi odi lo QJtZ adi oi beisulbs sd iasiotlltse \ydl xb& s 10I nolaxvoiq adi xttsio blvcde ousai eisnts'.itls oi as oe 89aiBrio ir.esRattisi bns d-ssio^ni \;£q oi ^^nibnsjjQi lo ■\iji8eso9fi QtviuJ to II-6 lo d-89lqinxs 9di sasdieq at ^ioo'idua axxlT ' "buie 3£xl eeiitmaoo luoy; rloirfw eexsii ^niatai 1c anjeon 9££;t eajBs axli ^d .Y^-coilqciia eii Xf^ llaait ebngfimoosi tl .bot 130. with which it is collected, and "by the lack of friction that it causes in the general business conditions of the coiiEflunityo In the very earliest stages of your coramit- tee's meetings it was apparent to the majority of the members that the gasoline tax could very possibly raise a considerable amount without doing violence or injustice to anybody. It must be borne in mind, of course, that a tax on gasoline, as on any other subject of barter and sale, must be reasonable, and the tax must not be used simply because it is an easy way of raising revenue. We have already discussed the problem of modern highway construction and maintenance, and v/e believe that it is unncesssary to expovmd this subject further. Every- one recognizes its importance, and the necessity of pro- viding an adequate revenue for the purpose of building and maintaining the public highways. It is entirely proper that a considerable portion of these funds should be de- rived from the agencies which have brought on the modern highway problem, and we regard the tax on fuel oils as an equitable means for the diffusion of this burden. Accordingly, we recomiTiend the advance of the existing tax on fuel oil for use in internal combustion engines to three cents a gallon. .OSI noxd-oiil "10 ^os^L oxIJ- \p Lns ,b3i03JSoo ax ;ti xioirlv/ li^iw sxiJ- lo enoiJiljnco eeQutaud leisnsQ sii!" r:l esayso ti J-^^rld" 6ili- "lo \;d-xiot,£;r. end- oi ino'i£ioj:B asw d'i ssnid-ooti a'ss;)- 62i£ii Y-tcfieaoq: \;r£ov £iIuoo X£,i snlloaBg ©xi^ Jr.iij eTiocfnsiu eoi-tBUlal lo sonsloiv ^nici) d-jjoxii'iv/ inuoniB sldDrobisnco s. hfUB ie&i£(S 7.C Joetcfoe loxld-o \;na r.o axi .snxXcajs^ no xe^ p. boau 90 d-on c^sum 7zsi orii bus: .slcfsnoeas'x scf Sesm. ,else .siifisvoi anxexsi lo xsr: ■'^839 ni:- ai J-x sbsjboqo \;Ic^r:i:s nipJbor- T:o fflsXtfo'xcf edi beeasjoezb y,biisiS.& 9vsr{ sV/ &r^d:^ 9vsil9cf aw bos .sonensd-nxen Lna noxi-ox;icfanco Y'^^^J^fe-c^ -',;isv:i .'isxIJ-'rxr'i ioeldue exxli- l>xix;ocp:6 cd Y'^'-P-Boonnix ^z ti -oio; 10 y;i-ica6Con evLi bn£ ,son.^nxjd axx-Id- 'io noxaxjllii) grlJ- tol ax-LBact sldijd-xx/ps nc gnxd-aixs sxld" lo 9oxisv£)x; arid i)n9iiiaoo9n 9\v ,TiIgnii)ioooA eonxsna noiiax^cfirioo iBnird-ni nx sbxj -roT: Ilo laxjl no XBt .noIIjs;i £. ad-noc e;oirCd- od" 131. 8. KBVISIOIT OF IIIHSRITAITCB TAX RATES ; The inheritance tax has come to be recognized as a productive and permanent feature of the state revenue system. This source of revenue was introduced in 1901, but throughout its history there has been inadequate enforcement and, doubtless, there ?ias been no little evas- ion of this tax. V/e have already recoi;i.iended that the administration of this tax be restored to the tax commis- sion and that more adequate provision be made for the supervision of inventories of estates and the appraisal thereof for the determination of the tax. ^ We .recommend further that the amount of tax to be levied on estates, and on gifts in contemplation of death, be increased , the increase to be effected through a change in the size of the distributive shares to which the present tax rates are applied. The present brackets are: !l) Up to $50,000 ,2) $50,000 to $100,000 3} $100,000 to $250,000 ,4) Over ^250,000 ''^ In the case of direct heirs an examption of $10,000 is allov/ed. We believe that these brackets are too high and .151 S^}lATimKul -^O PIOI8I V5H . 8 : SETAfi XAT aisijpQbsini need s&d sisriJ- liioiairf eii. Suodv,ucidS iud -e,ev9 91:^^11 on aeod as:i ei&di ,v.soI.iQSJot ,bnB tt'oneoioInQ sdi tadi b9£in9r.xToo9i vbsaoils evsd 9W .xbj sixld- lo nox -eirnmoo j:jbJ" 9:id" oi b'^ioiaei od xsi- eixld' 1o noxcf^iJ'ainiiUbB srid" to'i 9i^J3xr. 3d" ncxalvoiq 9i'J3Xfp9/)JS eiorn cfj?ri:d- biiB note l&8i.Biqc& Qdi briB s9*b*89 "lo aslio^nsvni "io ncleivisqwa ,XB& sdi lo aotiBnianetab edji tol loemedi oi xsJ- to J-m/oniB &di &sdi isd^iul bnasumooei 97/ lo nox^slqrasd'noo ni eJ-lxa no bn£ .sd^-^cfas no /)9xv9l 9cf xigwcnrfd' f>9io9l'i9 9cf cd- oeseioal atH^bseBeroni acf .liJ-fisb xEoxi.w at 89i/:x{a gvid'jJc/xiJ'sxJb arid' lo 92X3 ed& nx ggnsxio s edgjfoB'Xi dfisasiq ariT .f>9ilqq£ ai£ 39C^fi•I X£d drtoagiq orid ;eiJ8 000,06$ o* qU (I) 000,004^. oi 000, oep, (sj coo.oesii? oi 000,0010 ;s) ooo.cesO iQi'O (i^) at 000, OIv lo nnlJqciBxs noi aiied iooilb to oaso orlJ- nl .bswoLlfi bas rfstrf oocr sns ed9:l0£icf 9e9xiJ' JjBxIi' 9Y9il9cr 9\V 132. that they could be lowered without causing injustice. It must be remembered that the tax is levied on the dis- tributive share, and that it will be only the occasional large estate in which the share going to each heir is in excess of $50,000. In consequence the bulk of the estates pay only the lowest rates, which are 1%, Z% and 6%, accord- ing to the degree of relationship. The yield of the in- heritance tax could be materially increased by a lowering of the stages at which the progression begins for each class of beneficiaries, and we recommend that legislation for this purpose be enacted. We do not propose a specific schedule, but we are of the opinion that a decided change should be made . 9. EXPEITDITUEE OF PUBLIC MJIIDS BY TAX II TG DISTRICTS : It has come to the knowledge of your committee that the school districts are anticipating one hundred per cent return upon the tax levy made each year, when experience shows that it is very seldom that more than eighty or ninety per cent of the tax is paid during the tax year, the remainder going over until the next year. .2£I ,3oliesjlni anJaii'BO Ix/orlJiw fcoTCSwoI scf bluoo y^orit te,di -aih adS no bsivoL ax xsi &di isdt b&isdaioaai scf J-ejjnt ^I lenoiafiooo srld' ^J-no scf Iliw Jl i^srld- jons ,st£rie eytivdzii [it ei Ttisrf xfocs o:f snios sisrle sift xfoirfw ni sJ-a^tes sgiBl 89i'£jas ertf 'lo ^illuil sdi sonswpsanoo nl .000,02^ "io eesoxs -bioooB ,5^d bn£ ^£ ,^.I 8i£ rloiriw .ao^si J-eswoI oxid" ^Ino -^sq -nl Slid- ^0 blsiv oriT .qixienoxJBlsi Ito ssnsQi) srid- oc^ sni anliswol s y;cf besssioni xLl^iieistu scf bluoo X£i' sonsJ-iTsri xiojBs lol ani^s*^ noxassaso'^s: s-t"-^ ifoirlw is asgBd'a sri^t "io noi:;)'£l8XS9l tsdi baaa^aooQi evr bna .asiiBioxlonscf lo aoslo oiliosqa £ ssogoic; ior. ob sV/ .bsjocrts scf saoq^irq sirld- lol ognsxio bsbloob e i£di nolniqo siiJ' lo oz£ sw d-jjd" ,9li;i>9rIo8 . obsa scf blijcr£s : 3T0IHTSICl O'.I DI AX xc a^-.^U^ ssitj-Jtraiioo luo^ ^o sabelwomi sriJ od' smoo sfiiT J^I f)si£>nuxf sno gnxJ-JEiqioxcfnc sib Biatiisib looiToa srl»' it£^fc^ nsxfw ,iJB9Y rioao sbaia -^sl xs* srIJ- ncqjJ' niud-si driso isq aBdi siom *£r£J moblsa \,iev ei Si. isdi eworie Qorrsxiscxs 9di gnxauJb bi£q ax xsJ- srl* "io iiiso isq x'^oaia io x^^^^ .■xes^i d^xsn sif^t Liinv isro sniog isinlamsn sdt ,igo\, x^i 133. When a school district or university anticipates one hundred per cent and only receives a trifle over eighty per cent, naturally the district shows a deficit and has to carry outstanding warrants drawing interest. We believe that the law should be changed in re- gard to school district and university budgets to incor- porate the same regulation as is found in Section 6055 of Pierce's Code, which provides that the county commis- sioners shall have no power to create a debt against the said funds in excess of 80^ of the levy unless there be cash in the fund to pay such warrants. An exception should be raade to care for unforseen catastrophes. 10. th:^ ta:ca tioi7 of uttaitgible p roperty : We have discussed above the impasse wiiich has been reached in the taxation of intangible property as the result of the act of 1907 and the Supreme Court's decision to the effect that credits are not property for purposes of taxation. We eripressed the view that it would have been better had the matter of constitutional revision been faced and settled at that time, for there \7ill be, after all of these years of exemption, a considerable opposition to any proposal to change the status quo. ,CSI eeJ-sqioidrie x^leteYlav 10 ioiiiaih Icoxioa s nsxiV/ .i'es'ie^tnx -^ciivmib etnGiisvr snibnsi'a.tuo v-nso cJ -SI ni l)9sfi£rio 9cf isli/oiia w.sl erfJ d-^rlcf ©vsilscf sW -looai oJ ai'ssJbJja y;d"isi6vinjj bns JoxTtaJtij looxios 0:!" isij^s -slriTtaoo \&iwoo erli &£idi ssLivoiq rfcixiw ,9^oC a'soiaiq "lo arid- J-eniBB* *cf9ib e si&eio c* iswoq on 97-j:;rf IIsrEa eisncx? scf s'ioxii aaslnxf xvsL otii "ic ^8 "io aagoxa nx atinul bxca ncii"q9ox9 rtA .ainB'iiJSw xioue y;,sq_ oJ" bni/l: ax"l* nx rfaso . a9rIqoT.d"a£d"Bn n903io"ini; 10I si^o oJ- oh^c! sd bIx;orIs SJEIOTIATL"! 10 T;OI T/JO\T lHT .CI : Y^ . ^ BBxi xfoxiiv/ saasqmi sxIJ svocfs £)9aaiJoexb svjsxf eW ajB Y,^ieqoiq_ alcfxansonx Ic nolt.XBi -^di nx I)srias9i nsgcf 10I x,:^ieqoiq ion oia acfxl^sio tori^ toe'ile edS oi noxexooi) £)Iuo\Y a ir.di W9lv orli" i)98a9iq;: .noxd'j;:c^l "ic assoqiuq nolaxvei iBnoxoxrd'xd'anoo lo i-jiisn adt b^d zeiisdi nead svsri t9cf lllxi aiodi lot ,90ix;f ti-.dJ is bsliisa basi bsoGl need sldstebianoo s .noi^qmsxs "io ai^s-^ 9S9r::t- "ro LLb ibUb ,otfp auisis arid' ssnsxio ot iBaoqotc y,n£ oJ noid"iaoqqo 134. The theory upon uhich the case for some measure of taxation of intangible property rests is the principle that all persons should contribute to the support of gov- ernment in accordance with their ability. In so far as all of the citizens of the state ovra real estate or tangi- ble property located v/ithin the state, the use of such property as the basis of taxation satisfies this principle. But if some persons derive their incomes from property located outside the state, or from securities, mortgages or other rights to property located elsewhere, these persons are exempted from any contribution to the cost of government in this state quite as much as if they owned federal bonds. It is not sufficient to point out that this property is being taxed as suchisiaere it is lo- cated. These taxes go to the support of government in the states which are giving protection to this property. Such a person owes an obliga.tion to the State of V7ashington while he is a resident here, and the present tax law excepts him from this obligation. The same is true, of course, if those intangibles rest on property Virithin the state. It does not follow from this argument that such evidence of property rights should be taxed as heavily ,^ZL sivacaa SiTica lol seso sdi xicirfv; nogu ^rosiii silT elqionxiq sxiJ- al sJasi ■'id-iscroicT aldJtsrixsd-ni lo nciJ'£XG;t lo -V03 "io d"iocxqi;3 9x1* od' sJ-ucflijTioo ' bluocis enoaisq IIb i-isriJ a£ iz1 03 nl .y;JiIi:cfs tisxlj' dt ivr 3onef5iooo« nJt ;^^9^Tn:e -iS^^-sJ' 10 sisies Isoz avo e&^.ie od& 1:o enesiJ-xo sxii" lo IIb xlojJB "io sau 9rl* .si-Bos orfo niriJiw fisj^ool Tjii^qoiq slcf .slqioniTiq sixfJ' Sallslo-jja noid"«»5J lo aiearf srid- aa ^^J-ioqoiq Y^tisqoiq moil esciooni nisxli- eriisL snoaisq amoa "iJt J-ua 8S2£igj"iofit .eeicTJcii/oea xaoil io ,9d"Bd"r. sxIcJ' oi)X8*i/o bsijzool saorL' ,oie:ixiQsls bsJ"jsooI ^^leqo-rq oi adTf^xn loilJ'o io ;t8 00 Qixt cS nottudiiinoo ^^njs xaoil b9J"qni9X9 sib enoaisq ■\^©x£d' xi as liouti sb 9cfijjp sJB^a atdi' at inammevog Io .tjjo iatoq oi i nolo til: us ioci ex ^I ,sbnod Ixitobot becivro -ol 3X dx 9isxtvxiox;2 SB baxsi anxsu ex x:d"isqoiq atdi isdi ni d-nsi'ixiievos Io iioqqsja sdi oi og aaxed" saexiT ,l)9d"B0 • Y^ioqoiq aixiJ" oi ctoiioai otq srrxvx^ o-rs xfolxf"^ aej'sd's exlj noJ"aniri83Y/ !!:o eiBtS oiii oi notis^^tldo oe e9wo noaioq e xiouci a*q90X9 wsl xa* d'n9a9iq sxld' fins ,9i9ri *n9bxe9T a si sd sltdn ,8aiuoo Ic ^^nni px. srnsp. sxIT ,noli&^lldo aidi moix ,TXxf .9;t£5ja edi nxxiJxv; v.Jisqoiq no d^a©'! 89Xcf xgrtsj-nx 9aoxf;t "xi: rioxxe tsifd' ino[:iij^isi atdi xaoil ttcIIoI -on aeob il ^Ixvsgxi as i)9xi3;t od bLuods sid^ti ^jJ-ioqoiq Io Qoaebirs 135. as the tangible property located within the state. In the first place, regard must "be had for the fact that the property is paying a tax, and that a second tax as heavy as the first V7ould be excessive double teixation. In the second place, we must recognize the argument of expediency - on account of the ease with which intangibles may be hidden frora the assessor, it is unwise to impose a tax the only effect of which is to produce nothing. In recognition of these facts many states have introduced what is known as a classified property tax, under which intangibles are segregated and taxed at a low flat rate. Such a system has the merit of producing far more revenue fron intangibles than can be obtained by attempting to ta^: then at high tajc rates, while it meets the objection that a class of tax exempt citizens is being created. Minnesota obtained $1,363,504 in 1920 from a 3 mill tax on moneys and credits and a mortgage registra- tion tax of 50 cents on each §100. It is futile to propose such a tax for the State of Washington until the present sections in the constitution relating to taxation are rewritten. Since the legal view in this state is that intangibles are not property, it .eei nl .scfcd'a oxiJ- nixiiiw bsjjROoI xinocioiq aldlgn^J arid- e£ 6iit tBdt iosJ. end- toI bsii stf c^ex/ci l)aBS9i ,90£lq iattt srid ^CV£9x{ e£ XBCf bnoosa .s d^Brit bn£ .xfiJ- b ^nlVj^ci aJt ^^tisqoiq 9rH' rxl .zolii-.yzBi slduob qvIbsooxo 9cf bluovi isixl srid- es - \;ort9ii)9GX9 lo J'ngnu^aiB oxid" ssxnaooerr iauai sw ,90£lq Ijnoogs n9£>f)xri 90' y^ara egltfisn^cfni xxoirfw rUxw 9as9 adi lo d^ni/ooofi no y;Ino 9di xst b gaoqirJ ci oexwnu ax dx ,io389a3f srii moil .gnxrld'ofi aowijoiq od ax xioxr-'w "io d'oa'i'iQ 9VfiXl asi^is v^obbi adosl 039xid- Io aoxJ'xnaoosi nl ,x^d- ^dieqoiq h9Xl:x3SBlo b ar. nv/onsf ax d-.^rfw i)90x;bcidnx wcl £ d's i)9XPd Jbn£ ijsd^jss&iass ai/3 e9ldx2£iBd'nx xioirlvr lebau icI •%ntoubciq Io d-xism edi Bed nieiey,e £> douB .eisit i3l1 -o' beazsido ed nso nerfd agltfi^nfid-nx noi'l gurjevsi 9icii: 8;ts9m il 9lxrlw ,89d.si x.sd d^id d-js nexfd- y.sd' od- sf'-tJ"".nieJ"d£ Snx9cf ax 3n9sx*xo d'Qiii9X9 xed' "io easlo b dJDxfd- noxdo9c<:fo sxld s nci^ OSGI nt. hOd,ZbZ,L^ bsviL'^^tdo £Jo?9nniM .h9d.-.e:ro -end'axsaT: 9^X!sd-T:oa £ x)n£ Biiboio bas 3\;onoffi no xsd llltx £ .0014 r{oB9 no siaso OcJ Io xsd- noi;f od-j5d-8 sxfd" ic1 XBt f? dcij-?. geoccrq cd' slxd'Ux aJt dl ncxjjjjijGii 00 oxij al si:oxdo9a d-n939iq edJ ixJT.'u nodonixiejsv/ to W9lv Xa39l Dxfd- ©onx8 .fi9ddxTW9i sib ttoiis^xst oi -QniSslsT ii. ,T(;d'X9qoTq d-on ei& asIcfxsnBdnJt d'jBXid' ai 9;t*?d-a axrid r;x 136. would "be impossi'ble to tax tliem even at three mills on the dollar. We have therefore made no attempt to cal- culate the quantity of intangibles held in the state nor to estimate the amount of revenue that v;ould be derived from them. We do recomiuend, however, that v/hen a consti- tutional amendment on taxation is proposed, serious con- sideration be given to the question of the desirability of restoring intangibles to the category of taxable wealth, v/ith a vlev to the introduction of a state-wide flat tejc at not to exceed three mills on full valuation. The State _ Income Tax ; The modern state income tax rests upon the same principle as that which v/e outlined above in our discus- sion of the classified property tax. In this respect, indeed, the classified property tax and the income tax: are but alternative methods of accomplishing the same re- sult. The income tax is gaining in favor in some states, hov/ever, because it is a more accurate measure of personal ability, and also because it makes possible the taxation of those classes of persons whose income is derived from personal services and personal earnings rath^^r than from property. These classes, from the wage earner and the .dSl no eJ.lla ssirlJ J-i-* nsvs rasn'^ x£^ oJ- elcxesoqwix sJ i5luow -Ibo o:t ^fqxnaJ't^i on 9x)3m o-io'tDiexict svxsxi sV" .icXIoJfa srii icn sJ-fSja 9ii;f ni ijlsrl sal'iianistnl 'to *id"x«nj3Jjp 3*:!* 9i^Luo b^ri.130 9;f bluov/ iicrii aunoys'i lo J'n.L^onis srl- Q-J^ziLiise oi -i^snoo jb n9.fI\T d'sxii' .lars'^ori ,i)a9:.aitoo9n oi> sW ,ai9di iHoil -noo ajJoi"xov=i .baeoqciq si: noli&i^i no ^fnsiibnanis Xaxiox^i;^ ^J-xIicfa '1X39 ^ilj- io noxo3-3up 9jr{j oJ" n9YJC'3 e'J nox:f3i9t)J:r! ,x{i'l£3',7 aldsx^i lo y'^O'S^^s^ s^J" oJ aQldt^aBial ^aiioiaei io X3J- ;^jsl> 9bi.yr-'3izia £ lo aoxd'OJJooiJ'ai: arf;? o:t watv 3 r£d-xv; .fioi*si;lBv llul no allim oairiJ- bgso;-:'^ oj" i"on j.3 • x^T Qi iioon I ..Sy.'jJS erfT srasa 9Xii noqu stsai icbj enicoax aJ-sJa atabom orLT -ai/oaii) iwo ni 9voo\3 baaxliuo o\7 rfoxdw d^sril a.o 9lqiOiTxncr ,^■09^391 sixti' nl .xbj ^^d"i9qoiq boilxas^Io griJ- lo nois xsi- 9.^io0iij: arlcf bns yiai x^zoqoiq, bailiaas^lo adi ^bsebni -01 ariB?. 3dt snJ:riaJ:Icr;'iooc-.s lo aborld-Ga avs.tp.aistl.B J-ucf g-iis .aaJ'.jJ-e 9jaoa nl tovbI xxx gninxB^ ax xjsJ- a.-aooni: sriT . Jlxre Ifinoaioq lo 9iua&B:3. oia-xuooj^ 010m. b oi. is. gaujsoecf ^norevrod. noxd-sx^J e-iii glcfiaaoq a9ij3;a J^x 93ij£!09d" oale bn.z ,vil.Lr.ds: moil hSTXidj ■■31 iji.ioonx aaoilw 3no3i9q lo aoa?.siLo -jea-J ::o ctoil nsri* i^rid'si agninxsa Xanoa^isq i)ns 390xv'i9s X^aoaaaq adc^ boa i9ni-'39 93jsv/ 9xfJ- moal .asaa^Io 93ortT .^^xaqoiq 137. s£,laried clerk to the professional man receiving large fees, are exempt from all direct taxation under any system of property taxes. It is not possiole to determine the character nor the amounts of the incomes received "by the citizens of V/ashington at the present time. The latest published statistics from the Federal Bureau of Internal Revenue are for the year 1919. The present level of all inconies is much lower, and the 1919 figures are therefore quite unreliable as reflecting the current, or even the normal situation. With these cautions we present herewith the distribution of incomes as shown by the personal returns made for the calendar year 1919 under the federal income tax: (Over) .VSI msJ-a-^G ^r.a tobnu aoiiszyizi Soeiib Lls^ moil tqmaxs 9zs ,299*5: iQiosissdo edi oaianeisb 0* 9lc'ia8oq i'on ei J'l anasid-Jco eriJ- ^icT i)9vx909i soraooni adi I0 E3;}'fii;oirj3 srij- ion badsilduq ias&sl oxiT .amid- J-ngasia adi i..^ aoi-jnids&V to 91B sjunsvsH liJn'ie^Tnl "io JLTissiiiff Ibi9£)9'5[ sdd' moi'i aoii'siJ-^iJa aaaooni 11,^5 Io Laval ^tnaasiq; srPT .*2iei X'39\; 9rf^ lol sd-xijp 9i:ol9'X3j:ij s'la ao-xwsil GIGI •--'.+ on.r, .lorol riourn aJ: Ifimion 9xit n9Y9 ic ,J«8i'XiJo erii scid'oel'ig'i as 9ldj3il3*rnjj 9£fJ ilJxr/oT.o(i ^taasonq 9vv aaox^uso essnJ rld'i"?^ .noi;f.sud"la aniiio^'. I/j.iuc-; iii^j. orIc^ vcf rmorla as esiuconi "lo ."ici:;tu'.i"i'id"axb smoonx IsTg^gl ari^ lebau 9X91 xas'^ 'X^bnaleo edi tot 9iD.ani (•X9V0) 138. TA£I^ XIII . MJLIBER PIT RETURITS M:D DISTRIBUTION OF Pl^RSOITAL IITCOLiE BY SOURCES - 1919 . number of Returns: 114,322 Wages and Salaries $212,502,158 Business 63,654,832 Partnerships and Personal Service Corporations 16,807,550 Profits from Sales of Real Estate , Stock, Bonds , etc . 7 , 845 , 389 Rents and Royalties 19,927,776 Interest and Investment Income 14.816.559 Total Income $350,433,156^ General Deductions 24.946.296 Net Income $325,486,860^ Excluding $433,873 of interest on government obli- gations not v/holly exempt from federal tax. These figures show that in 1919,. $212,502,158, or 65,2^ of the entire net income of those who reported to the federal government, consisted of v;ages and sal- aries. Evidently there does exist in the state a con- siderable class of persons who are making no contribution to the cost of government under our system of direct property taxes. .8CI 851,205,212^ ael'xjslea i)nc aassV/ 358,i'dd,5a aaanxaua: 02c;,V0S,9I anoio-.^ioqioO 90ivT9" IssK lo aalsS iaoii aJxloiu aVV,?2G,GI 39iilB-^ofl i)nJ3 atnsK Qea.5I8.J^I arnooni 3Q 2.dJ^6.;^S snoxi-ojjJbaa Isi&aaO ^03a,D8^,a2S^ anooni J-sTI .xs^t Isi^bsl laoil jq.msxe -^Xloriv/ J" on acicii^^.^ , sex, 305,212$ ^QlQl al i.-^df worfs aaiugi'i aas.^ Jbscfioqs-i orlw SBorW 1o saooni J-sn 9^x1x13 sdi 1o ^2. JO io -Isa bciB aag^w lo iisJ'axanoo ,J"n9mnievo3 l3iQ£>9l edi oi -noo B etsia sdi' cti. isixa asolj 9*x5riJ- TCld^ns bjiv'^: .aaxas noxJ'ud'xijnoo on anx:i3a ei& oriw anoaigc lo aesLo sldsioble ioeilb 1o i[i9d"a^e tuo iQbnsj inesaaisro^ 1o d'soo edi oi 139, The distribution of the §325,486,860 by incone classes is shown below: TAELK XIV . DISTRIEUTIQIT BY IITCOIffi CLASSES . # IncoLie Classes Taxable Sxerapt number Incorae Iluciber Exempt $1000-2000 2000-3000 3000-4000 4000-5000 Total 44,224 $ 63,870,435 11,082 $17,417,939 18,623 45,292,820 11,897 27,072,990 12,015 41,373,033 350 1,206,495 6.298 27.961.595 87 3 73.744 81,160 $178,497,683 23,416 $46,071,168 $5000-6000 2,701 15,139,064 6000-7000 1,860 11,921,753 7000-8000 1,208 9,005,120 8000-9000 814 6,860,409 9000-10000 596 5.667.258 Total 7,179 $48,593,604 Totals: 88,339 $227,091,287 Over $10,000 2,567 $ 52,324,405 #, These persons vere exempt under the present provis- ions of the federal income tax law relating to deductions, etc. .Q^l ,TIXJLJSAT . 8;i38AJ0 'aiQOTII Y^ :iOITUaIHT3IG iaasxZ laajniiTI 3;.xoonI ^aaxr ujiPI 32isdOS,I ^M\SVo Sai.IVO.di'^ dlf^.SS S8d.?ef^,8VI$ Odl.ll saoonl 39336X0 e5G,?ii^,vi$ S30, II aej>,ova.ss :?; K'^s.^^^ ooos-oooiI oee,s?o,Ts ^^qs,!! 028,ses,a^ 5r.d,3i oooe-ooos OeS SSO.STo.I.^ 3X0, SI OOOt^-OvOOS __vs aeo.ioe.ys ees^a oooa..ooQ^ IjqJoT i^dO,2£I,ei IC?,S £ar,ise,ii 056,1 OSI.aoO.G ■ 8CS,I 90i^, 068,0 f'lS 693 eo{',i^s^.sa $ V6a,s oood-oooa| OOdV-COOd 0008-OOOV 000€-0008 OOOOI-OOOQ ^oa,?;ea,8*$ 571, T I«J-oT ?8s , ISO , vssiS; 9SS,88 :aIsJ-oT 19V0 000,01$ • sivoig ;trt939iq arfJ' labfiw Jqrasxs aze .' enosisq; sasxiT 140. Two things stand out in this a.nalysis: First, the large number of persons reporting who had an income "below $5000, There were in all 104,576 such persons, and their total income was $224,568,851, or 69J? of the total income. But 23,416 of these persons v;ere exempted from the federal tax by reason of the personal credits, interest on debts and other allowable deductions, the to- tal amount of income so exempted being $46,071,168, The second significant fact revealed by the table is the large proportion of the total number of those reporting in 1919 who had incomes of $10,000 or less. We find that there v/ere 111,755 such persons, or 97.8^ of the total number who filed returns, and that they reported 0273,162,455 of income, or 83.9^ of the total income. Washington is below the average of the country in this respect, for only 71.01^ of the incomes throughout the United States were below $10,000 and only 56. 14,*^ belov: $5000 as compared with 85.9^ and 69^ respectively for this state. Further, we find that in the country at large, 47,94^ of the in- come was derived from wages and salaries, as against 65.2^ here. It is evident from this survey that the bulk of the incomes in Washington are relatively small in amount. .0^1 amooni nc bsd oiiw anxi"xoa3-i ?.no3ioc 1o i9aau;« ssisl arid- .anosiaq dous dVd^^Ol lis nt oibvt siqxIT ,0002$ wolacf edi lo tf^Qci 10 .ISS.Sda.i^SS^ 3bw aciooni lijJ-od' lio.-iJ- brus ,ai'li)9TC0 liinoeisq aiij- lo noajssi icd :c3i Xjsisbsl od& moil: -od" arlj- ,anoi:i'Oi;i)9i) alcfs'volls i9xid"o bnri sd'cfsb no i-aoiei'ni sxfT ,86I,IV0,d^^j cjiiJ-^ • -^^9>^q-ii9X3 oa Oi^iooni lo inuoiij i>jj ssijsl 9ili ex aldBd- sri* \d i)9lj39V9i iosl vtrtsDXlxnsxa f)aoo93 QLQL nl snx^ioqgi asoiid- xo larfirujn Ib;^oJ" 9xiJ lo noxJ"iOc[0'Cii 9'Xix.j J^rW i)nil 9W .aaal io 000, Olf. lo 39;-3.oonx -j^jii od.-t i9cfoK/fi iBd-od- arid- Io ^,G.?e mz ,enoai9q rfowa 33?, Ill oiox Io 35^,S3I,£V2v; 69d"ioq9i vgxfcf o'srCJ- brtjs ,anix/^9i boll"]: o-nTw ax noJ-artxiiafiW .9i:iopni IxiJ-oi- '3i{j" Io ^^^,ZQ \o .^.j-ouux ■^Ino io1 ,d-09qs9i axxi^ ni. 'iicJ-ni/oo 9xfJ' 'to 93bi9V£5 erfcf wol9cf aievr set&^S, bgd-JinU 9ri;t cfuorl^uoi-'ld' asnooni sdt Io ^U*^*-^'^ rii-iw i)9"iBqiiioo bb 0002^ vrolsd" *?M.3G vino ins 000, 0I§ wolacf ,n9rijii/a: .gJ-sJ'a exiiJ- 'xol icl9vxi^09qa9i 5^66 bnB v^9,S8 -nx 9rlJ "io ^^^S.V^ ,o^zsl is ^TidTixjoo 9rf;t at J-srl-i- bnil: aw c^S.aS *arixB3JB as ,a9ii£ls8 bnis aasijw nro-xl b9vxi9b asvv oinoo ,919X1 "io jflycf sxli- d-Bxfd- -yigvii/a axrlJ- moil inabivQ ai cJ^I ,d"niionie nx IlBma ^cLavLiBlet 9i£ nocfanxxlssW ni 89mooni 9rid- 141. and are composed in an unusual degree of wages, salaries, and other returns from personal efforts and services. These proportions would doubtless be even greater today than in 1919, which was the peak year of incomes in the United States, These facts are of great significance in any decision to resort to the income tax for state purposes, for two reasons: First, since the bulk of incomes are small in amount and consist largely of wages and salaries, the rates must be low. Second, since incomes are small and the number of persons reporting is large, the cost of administration v/ould probably be relatively high. A similar analysis of the data from Wisconsin shows that 56,4^ of the net income returned by the citizens of that state in 1919 consisted of wages and salaries. The incomes below $5000 comprised 62.5^ of the total and all those below $10,000, 81% of the total. The average of Wisconisn taxable incomes below $10,000 was §2,945, and the similar average in Washington was $2,570, The con- ditions in Y^siconsin, as shown by the di stribution of incomes, are therefore somewhat more favorable for the use of the income tax than are those found in Washington, .1^1 ,aexisl4BQ ,a93i3w lo asi'geb lAUsunii hr ni baaoqinoo ens bas ^sbod" rotsei^ nsvs acf aaalicfijoi) LXuow attoltioqotq^ oaerlT aitt ni ssrnoonx lo isar ?Ls9q gyiJ aar/rfolriw ,QIQ1 ni njsxfJ- fli 9on£oi*iJtriai3 iaer^ -vj .1.3 a:}-o.^'t aas.-iT .aoisiB becMnU ,a93oqiuq sd-sJ-a nol xs^ anoonx stIJ- 0^ ^loaai: 0- aotetoeb y,n3 :ano339i owi' loT: iii II.eaa 9-iJ3 aawoorti lo Tflucf srCJ- soni-T ,d-?'ix'3: aai&i edi .asiislsa brtB aaasw 'io x^s-qibL j-axenoo ibri^s ;J-ni;onis ,woI 9d i"3X;i!I Tiadciijn Off;}' bae Ilsnfa aii? aarnooni: aor.'ta .bnoosS noxd'£;i;t'aJtnxjraJb£ "io J"aoD sxid- ,3giJ3l ax anxJioqs'x anoartaq "io .ilglxf ^lavxJ-BXsi eo ^Idsdoiq bluow nienooeiW nioiT: s-tsb axfJ- "io ai^^l^na Tcxslixnla A QftaslJ-xo 9:1*- \;cf bsa^iJj'S'x swooni Isn 9xi3' xo S^^.SS isdi av/oda .a-axisljsa i>xxs aagBW lo Ijsiaianoo eiSI nx sd'Bi'a tsdi to i)rii3 Latoi axij- Ic t?a,3a iJ33xiq--noo OOOdrJ. wol.od asnooni 3rI7 9;-j^i9Vi3 9i£T .I.si'OJ 311^ 10 'J^I8 ,000,0I§ woxQa osoiiJ IliJ Jjnjs ,3f^6,S?i; asw 000, 0I§ woisd aaaoonx aLd&xa) nainooax?/ Io -noo 9xiT .0V3,S§ asw nod-jjaixia-eW riJt sssiavs iBlxaia &xio lo nox-tucfxiia xb sn.i -^d rrworfa aa ,ni:sr:ooxa\7 nx anoiJxb sjrft lol" slderrovsl aiora J^ariwaaioa aioloiaxid' stj^ .eaxaoonx ,noJ"anJ:rfaB¥/ ni Mxrol aaoriJ^ 9ixi n&di xsi Siaooni 9xf;)' lo 9ajj 142. in that a less proportion of the incomes are below ij^bOOO or below $10,000 and a smaller proportion of them consist of vrsLges and salaries. Moreover, the income tax is distinctly an urban tax. That is, a very large proportion of this tax v/ill be paid by those who reside in urban districts, where the large accuurulations of wealth and income are normally found. In 1919, 31.4^ of th6 federal income tax was paid from New York State, and of this it has been estimated that more than 80^ was paid from Hew York City alone. On account of the deductions and personal exemptions allowed under every income tax the rural sections in any state contribute only a relatively small amount. Under any equitable system of distirbuting the proceeds of such a tax in V/ashington, the benefits would accrue chiefly to the cities. It has been demonstrated also, that neither the income tax nor the flat tax on intangible property will operate successfully except under the most favorable ad- ministrative conditions. In fact, the general verdict as late as 1910 was that state income taxation was and would be a failure, largely because of the administrative defects. Wisconsin changed this verdict by placing the income tax under the control of the state tax commission .SM 0003$ wolscf 01S sonoonl Bdi to noioioqoiq sosi s iatii al taianoo rasrf* lo noitioqoiq i9llJ2r:B s bas 000,01:^ wol9d' to nacfijj as '^li-onid-sii) ai xst arioonx eriJ- .lOvosioLI Iliw KBi BirU la aotiioqonq, agifil \:i9v r. ,3i J'^n'T .xei" ,bauo1 ^Ilsnnon ais sciooni i^as rid'iBaw lo artolt-slwoujooa 931^1 aioa'!: I)x.sq 3ii\v xeJ- oraooni lsiii:>be'i Qdt I0 3^I».XS ,eiQI nl 9iom d'Brfd' Jjsd'siaid'ao nascf asil J-i sirll lo irna ,9jd8 jIioY wall trijjooo^ nO .enols -^d'iO jirtoY wal-I aorrl blsq ajsw ^08 riBrfd' isijnx; hawclls a^^i:^q.•a9x^ lonoaisq brt.T enoitsubsb crfJ- I0 oiudi'xinoo acTBia \;ajj ni an'jx:i"0iJ3 lisix/T siW xaj sraoonJ: ^,iajT9 :a9-s^a sIcTisd'Jtups ^^ns isbnU ,taiJoaz Ilsiiie TC-Csv'i^sIsi s \lao ^aoi-gniiie&'if ni. x^i s rfoua "io 3i)390 0'iq sil^ igniJ-ycfiicfaib to ,?Qlii.Q sclj- o:t ^fltoixio sw-xoos i)Iuow acfltsriacf 9xlct- 9i£J' ioxiJl9n J-xjriJ ,oaIj.s i>9d'^:id-anofTi9b naacf sbtI ;tl Iliw lii'xsqoiq 9lcfxancd"ni: no xe* c^eI'i 9x1^ aoa xx>d" smooni -b(3 elcisiovjal iBora edi i9i)ny J-qgoxs "^Ilutaaaooua o.J3i9qo ioibiQr Isisnga arid- ,ioi3l nl .anoUxxinoo avijai-tainiai bns 3BW noxjjsicad" 9iaoor:x ai/iia iadi a.i=jw 0I6I aja 9;tsl ax; 9VxJ-^'id--?i:ni:ntbi3 arii- "io 9 3Ufi09a ^^laaisl .six/IiBl s aJ Jsluo^v 9rf;t snioBlq Ajcf iolbiav aid^ /jsj^naxio nxariooeiW .sjooleb noiaaxiiitaoo xsi' 9i-'3*a 6rf^ lo loiJ-nco sxld" labnu xsj amoortl 143. and providing new and comprehensive administration machin- ery. All of the states which have been willing to follow the principles of income tax administration first developed in Wisconsin have found the income tax a fairly satisfac- tory source of state and local revenue. Unless a state be willing, therefore, to give most careful consideration to the development of sovmd and impartial administration, it were better not to attempt the income tax. We find that certain conditions are essential for the best results under the income tax: First, a very effective centralized administra- tion; Second, a fair degree of concentration of wealth and incomes, for the bulk of the tax must come from the larger incomes, if sufficient revenue is to be produced to justify the tax. We hs-ve recommended the esta,blishment of a state tax commission to be composed of competent persons, and to be endowed with administrative autliority sufficient to effect a reorganization in assessment methods and gen- eral tax administration. If this recommendation is ac- cepted and adopted as we have conceived it, the central .z^l -nlxioBia aoit-atjaiaiviiha eyxanerfanqnioo bna wen ^gntbivoiq bna wollol oi gnxllxw riaacf svsfi xisJrrfw 33;tcJ'e sxli' 1o IM .^19 Jbeqolayst) cfoiil noiJ'Bid"3inirni)B >ujd' araoonl lo aslqioniiq &di •.ontait&a -^Inijs'i a xsJ" axnoonx srtj- .bnx/ol overf nicinooaiW rtJt noxd'sisbxenoo Iwlsiso Jsoni avig oi ^eiolsiedi^ .SniCIlw 9cf ,noJ:J"3ad"!3J:nxai>B l3id"iBqaix i)nB Lm/oa lo d"n3raqoi9V9i) sdi oJ" .XJ3^ Sifioonx 0x1;^ tqin^ifa ot ion teiieo ozevr ii 13x^09389 01S anoiilhcioo axad"i9o &3tii bnit e^I ::csd' eiaoonx eiit tsbnu ai'Ii/eei ^a9d 9il;t to'i s'Liainizzba bs:n9m2ioo9i gv.xiri 9^ ,anccT9q drrojoq^ic:: xo i)98oqraoo 90" ocJ" noxaaix-mnoo xjbJ- aisoa d'ri9ic±':ljj8 i^^iiofiitjja 9vx*sii'3ini.TL£>s ci&lw bevrobns 9q' o:t briB -n9s .5ns aborid-sra ^nsmasgass nJt noij-^sinsr^tosi b J-09l"5:9 ot -0:3 ax noid'j3X).^3r.raoo3i axrid- "il .noxJ^'iJ-ainimbii r.Bi Ij319 lBi;tn9o oxif ,j-x i>9vx9oaoo gvaii 9W a£ Jb9i-qobB buG b&&qoo 144. organization would be provided, and there would remain only the special framework for the introduction of competent income tax administration. The latter would involve the organization of the state into districts and the erection of income tax assessment machinery in each district, under the absolute control and direction of the central tax comiTiission, The assecsors of income would need broad pov;ers for the discovery and assessment of incomes. It is clear that such an organization v/ould neces- sarily be expensive, although the cost must be considered in relation to the yield. Experience in Massachusetts and iTew York indicates that administrative cost of the income tax v/ill be about Z% of the tax collected. It v^ould probably be in excess of this ratio for Washington, We have already presented the general situation in Washington, v/ith regard to the second condition for the success of the income ta.x, namely, the concentration of v/ealth and incomes. There is a wide diversity of econ- omic conditions in the state ranging from the great areas with sparce population and low incomes to a few urban centers .:^i^I nisaai Lli/ov; aisrj.J' bciB .babivoiq 9Cf bluo\'i noxJ"BSXftB3io driei-aqnioo 'lo aoiiouboiinl adi -lo'i ^fTowsfiioil Isioaqa edi y^Lnc 9xiJ- avXovni bluoxi -iqUbI sxiT .noid-J3lJainia±is xai ©aiooni noxioaaa oxiJ- bxia ac^oiij-aii) o^ni 9^s:ta arid" "io noiJiSsinBaio laJbn/j ,J-oiiJ3Jtb iIosq ax ^jienxnaism ^naniaaasos yjzi saoonx lo xs* iJoiJ-noo eds lo aoiioatib baa loid-noo s-tx/Ioacfs 9x1* i>«oicf i)99n foli/ow amoonx lo aioanaasB 9i£T .noxaaiiimoo .asiaoonx lo ^a3fii3a923B i)fi.s xiavoo^ib Oi'J lol eiawoq -Bdoan bliJo\f noxiBsxnas'xo as xloua ^Bri* :tx39lo ax *I bsiebtenoo 9d" tai/ra &aqo sxid- rlQiJoriilJ^ ,dvxan9qxo ad ■^jIxiBa aJ-J'98iJxfoBec£:.I nl aonaiieqxE .blaiii ecii ot nol^-clsi ni axio lo osoo ariiaiistniitihs isdi aeisolbni >lioY waT! bar, tl .b9*09lIoo xs* axlj- lo S?,£ iuoas gd" llv.y xci eaooni .noJanxriaflW nol oxJ-js'X atdi lo asaor.a ai. aJ TiXa'acfoiq bI;jow aoid^Bifiia letonaj^ arid- badnaaaiq libesils avsri 9Y/ 9xlt lol iioxdxJbnoo bnooaa arid" o^ jDisaai rij-iw .aod-aniilasV/ nx lo noxo3icJ"n8onoo sri* ,\^l90ifin .xad aiiioonx erld lo aagoo.as -iioos lo ^dxa'i9vxi) abxv; s ax sisriT .aaaoonx bixB adlioav/ a.S9iB dB9ia add xaoil gnlsiiai ad'sd'a oxiJ- nx aaoxJ-xbaoo oicio anaJTcoo nsidi:j vsral b oJ aaraoonx \'wl buB noxdBljjqocr 90'r«qa ridiw 145. in which the bulk of the capital resources of the state are concentrated. The income tax would be of very lit- tle advantage as applied to the rural portions of the state, v;ith the exception of certain snail areas in which inten- sive agriculture has been developed. These areas would probably produce little, if any more than enough to pay the cost of adTxinistration. If the income tax could be applied to the cities alone it v/ould be fairly productive. But its administration must be state-wide to be effective, Furthermore, a large proportion of the incomes of the state consist of wages and salaries, the average of which is relatively low. It is true that the income tax is a means of reaching these classes by direct tax- ation, and the other methods of accomplishing this result are less satisfactory. i^ut on the other hand the aver- age return would be small, the tax on such small taxable income returned by the salaried and v/age earning classes would be at lov; rates , the yield would be low, and the administrati^ye expense therefore relatively high. Under these circimstances the public treasury would gain little. In viev; of these facts regarding the whole sit- uation, v;e are of the opinion that it would be unwise to .eM 9&3ia adi "io ssorruoasi iQitqao orii lo 2[Iucf axi* xfoJtrfvr nl -J-li \^'i9v 'io 9d jili/ow xsJ- 90X00111 9ilT theiatinoocioo oi£ .s.tjsd'e sriJ' lo anoiJioq Ib*j:jji srlJ- o:^ bailqqs as sasdriavDij sl^ -nsJ-ni rEoiifw nx a.soifi Iljsna nLsi-iso lo noxJ-qsoxe siLi rfJ'iw i5IJJo^T 3.091X5 saaxiT ,i)6C[0lev&.') naecf ?,3ri a-xjji'ljjoii^-c avia M^q oc^ rfax/one ixsri^t siora icnis 11 .al^cTil souboiq •\iId.acfo'sq ecf bijjoo xbJ SuToonx sifJ "il .noi j'^td-ainxobs T:o d-soo arid- ,sviiouboic 'iLiiB''i ad" bluow il snoljs asl^xo orfi o.t bsilqqB .©vid'osl'is scf od' sbxw-aJ-sJ-a 9cf tauiz noJtiJBiJ-axniatbB ad^x c^i/S 39ii!oonx sdi Io aotitoqatrr ei-n^isL .3 ^eionrtodiiifl ssu'jisvij oxLt ,a9iij;lJ3a sj,...-. -.j :-r: Jo falsnoo ad'sd'e arid' ^o smoonx arid- d-£rid' sjj-id- si il .wol Y-Csvxd'Bla-x ax doidvf 'io -xbJ d'osixb x<^ 363ssIo 939r{d anxxfoBS-x ^o aoBsn a ai xad" d-IWRSi airid- anxriaxlqxaooos Io aboxiigm isxld-o odi bnr .noiJj^ -iovi5 orld" bnerf laild'o arid no due. .^aod'os'iaxd'aa 3<39l aiis 9lci'£>cQd' Ilijnta xfoua no xsi snd- , Ilaraa scf bIi;o;7 nix/dao: 353 aasa/slo 3^ cf" ■o 933?/ bns baxislsa aiid" Z'-^ bem:u:^3i anoonx Slid' bfiB ,woI stf bijjow bl9iY ^^'^-^ 1 sod'Bi wol is ed blxrow tsbn'J .ctglr. viIsvid-Blai 9io'i9i9xld' sansrxa avid-sid-ainiialiB .gld^d-il rriag bluov/ Y^J^s-'^Qid' oxldxrq srld- aQonsdsEtuoixo aaaxit -d-xa 9lciiw 9dt gnibiB^oi ad-o^l aaorld- "ic W9xv nl oi 93±wnjj od blxrow d-i d-jsxid- nolnxqo 9ri;f to 9i& evf ,aoiisu 146. introduce the income tax at this time. We approve the principle of the personal income tax under suitable con- ditions, "but v;e do not consider that these conditions exist at the present time. To a large extent the same ends may be met by the introduction of a flat tax on in- tangibles, such as we have already discussed and approved. In our suggestions for the future development of the statefe revenue system we have proposed that at the proper time a personal income tax be introduced. We feel that we are confirmed in this conclusion by the fact that the federal government continues to im- pose very heavy rates of taxation upon incomes. There 'i is no immediate prospect of a reduction in the federal rates, and we are reluctant to recomi.:end the introduction of additional income tax burdens v/hile the existing fed- eral burden continues. 11 . GgiTERAL SAU^S TAJZ : It is the unanimous opinion of the committee that a general sales tax is not a proper tax to be used in the State of Washington as a part of our revenue system. In this connection it may be of interest to note that the members of the committee on tax investigation ,dM -noo 3ld":3tiU8 i9i>n7 ::.s* oniconi iBncr-TeCT edu *o slqioniicr 8aoiJxr;noo sasilj jsiij laoxanoo ^fon oh sv/ Juo ,8rioxJ"i.b 9.-063 odi icisixe 931.31 jb oT ,9iiitJ' inasoiq srli ir^ isLr.9 -nx no r.Bi isLI s lo noiioisboiint Bd& \;cf i^m 3cf ^^n aJbns .i)3V'oiqqi3 bns i)93£jJ03xj ^bxsailB aviixl 9'.7 aa lious ,e9lcfX3nBd" d9*Bja griJ la J-n9mol9V9i) 9Ti;d'x;'i grfi' lol snoxi-asQsua luo nl Sfflid" loqctq 9rft J"x3 d-BxiJ- x>95oqo'rcr 9yj3Xi srr :v.otey,a suzbvsz ,baouboiini n33 s d-sifi .xiie^s^e strnova-x ix/o lo d-isq s a^ noi^nidas^W I0 otaiS 9rfj nJc ei'cn oi- d-esiaj-nx I0 9o' y^-^ *-£ noicTognnoo aJtilJ- nl nox^.^3Xd-83vnx r^:} no ss^J-xatTioo grit 'io aigcfagxn gxtf d■.^3rid■ 147. of the State of Oregon concur with us in this belief, both committees rejecting the principle as unsound. This de- cision was arrived at after a careful study and consider- ation of the principles involved. While both comniittees are not prepared to go to the extent of stating that the sales tax principle may not be a proper tax for the federal government, its use by a state cannot be justified by any of the arguments in favor of a national sales tax for the following reasons: 1, The sales tax is a consumption tax and is, there- fore, an added business cost. By this we mean that if ^. the State of Washington alone were to adopt the use of a sales tax, either on retail sales or upon the products of the wholesaler, its application v;ould increase the cost of commodities in the state of V7ashington as against the same comraodity in the surrounding states, and would of necessity make it more profitable for the average cit- izen to do all the business possible with mail order houses and other foreign dealers, rather than with his local tradesmen. .Vfrl -3b etcLT .ijnuoanu bh alqionxiq eciS aniJ-osQai aeoiiiiwxoo -loblsaco ':-riB ^^hisia luiai&o 3 loJ-la J-b bo-viiis s.^w noiaxo assi'd'icaaoo iii"Oo yxxxi.j ,i)9Vj.o."ax aelq_s.oaiiq sxij io noxJs sriJ- isdi' snxJ.3^0 "io iriscfxo dxld- oi' os Oj i)9iJ3q9-xq J-on 013 iBishal orLt lo^ .lad" leqoiq iJ 9cf Jon y;£m alqxonliq xsJ- aslae ^fU8 Y<^ bsitiizul 90 i'oariso 9^sJ"a s ^cf eaw aJx .ineniniovos 10^ xjzi a 9 la a LsaoitBa b Io lovel ni GJ-ngcowais srii Io :3no3B9t£ anxwollol 9Xf^ -9'i9rf^ ,ai arus :csJ noxd-qnuianoo s si ;osJ' 3 9lfi.? arfT .1 li J-sxiJ" asooi. 9w airict' ■\cS .d'aoo aasnxawtf bsbbs cia ,9iol J3 xo 9ai; ssii *qoi>J3 o;}" gigvr 9noI« not^niriaBW "io 9c^X5d•2 sdi ad'oujoiq aa'J Jijqxr 10 aels-^ IxSjsi no -lorfcH^ ,zs^ aslsa 9xiJ' oas9ionx IjIuow noxi"' oilqqs aJ'x ,:r9lJB89lor£w adi Io *anx.s3J3 3£ noJ'anixia.sW Io 9 Jed's orW nx asxJ'jtiJOf.itaoo Io d"3 00 filuow i)ns tSsiaia 2^ibnuo^iU3 srW nx -iJii)o;.rsoci eoxea 9:io -J^xo 9afii9vs 9xiJ' 10I eLosStlotq eiosa. Si. axfint ^itaaeoecs Io a9exror[ -xebio Ix.gm xi^iw 9lcfi33oq aei^rriaircf 9jCl;t lis ob oi n9sx Isool axri ditvT nr>df 'xeric^iDT ,a'X0l39i> nsis'io'i i^dio bns . asziadbaii 148. It is urged that the sales tax, like various other taxes, is in any event passed on to the ultimate consTxmer, therefore, why not place the tax definitely and collect it in the first instance from the consurner? The following illustration may he used to shov/ the effect of such a tax, if our state undertook, a-lone, to make use of it. We hs.ve in mind its effect upon the small manufactur- er who manufactures an article that goes into the creation of a subsequent article, for instance, the manufacturer of Ivunher, The sale to the "box manufacturer must be ac- counted for. In turn the box manufacturer sells his boxes to a jobber. The tax is also applied. The jobber in turn sells the boxes to the fruit producer or the salmon industry or the coffee distributor, and the tax is added, and so on down the line. Everyone knows that the manufacture of boxes is an industry that is necessary in this state, and if the tax so accumulated brings the price to a point where the manufacturer cannot make a profit as against the boxes made in Oregon or Idaho, he will be compelled to enter some other line of industry. .8^1 stsiaid'Iu arlJ" od" no bsaaBq i'nevs Tcnc nl 3i ,39xsJ' lodio bos '^Isd-inilo^ x.gd' 9il;t aoalq ioa ^riw .siolaisdJ- .isfsjjanoo srfT ?i9:'.tixanoo orli' r.io'x'i oonsd-anx iaitl 3di at. it. j-onlloo to ioella -adt woife at beau scf Y'Sia noiJ-.s^d-8L'IIi: snlwoXIol "io 930 92l.'5iiX od" .anoLo ^^Looiiohnu sints luo It ,xj8^ b riowa -luJo^xUfLBiii IlBina Slid' noqu J-oalla aJ'J: l)aini ni o-^sd 9T7 .d"i noiJaaio grf* oJni 3903 d'srfd' 9loiJ"is ns esiuioalaasir. odvr 'le i9TUd'o^"5:Jjnj3rrt gifd- ^eonsient 10I ,9lDxiiB cfrtgupaacrixa a lo -OS 9cf j-auni T9iJJd'0£lunBci xocf edi oi else oifT .lednul "io airf 3ll9'3 ig'iud'OJs'iijnBxn xocf 9ii;t ntut nl .lol baiauoo I9cfcf0(i 9r[T ,i)9i:Iqq5 oala ax XBt 9rIT ,i9dcfoc s oi aexocf norolsa 9iit 10 iooi:boiq_ iiL'tl odi oi 39xoa sxlJ- sIIo?. niud" nl ,i>9bi)fi ex x£t Bdi i>as jiod'ucfxi^axf) gglloo grid' 10 x,'^iaubnt .anil srfd- cmob no oa bnB ax aaxocf to siutosTiisn&m edi isdi awonsi snC'iTisvS 9xld" Ix bns ,eis:js axrid" ni ■'^ijsaagogn ai d-£;xld' •^iJ^wfcnx ne grid- 9i9rlw Jnioq e oJ- aoiiq edS a-^nkid b^tslismuoos oa read" 39xocf Qdi d'anJts^.s e.& d"xloT:q s 9>[b:ji d-onnao igiud-ojstuftGrn I9d-ns od- i)9lIoqflioo 9cf IIi\7 9il ,oxteJjI 10 noggrrO nl gbisa ,X,'^iaubat lo aail tsdio 9xno8 149. 2, The retail price of some articles of local con- sumption is fixed not only by the law of supply and demand, but by the originator of the article. Were the retailers required to account for a sales tax on this class of mer- chandise, the merchant would be compelled to pay the tax on his gross sales, but being unable to increase the price of the article by the amount of the tax on account of the policy of price control, he would be obliged to add it to the price of some other article carried for sale. This practice, if carried out to its logical conclusion, T/ould undoubtedly force the merchant to raise the price of all non-price-fixed articles in such amount that the merchant could not meet competition, 3, Cost of Collection : If the sales tax principle only meant the fixing of the percentage to be paid to the state, without the necessity of creating an immense state bureau vrith agencies in every county, city and hamlet, with the necessary force of inspectors, a,uditors and accountants, the system might seem more feasible of enforcement, but it appears to the committee that the enormous amount of machinery necessary to properly collect and administer the tax is out of all .8i'I -non I.S00I to a9loiJ-i£ aaioa I0 aotiq IxisJai 3x£T .S ^bnsziOD oxic -^xqq^B ^0 viBl erii xd \lcio ion bsxxl ax aox^qaua ai9lxj3;)-9'x 9xid- sie\" .slDid-ia aric}- lo aotanlaiio edi -^cf i'jjcr -ISM "io 88.3I0 airid" no Tisi aslsa a 10I d"niJooo.e ot boixi/poa xsj 9iii •'^eq oJ- asllsqmoo su .jlxrow cfoBrioien axlJ- .oaxbci^xlo 90xi>r exfJ- sassnoni oJ slcfsni; ^niod tud ,sslaa aaoig aJtrl no Siii lo tnuooos no 7ZBi edi "io tnuosui ecii ^cf sIoii-To orfJ- I0 J-i: .)bji oi I)93iIcfo sd" blue?/ od ,Ioi.tnoo aoxiq '10 ^oiloci ,oIfi3 lol b'jxiiso 9loi:d"iJ3 laxlcfo smoa xo 9oJtiq exfJ- o>t ,noxax;Ionoo 1^0x30! alx oi ciso f>9Xi'Xfio 11 .soxJ-oeiq alxfT 9oxiq edi 93XS'x oJ" jnsxioigM oxfJ" 90'xOi T^lbgo'ujjobnjj bXucw sxtt i3di iauoaiB rioua nl 39loxJis baxtt-eoiiq-aon LLb Io .noxnxi naiaiol io1 radaisL Jo bsIbb y<^ beiaoseiqez ax .9d-3cl-3 orli- Ycf bar^si ad neo iloxiiw lo snon ,90i9raaioo sj-sj-a -nx iBqxonxnq luo "io d" -'-'.+ noiJ-^sisJbianoo ocfni s-Jsi avt n©riW rioxxiw .^xxncl bas isQdvi .rfax*! .lacfriUJl ,'^l9ntGn .eeiiSeub .asoiucagn iBiJj^sn nwo ii/o "io giisra 89ls3 sxlJ" y-J-^o Jngagiggi ,9d-j3d-3 axfJ- Io 9i3xad-i;o bloa al sasd-nsoiaq isJ-bsis srfj- is1 -(d Io 39lBa Io 9nu/Iov izei2 edi bns ,'9la£XBJ"niJ giolotariJ' ba.i -cfjJ3 J-on oalfl ,9i9xlw9al9 beouboiq 9d-Bd-8 aisLi nx obBca aboos ed& Io ^lavooiln^nu ois ooiiLanoo edt ,noi.Saxsi oJ" ioal isq svjfcl 10 ,99'x:iJ' , ow^ ,9no Io xai asljsa a i::d:^ noxnxqo 9d"BJ'3 axrlJ' lol 9iijai39xn aiJoiJ"3B3Xi) y'is''' JS 9cf £)Ijjow ,J-n60 9Jjr£9V9i i^x/ons 90iJboin- :ton blL-ow mcuJ nx hn.c- , d-qobs oJ- .noxJ'ooIIoo ^iJx 10 J'aoo siid" ■\jiXjai/t o^ (OVS .q ,e .Io7 .ni^allx/a.A ,T ,K) 151. 12. CHAITGE IIT MSLSSRSHIP OF COUITTY EOAKD OF aQ.UALIZAT lQH : The laAY now provides that the county assessor slaall "be a member of the county board of equaliza.tion and shall be the clerk of the board. We recomLiend that the board be composed of the county commissioners v/ith the countj"- auditor acting as clerk thereof. Cities should be allowed to retain the representation on these boards which is now provided by law. This remedial measure Is suggested by the committee in response to a general demand of the public, on the ground that it is not proper for the assessor to sit in judgment on his own work, 13. POLL TAX ; The present poll tax law was enacted by the last state legislature on the assumption that an emergency ex- isted warranting this extraordinary form of direct taxation. In the opinion of the committee a poll tax has no place in a modern system of taxation designed to function as a permanent and equitable means of raising revenue to meet the cost of government. We therefore recommend the repeal of the poll tax. .121 : Tlc'lT ASIJAU .^Li: 10 OHi-.Q.! noaasaa.G vjj-nuoo edj- jBiiJ eshivotq won v/."^! sriT aoitijaiLsJ-jps "io bt^r^od yjnuoo sdS 'zo lodtiom n edi IIsxIs S^di baoLimoodt sW .b'lJSoJ ciiJ' lo xiolc erl* ad" Ilsrfa bnfs Mi/orls aaiJ-lO ."iositn'i riiala as gflxJo.3 lOjibUB -c^ciiJoo edi aixfiocf Q39X1J no noiisia^sQiqai sdi a.i.si9i oi bevtolL^ ao at QiiJsssm Isiijoaxei aixlT .wsl -^cd" £)9.bJt-!roiq won as. doidsf basmeb I/iienss s o* Beaoae^i at a.^HLiiL-iOO ed& i^d bsiee-Q-^sja edi nol laqoiq jon aJt c^x *.3riJ' bnuoia orid" no ,ojcIcfjjq aiij- lo ,iiow xr>vo siii no drisrasfaui, ni d"ie cJ- loaaaaa^ ; XAT JJOq. .51 (J-aal sxIJ- Y<^ ba:^oiine sbv; w-oI xB;t IXoq inem'ra- arfT -X9 Aiona^icsms ns isdi nox J^gniua ;:c arid" no aiujslaiaol aJjsJ'a .noiJ'sxBd d-osixl) "io aiol ^snxhio/j'idxs eixld gnxi'msfXBW bad-al axiri rjii Ilocr ;3 asici'X.'^aoD 9xfd" lo noinlqo edi nl notion-j1 cd" ban^xasb noxd'.'iXEd' "io ooJ-aYR ntobora s nx sosl'- on od" suaavai saxaiai lo an^ara eLo&^LupQ bna d'nansunsq a sb . d'nomn'xsvos lo d'soo arfd" d'osni Iloq ezii 'io Xjjaqei axld' bnsaciooei oiolaiarid' 9\V .xsd' 152. 14. TAX 3XSI£PT SECURITIES : We sutmit herewith an extract frora the report of the Congressional Committee on Ways and Means, on the subject of tax exempt securities: "The Committee on Ways and Lleans, to whom was referred House Joint Resolution 314, a resolu- tion proposing an amendment to the Constitution of the United States, having had the same under consideration, report it back to the House v/ithout amendment s-nd recomi:aend that the resolution do pass, "The amendment proposed strikes at an evil in our system of taxation vrhich is already great and, if unchecked, will grow to such magnitude as to even threaten the existence of our in- stitutions. The Constitution of the United States, as it nov; staxids , not only permits the issuance of tax-exempt securities by either Federal or State Governments, but absolutely prevents the Federal Government on the one hand levying income tax on securities issued by the several States, and the States on the other hand from levying an income tax on the securities issued by the Fed- eral Government. Under these conditions there ha.s been brought into existence an amount of tax-exempt securities variously estimated at from $10', 000, 000, 000 to $18,000,000,000. The existence of conditions that enable any muni- cipality or political subdivision to issue tax- free securities is a constant temptation to is- sue such securities in larger amounts than is necessary. It amounts to a subsidy offered to every such corporation with regard to its ovm direct borrov.ang. It also operates as ah in- ducement to every municipsility to have all kinds of public utilities owned and controlled by the municipality itself, thereby escaping its proper share of Federal and State taxation. In 1921 over a billion dollars v/as issued of tax-exempt securities, and the amount in existence is .sei ' asi TiHUoaa T^isca xat , ^ i noxlw oJ- .ariBSlI un-s ex^V no aald-xinaioO 9riT'' -ifIoa9n B ,«kIo noid"x;Ioa9H tnioT, eauoH bQzi^tsi 8sw noXvty;txi-snoO siid' oJ Inacibnarie na •gaiooqo'xq noxJ" i9i)nj:; sraes aiid" bisxi gnxveri ,39J"ja;f3 bQiiti'J edi 1o tijodiivi 93xroH oxii oi Aosd it J-roqai .ncijsisijianoo o£) noi^iJloasi sril i'BiiJ JDn9;-.nioo9i brts j"ns£iI)ri9iU3 .asBq IxY9 as ia ae->LJi'iie iaaoqoiq dTiaax&xie.-aa 9ii'T" ^■^913 xbsails si .loixlw noxJ'^yCBd' lo ni9d"s^3 iwo ni 9i3jjJ"xn3J3in ilot/a oJ' W013 IIxw ,b9io9rfonu "ii .bna -njt *xuo xo aonai'sxxa sx^ t n9i'.s9'ixlt n9V9 oi es heitnU odi "io noxi'UvXianoO sxiT .anox*)jJ"Jt;fs 9x£J- atxmiaq i^Ino d"on , abrtata wen .tx a.3 ,39*j3*S Isiiobs'i ladiia xd asiiiiuoea tqsneK.s-'XSi Io oouBtfaaJt sdi eiaovetq ^Xsjxxloao^ iud ,Qin&izsitovod ois^iB 10 axnconx -^iiIxybL biiBd eao &di no d'ii9an'iGvoC Is'xofiol ,39j£.t3 IS19V93 s:it ^jcf I)9W38i agliiix/oga no xei" SnJt'^val moil i)n,Bil 'xorld-o sdi no 39J'£!d-3 &rIJ- bna -be'i odi "^a i)9x;3 3X 39x1x1^093 cd^ no xisJ- 9xaoonx ns 9i9xl;t anoxd"xi)X!oo gaorlo isisnU ,lr:9i:ini9voO Isis ^0 J'nxxoxos n.<3 eonaiatzo oint irtguoid nsscf 3>Br; i.z beismtiee ^lauoxijsv 39xJ"xijjo93 i'qiiisxg-xs* 9xiT .000, 000, 000, ai;^, oi 000,OCO,000,OI§ uTO'x"i -inxxxa \,^e alcfjsna d-srlct enoxJ'xibixoo "io oonad-axxg -xel 9ii3si oJ noiaxviijcTiis IjScxJ'xXoq 10 TC^xIsqxo -ax o- ciOL^s&misi cfasjTXioo xi ax aoxJ'xiuooa 001I ax nsxiJ" acfnxxoos 1931*01 nl soiJ-xixxoaa xiox;3 oua ot b9i9l1o Aci)iaci'jja a ocf sJ-aucxac II .•\ii33a909n mTo ai"j: oi bz.^;[-3i dii^r noi^'.-iioqioo rloua -^igva -ni: xius as asJ'sigqo oaljs il .snxwo'xiod j09ix.t> abnxi[ LIB sv&d oi ■^Jxlxiqiolnxxxu \;i979 oi tneasoub Qdt -^d i)9lIoid'noo baa bonwo a9XJxIi;tx; oildu': Io loqoiq stx gnxq.'joaa -^cfgiyiiJ- .llaaJ-x ic*ilBqioxnjJu isei nl ,noxJ'.3X3i 9cf,6j-8 bn^ Lsi'Zobs'K to sisds &qsa9X0'X.^i 'to bsiuasl a&vf ai&Llob nolllxcf s i9vo ax gonoitalica nx jxixjorrxs edi cn.B ,39xJ'XiJj'09a 153. constantly increasing. It is obvious that this condition of affairs makes it difficult for pub- lic utilities priva.tely conducted to maintain their financial condition, for just in propor- tion as the money can toe obtained cheaper on bonds that are tax exempt the rate becomes higher on those which are subject to levy. V/hen so large an amount is invested in tax-exempt secur- ities the inevitable result is that it is more difficult to obtain money for ordinary private business and that investment in productive bus- iness is discouraged. The rate of interest re- quired from private business is raised in pro- -^ - portion to the amount invested in tax-exen^^t securities. So also as the Federal Government finds less amount of securities upon which an in- come tax can be levied the higher must be the rate on the amount that is subject to tax. "As time proceeds, the mass of tax-exempt securities, already so great, will continue to increase until every inducement vjill be off^^red to the man having a large income to make his investments solely in tax-exempt securities, and even the comparatively small taxpayer will find it to his profit to invest in them. In the meantime the revenues of the Federal GrOvern:nent shrink and the income tax will be collected largely from those who have only comparatively small incomes. This condition can not but have a highly injurious effect upon the business of the country as well as the revenues of the Government. "That some benefit is derived in certain directions by the issue of tax-exempt securities drawing a lower rate of interest, is not to be denied, but the majority of the committee are satisfied that these benefits are slight com- pared to the injury inflicted by the present plan. "The amendment proposed, being merely permissive, would not absolutely require that bonds of the Federal Farm Loan Bureau and the joint stock land banks be taxed but in practice it would liave that effect. Whatever might be said as to the pro- priety and necessity of such bonds being exempt from .£31 airW- J-jsriJ- euotvdo aJt ;tl .ania-ssTonl ■^IdTtsd-anco -cfjjq lol iluoillib tl sa^Csni a^txjsllB lo noitjfcbnoo nxj3trfii3m o:f IjsoOJJijnoo -^lat-'sviiq QaLJlLiisj oil -loqoiq ni d'ciUt, lot ,nolJ"x£)noo Ifiion^nii liarlJ" no i9q.e.9xio bsnisJ'do 9d nao Y^nofli edi as noij nsxlairf asmooscf si&t edi d-qmaxo xbJ' di.o J-srit abnccf us ner[\y .'^al oi iO'i)l(Jiua sis xloirfiv aeoxlJ no -rmo&a J-qmsxo-x.ed' ni fesJ-BSTni ai j-nucras ns 931^1 9ioxn ai is. S&di' si. iLuasz 9lo'niiy9ni edi agiJ-i scf.oviiq TC'^unibio 10I x.eciozi nlaido ot tluoiYilb "Sud eviioubotq ni insaitsaYns. i^sdi bciG aagnxsi/d" -91 &eeto&tii: I0 ^iai. erfT .J^jg^siifooaii) ai aaani -oiq ni boBi&z ai n?.QniQuci sd-^^vxiq noil boitup J-ffaigxa-Ksd" ni f>9d"t;9vni inuocas Bdi' od" noxiToq tnei.mt3Y00 lf:,tebo1 odi as oalfi o3 ,89iJ'i'ri;o98 -ni ns rioiiiw noou 39iJ-iiuo93 'io d-nxroiiis a29l abatJ. ed& 90' d'auf.i lorigixl edt bezr9L 9cf neo :::Bd' sraoo .xs^ oJ ;fo9QdiJB ai Jerlt J-nuoniG srf^ no gJ-^i cfqaisrcg-x.id' lo aesi;: sricf .a^sgooiq oiidi aA" oJ- si/niJ-noo lliw , i-coia oa Y^BSiI.g , 89i^iiJJ093 igicil'io sc JIxv; d'n9r::90x;bnx \;'xev9 liJ-nx; 983^101^ aiti 97lj=ixri od" sitiooni 931^1 b ^^iivBr-l hjse: eil.' cd' bnB , aexw iiJJDOE iqney.e~:zsi nt xlt'lca ed'n&md'ssvni fcnii Iliw 'X9'ir>qxj3d' IlBma ■\il9vidf;'3:j:3f^i:ioo 9r[.t n9V9 9xi:c!- nl .mgrld^ ni osevni o;t d-ixoiq airi oi it tnoa'siisYoZ' Is^nsba'K odt lo aounsvsi arid 9ciid-n,B9Ei i>9d'08iIco 9cf LS.iu xsd graooni adi baii 2lniir.'a XleviiT,'zr.rjzoo x,lno evsd odvi oscdi rrtoil xXQDtr^l d'ijci' d'on njBO noid"xbnoo aiiiT .ssraooni lisme aeoniajjcf sxid' noqu d'oollg exjoiix/tnx Y-^^-S-t^ -s 9vsri 9r[;t lo ecnrsrei srfd- bb IIsvt sjc '^id'nuco arid" lo • .d'n9£r;ni&vo{D ni5d"i9u .„x sjevL'zo.. ..x d-ilonscf gmoe d^xiT" aoiit'iuooB iq_ney:e-x&i lo suaei Bdi- ^id gnoid-osiil) &Q od- ion ai .dpsiod-ni lo odjBi iswol £■ gniv/isi/) Qt£. ee.d-d'inrnco ^xid- lo T^d-iioQ^m srlJ- d^utf ,f)9xn9i) -ctoo drl^ils 9'i£ ad-jlgnsd oasrtd :^Bd;i- Jb9ileid-i5S .n£lq d-naasiq sxfd- xeisoqciq i-n9nbnons griT" 3d& lo sbnod" d'j3r:d' sixxrp?*! ^leisjloadB don blx/ow bvuzS. >iood-2 d'nioii ^^-^J" ^'■"'^••^ us-.etuE neoJ niisl IxsigbsT d'jsrid' ovaif bliJOM it soidojsiq al iud bQ:z£:r acf a:is-:ed -oiq 9rid od- ei3 bi^a 9cf drilgiin tsroisid^ .d'oell9 Eicil ic.moT.Q gnigcf aijnocf xloxja lo Y^-tse909n bttB ■■^d-oiiq 154. taxation when sold in competition v/itla so large an araount of tax-free secui'ities as now are be- ing issued every year, the majority of the com- mittee iDelieve that it would be neither necessary nor proper that they should be free from taxa- tion v;hen the further issuance of competing tax- exempt securities is barred. ITor v/ill this on the vrhole increase the rate of interest paid by the farmer. "The testimony before the committee was to the effect that only 5 per cent of the farmers who borrowed money were obtaining it through the Federal farm loan system and that the induce- ment to large investors to put their money into tax-exempt securities was constantly causing withdrawals from farm loan mortgages, reducing and mal:ing scarce the amount of private funds avail- able for such investment, thereby raising the rate of interest to those that were not able to obtain loans through the Federal land-bank system on ac- count of its requirements or for other reasons, so that it was actually claimed that as long as our present system of taxation prevailed the Fed- eral Farm Loan Bureau operated to the disp.dvantage of the farmer rather than to his benefit. Cer- tain it is that, notwithstanding the prevailing low money rates, farm loans obtained from the private investors coriiiiiand a much higher rate than before the war. In this con.iection it should also be noted that the committee has many times had called to its attention that there was great difficulty in obtaining funds for the construction of homes and necessary improvements on rea-l estate in the tov/ns and cities and that an abnormally high rate is obtained for money loaned for such purposes. "There is no doubt, also, that the direct ad- vantage resulting from the issue of a tax-exempt bond to the governmental entity issuing it is usually much exaggerated. Before the present income tax law was enacted Federal, State, and municipal bonds always commanded a premium over other issues by reason of the superior security. This premii;im often amounted to one-half of 1 per cent, and naturally varied with the circumstances. ,^dl 93ir.I on di:ly,- aoiii.ieqmoo rut bloe naxlv/ not'^Byjit -sd 91P; voa ea aeiJ-i'iuosa osiI-xb* to iiMsonsi tm -moo ex{* lo Y;wliot-sfli axlcJ ,is9\c visvs bsu^Bt gni yiBEGSOsn •r9^'c^io^r acf bl^rvi is. i&Ai ©vsilsd seiiirti -E.yjii ncii soil 06 ijlucrle \Qdi isdi -xaqoiq ion -xb;^ ani*&qjKuc to sonajjeei isr;d"iiJ*i arW aadvi noxi" no sixid- liiw 10TI .Ls-xiscf si asxcM'xuooa Jcnsxs hiaq ^asio^ni "io sd-j5i erii oase'xonl sIo;Iis oxld- si9uii:'i srfJ Ic i'nso tsti S vino :tsidi J-oolte sxii- rlsiJO'iiii' d^l snifixslcfo eiav; \;anor;; Jbswoi'iocf oxiw -3ouiinx sr^^ d"Bjr{J^ bnj3 i'it9;ta>tR n^.o! niist iBiabsl edi ooni \;9::on; liarld" »i;q oJ" a'xo;J'e-'Vnx 63'xcl o;t oi.scv gnxa;j£-.o \:Id'n^J"anoc bjbw esid-xiwosc inmsjcs-xEcJ- gnxoirbs^ ,B9ssa*ioa ctBol ssnsl moil Elewe^Md-iw -lievB Bbvm'i ai^vt'xq lo i-niJ0f:'JS &r£i- ooiijoa sniSlBrn .bna sj'Bi sriJ- snlexsn -^cfe'ierii , j-n snipes vri J: xloue 10I: olds ni£d-cfo oJ" slcfj3 J-on O'isv; ;tB£f:t saori;^ o;^ J"ssioJkx Io -OS no fl:ooe\;8 3lnficr-.bncl leiobuil 9d:i d^uoidi enxsol ,ano8BSi I'jdio lol 10 ad-nQcisixups-x 8*1 lo intJco BB gnci BB tBdi beci'lBlo '<(,LLbsj^03 bbw it isdi oe "bel edJ beliB'^eiq nct^^BXBi to rasJava d-nosstcr ixxo ssedT£vI).9axx) sdi oi /jsJ-ji^isqo wboiuS: n^Otl v.ii£.1 Le'io -190 ,J'i'i9n&d aixi cJ- n&di zcdie.'i ismrcd 0x1 J lo SniXiBYSiq orlJ- 3r;ii)nxjdaxioXV/;J'on ,i^xt al. ii nisi odi izcii bsnxBddo shboI unBt , escfBi Y.^aoai. v/ol nj5xl,t gJ'fii loxi'sxrf douir. jz bnxjinr.cco eic^aavr.i: sj-^vxic; bLucde, ii noiooof.noo eliiJ- nl ,ijsw ad^i sio'isd esaiii' Y^cci a-sx: sslJ'iirjnoo 9rld" iadi bsion ecf oels isyji'^ 8£\i eiQdi jfdt cioli[ieii£ sit ci bclL&o bsd. noXvOuiJ-anoo edi lot ebnut :^[iiiiii£,id at ^ilnoittib 6i£,te3 Ibbi no a;tno;iievoiqni Y.'^BssQOQii. ban asnoii "lo y^llsancadei n£ ir,dt bne seliio bns emvoj" ed.i nl dosjB lol bstiBoL Y9^0"' 10'^ i)9riX£j"ci'c ax 6i£.i rislx£ .as8oqii;q -i3B j-osiix) en* *j-.'xfJ .oaljs ^iducb on ax S'xsriT" Jqcfieire-xei" b "io sws:^! onJ- f,:oil gnxJ^Iuesi 6^£.in£v ex d"! ^nxjjaai ^J-iJ-ns If instzii^sv 02 sri.t oi' bnocf d-fisasiq s.'fJ' ertoIgS .lied-fissgBxe riox/r- xIIshjbu bciB ,eissia ^iBiebal bofozns esvr w^X xs;}' sxnoonx rrsvc! riixfirasin; .g bsbruiiVa^'oo a"^£wlJ3 fbnod X^qioinum ,\;Jlix;o9e rroxtcqua i-xii' lo noajBoi \;o a9xra.?x iicxfi-o i9q X lo tLi^d-onc oi beinuor'S. tteito trjjttu&iti alxIT .89orijeJantuoixo 9n;t dilv bsxxEV i^XXsiud'sn Lob .^nso 155. There are a large nuraToer of institutions that are obliged "by law to keep their investjiients in issues of undoubted security, which increases the demand for State and municipal bonds, even though these institutions derive little if any benefit from their tax-exempt character. "But even with this demand there still remains a surplus of tax-exempt securities over and above those required to fill the demands of the great investors and the institutions just mentioned. These bonds must be sold to the small investor and this surplus fixes the market for tlae whole. The large investor therefore is not obliged to pay in proportion to the benefit he receives in tax reductions. In this connection it should be observed that the Government today is able to negotiate its short-time securities at 3-^ per cent although the issue is not tax-free. Y/hile there is a difference of nearly 1 per cent in the interest rate between Liberty bonds that are tax-exempt and those that are subject to taxation, Secretary Llellon gave his opinion that this was caused by the comparatively small amount of the tax-exempt issue and that if the whole amount of the Liberty bonds had been tax- exempt there would have been little, if any, reduction from the rate at which those subject to taxation were negotiated, Former AssElstant Secretary of the Treasury, Mr. Leffingwell, also gave his opinion to the same effect. It is evi- dent that the difference in the rate depends largely upon the amount of the issue, the date of maturity, and many other circumstances, as well as upon the tax-exempt feature. In a letter dated February 9, 1922, to the chariman of the committee, Secretary Mellon demonstrated that at from any point of view the Government was a heavy loser by reason of the issuance of ta^-exempt bonds. "These considerations have been for a long time apparent to those who were specially concerned with natters pertaining: to the Federal revenue. As early as April 30, 1921, the Secret ?j:y of the Treasury addressed a letter to the chairman of the Committee on Y^ays and Means recommending to .eei i stii enotiuiiieni. lo 'lodasjn seibX b sis o-xsflT aL.^.^oiorcJ: rloxxlv; ,\Jiiuo9a boiart by States and municipalities) represents a grave economic evil, not only by reason of the loss of revenue which it entails to the Federal Government but also because of its tendency to encourage the growth of public indebtedness and to divert capital from productive enterprise. The issue of tax-exempt securities has a direct tendency to make the graduated Federal sur- taxes ineffective and nonproductive, because it enables taxpayers subject to surtaxes to reduce the amount of their taxable income by investing in such securities; and at the ssime time the result is that a very large class of capital investments escape their just share of taxation. ' "Further, in a letter dated January 15, 1922, Secretary Mellon said; 'The most important consideration is that the existence of the growing mass of tax-exempt se- curities, coupled with the extremely high" surtax rates still imposed by law, tends to drive per- sons of large income more and more to invest in wholly exempt securities issued and still being issued by States and municipalities and heretofore issued by the Federal Government. The rssult is to impair the revenues of the Federal Government and to pervert the surtaxes, so that instead of raising revenue they frequently operate rather to encourage investment in wholly tax-exempt se- curities, and even to encourage the issue of such securities by States and municipalities. This process tends to divert investment funds from the development of productive enterprises, transport- ation, housing, and the like, into nonproductive .dei lo litlldserrbB odi isbisnoo th iiSLi aeei^noZ) no ni£3£ bnji .asiJ iii/ose jqmaxs-XEc^ lo esveal edi Oj ,ie;^iel loxL^ons ai ,1221 ,CS lodmoJ-qsB -iitos3 ,o&d-4^1f.!noO sOBSil i)nB av:-eW srl^ lo n^ciii.sji-fo :eed-Bie ncIIoM "^i^J drrnexs-x-B^J lo srryjlov gniejso'xoni-isvo etlT' eoJ-xid-S Yo d-isq J-som sriJ 10I fisjjsai) eslixiuoea oiiitonooe svcxs .8 sd-naasigsi ( as i^fxl^q loinjLrni" bn/3 Qunerct lo ssol sxW lo no&Boz \,(i \J.Cic iocs ,.[iT9 d-jju ;tn©jTTii9votJ Ijsieiis'H: 9iIJ- co Bllr.ino il doidxi divioi:g od* ejijetuoons oi v;on9Jbn9i" sJl lo ecuBoed obIb nioil X£cMqeo d"i3Tii) oi bn^ eesnbaJ'd'abni oilcfjJCi lo 8&tii'iU0Qa iQ^r^xe-xBi lo 9^/331 oiiT .seiicrieone sviJ-cuLoiq -ixjE lEisbal bscfjsJLfb.B'ia ^di siLcm od" YOfis^^a* Jooiib £ aarl BQltfcna di e8*;£ood ,9Tid"Oirboifinon hOB sviJ-osllani ssrcsd' lo inuoai£ 9i£i' soubei oJ 3s:cf=^ii;s ci ioeldsjQ BtexBqxjii [seiiiiuooe. douQ cii. gnii-asvni \;cf enoonx aldaxBt tiodi e^iBl \;i9v £ ^.7.x i si. ilueo's sdt emii araes oxij- ;)•£ bnis lo sixirfa iBis'i ilsdi- sqi-oss e;tn9n-uJ-e9vril l£t J:o«;o lo eejslo :I)i£3 rioIXa:.' 'o-^9^092 arid- d-Bxicf ax noxJ-£i9bxarroo dTLfid-ioqc:! J-som sriT' -se jqxri9xe-:cBJ' lo aesm ;^iUVoi'^ adi lo aonsj-alxs xsJ-iue ^ifsixl vX9mst£3-X9 sriJ" xidlw balquco .eexji-ruo -isq avxii) cd abnsd" ,W£l \;d' baeoqiiU Ilxda asiisi nx iaovni ol eion: bnis s-xok anoonx Q3:r£l lo anoa anxocf LLlie bciB bQuael esiJiixioaa jTicexs y-'-^o^iw e-xolojsioxi bnxj asxdxlBqxoxnxjxa bciB eoisiZ ya' I)9x;aai: d-Ixjeet sxiT .J-noxrai'isvor) Ir-i.bs'S sild- Tcd" boxxeax ii.Qtrjtievoi) S-Jsiohel 3di lo aajjnavsa ©xlcj- iXBqxrtx oJ" ax lo bxjsj'ani d-firrcf oa .aaxijd'iL'g edi J-isvisq od i)rxi3 I9xld-Bi adjsieqo '^Id-nGirpail •'cedi sjjnevsi ariiexsi -93 *qci6xs-::Bd' Yllorlw itx driaxiid-agvriJ: ss^iuoons o* xloira lo 9;j'sax sxIJ- sg^a^'oons oi neve brts ^sai-iiiiso airIT .asioxlBqioxxiun bn£ B9d-J^'.d8 ^;cf esxd'x'i//098 sxid" noTtl abnul J norJ- a &vr.:i: d"X9Vlb od abnsd ae900iq -d"xoqsm5id' ,a9aii:qi9d'n& arxd-oixboiq lo ^nsmqclsvab gyxdouboicnon odr.J: ,9;/iI sdi hnr> .'-jr rpm--' .noid'-c 157. or wasteful State or municipal expenditures, and forces both the Federal Government and those engaged in business and industry to compete with wholly tax-exempt issues, and on that account to pay higher rates of interest. 'The greatest value of the full exemption from taxation arises, of course, from the* exemp- tion it confers in respect to Federal income sur- taxes, and the constantly increasing volume of tax-free securities therefore constitutes a real menace to the revenues of the Federal Grovernment. At the same time it makes the high surtaxes oper- ative as inducements to investment in nonproductive public indebtedness and is gradually destroying them as revenue producers. As a consequence the yield of the surtaxes is dwindling and there is a premium on the issue of bonds of States auid cities. In the last analysis this is at the expense of the Federal Government, and it is hav- ing a most unfortunate and far-reaching effect upon the development of the whole country because of the diversion of wealth from productive enter- prise.' "In his message of December 6, 1921, President Harding said: •Many of us belong to that school of thought which is hesitant about altering the fundamental law, I think our tax problems , the tendency of wealth to seek non-tsLxable investment, and the menacing increase of public debt, Federal, State and Liunicipal - all justify a proposal to change the Constitution so as to end the issue of non- taxable bonds. No action can change the status of the many billions outstanding, but we can guard against future encouragement of capital's paralysis, while a halt in the growth of public indebtedness v/ould be beneficial throughout our whole land.' "The ^iJays and Lie^ns Committee at that time had before it a joint resolution for constitutional amendment introduced by Mr. McFadden authorizing the Federal Government and the several States to each tax the securities of the other to the same extent as it taxed its own, suid several other resolutions having the same purpose. Subsequently .vei 9eodi bnz d-noxiiHisvcO l::'iob9'i orli: rLica esaioT: i^rtB xid-lw 9d-9qmoo oJ ^ri*ax;.bni: JjnJB Essriiajjcf ni Las^sne d-fijjooois J-fiild- no hne .aexraei ^J'qmsxs-x.sd- \IIox£\7 .taoreiai 'to aet£,i iQris,L:i ■^sq oi aotiajiiexs ilul edi lo 9ul£v c^a©:fs9is axiT* -qcisxs *or:j- mGi"i .asix/oa 'Ic ,8osxijb nci.J-^:XB;t noi'i -lua 9noox:i iJzieoe'Z. oi toeqaer ni e*i9'lnoo ii nott lo grujlov gniasaioni: \;Id-n£-wsx^oo 9x£d' hrifi ,aQyMi Iboi £ agd-jJcfiJ-arroo 9 7 0*5:0 is rfj- setiituoea 991'J-XB^ .drcsLiniovoC Ir.'f^Jbsfl arlJ" "io 89wn9V3T: arid' 0:? ©OBnora -laqo B9Xf.'d-iirE 113x1! 9xi;J agirLso: it omit aoBe acli tA avltouboiqnor. c.x irisnJ'esvnJ: oi tinei^ieoubnt. as eriis ^al\otis3b X-lLEubBts ai bne e8snb9d-cl9l>r;i: ollduq sdi 9on9i/p9anco js aA .aiaowboiq sunevai sa iv.sdi ex gigrlj- briB gniliinlwl) ax BQXJcitise siii to fjleii^ bciR BoiGiQ to ebncd I0 eusei erii no nu/icre'rq £ 9xfw iB ei. aldi axe^^IanB iauL edi nl .asicfxo -vxir: ex it baB ^icisiiirtovoO Lciebol adi Ic sarxQqxs ^•091:^9 snxxiojsei-ne'i bcis siBnx/.tio'iriU iaoca b ^ni 9axxxj09Q \iinuoo slorlw 9xl;t lo d"xi3P.:qol9V9h sdi ncqu 'leino aviioisbczf. szoit dilBaw I0 noteteYtb sdi I0 »,esiiq d-n9bx3ST'I ,ISQI ,d nocfxneo9G lo agjeesdia aid nl" ibisa gnxbisH id^i^'odi 'lo I00X1O8 ir^ii oi :^aolad au lo x^bK^ luiasitiBbnsjl adi gnxiscMfi iLods itiaitnad. ax xloixlw xO -s^ofigijns* adi ,eiii9Xcfoiq xad" luo :InJ:ri.t I .wsl axiJ" i3xi£ jd'xiaaida&vni QldBzzsi-noii ^{993 0* flj"l£9\v sJj-Kj-a ,l£i9b9''i ,d"cf9i> oxlcfixq lo sax50*ionl 8nloan9xn 9anj3fio oi' Xeaoqorrq £ i^'ilitaut ^^^ - leqxoxnx/lvl i.utB -non '10 9j;8ai adi bna oi bb oe ciGtisJitiecioO edi aviBia adi gsxtasxfo rteo r.oiidB oPI . abnod aidBX^i biBiJ2 nBO 9W iud ,^nibkivieiuo anoillxa' \;n£;iit adi lo ,al.B\lBtB(i a^lBitciBo lo vrn9r.iO'iS'Xi;oorx9 ezuiL'l ieaiB^B aeanbsidobczi oiiduq to x£»}'V0T:g adi nx d"Ix;xt b olirlw '.bnjsl 9I0XXV/ IU0 ^xrodsixcirlJ- I.3X0i't9n9cf 9cf Muor.' 9miJ' iedi iB aeiiinzsoO enpsi' ,0xu5 exB\^ grlT" I^noxd'xjixd'anoo 10I noxJ"XTXo39'i inio{, b it aio'ted bsd Sxrxsiiorld-xjr, uabbBloli .I'lA ■'^cf baouj^oiicit i nandir.aasB oi aaii^i& iBiavaa adi bn& J-nsxcxi-xsvoO Ls-tsbal adJ a.-zBe adi oi ladio adi to aaiiituoaa adi xei dosa tadio iBiavae buB ,nwo ait baxai it cb inaixa '^li-noi/pgao'i/S .aec 'fx/r 9:-;:3a odi snxT^xl arfoxi'irlcasi 158. hearings were had upon the resolutions and, it TDecoming apparent that a majority of the coamit- tee favored the reporting of such a resolution, a subcoMnittee was appointed to consider the form thereof. The resolution in the form no^Y reported is a result of the work of this suTDCornmittee, aided "by the Treasury experts, both legal and fiscal, and the Legislative Drafting Service. The form as now presented has "been agreed to and is recommended "by the Treasury Department, "It appeared from the hearings that the sub- ject had already been given careful consideration by various tax associations and tax experts, all of which concurred as to the necessity of such an amendment to the Constitution and in advising its speedy adoption. Aijiong the associations that have taken such action are the national Tax Asso- ciation, composed of representatives from every State; the United States Chamber of Commerce; the National Association of Real Estate Boards; the American Farm Bureau Federation; the American Economic Association; the Investment Bankers' Association; the Farm Mortgage Bankers' Association; associations representing the public utility bus- iness; the Hew York State tax conference; the Peo- ples Reconstruction League; and the Ohio Tax Asso- ciation. "So far as is known to the committee all of the prominent authorities on the subject of tax- ation favor the amendraent. The United States is the only one of the great nations that permits such a condition to exist. "In addition to these economic evils, tax exemptions create a grave danger to our social system and form of government, No principle of taxation is more generally accepted today than that taxes should, as a rule, be levied in accord- ance with ability to pay and all citizens should pay in the same manner. The present condition violates every rule based upon these principles, and while we seek to create, as far as possible, equality in taxation, we find that the Constitution makes it impossible. There should be no privi- leged class under our Government, but a special privilege is granted to those who invest in tax- exempt securities. This situation is the ground of just complaint and creates discontent and pre- judice against people of large means v;ho use .SOI -J'imnioo odS to y^&x.'xolRa b ir.sii ineifiCiqr, yciit::ooQd .nolvtulonsn b rioue "io ^^xc^1oc:^•x orlJ iidiovsl: 09;t rrrao't srii- ni: noJti-iJlcBsi 9r{T ."iocrerW i.^o'i axiicf to ■)iio\^' erii Jo Hl'S'^t b si bQizocet v/on ,8;}"iocTco y;:txJaJ39iT sri* ^cT f>9fjia .oeJ-JxnTiiOOcTuc anli'^jBtCI avitfleigsj sr^d" £>nB .iBoeil iJr.B lessl rlJ-oa rtssd 5£jrf issd-nsysiq v/on pb imol sxlT .soivrsS XiuscsiT arLt rcf h9i)n9rcx::oo9i ai fcnjs od' begtse -(Sue. grfi' >tc;rld- 8311x1.'; orC 9rr;t irrcTl f)9iJB9qqj5 i-I" rroiJ-cieiixanoo Iirligijao nevig n99cf ^bissrilB i)Bri tog^ He ,8d"r'^riX9 :x£- l3n£! enoii'JSXoofaB x£i exrcxi^v ^jd" xioxra "io ^^X3f;909r: edi cc^ sb Lei'^uonoci lioxrlw "io gnlaxvise nx Lnc noiiismccioO odi oi tnombneaiB ne tsrli 3f:cjt;>£;loof'3r arl^ anoqiA. ,noi;tqof)£ •'ibeecs aii -oaeA xbT lisnoxJ'sTI ar'J' aia nolj'ox-. xioxre ns^uei- svail TC'i9vo raoi"?: a9v.cd'i5;fn95 9iq9i "io hssoqnco ,noii"£Xo ;90i9r.tfnoO lo i&o'riisrID asiBiS be&iciU edi [eiciS. lebtiioS. sliid-alo; Is&F. "io fjoxj.BJ:ooa3A lenoi^fiK edt KBoiiestiA ed& inoiiBiebel UBeiuE rinx;1 ffJsoiiemA orlJ- '8i9;Ini3b'. inGwd-aoynl arii jnoxJ^iooesA oinonooS jnoxJioloopaA 'pis^inBai e^s-Qiioi: nii&l odi jncxJ-j^looaaA -axrd x^tlttu oxicfuq exi* grcid'ngs 91091 ancxd-aioos.is -oaSf srlJ- ;9or.9io'iriOO x^.i" 9;}'bJ'8 iiioY w9T: srt^f ;a?.9nx -oseA xcT ojfcno 9xit f)n.'? :9.U3.3&J iioxJ'ojjIo e^co9?^ eslq ,ncx j'i'io ^c 11^ ssJ-J-intnoo t;;.u cw nwcrri ax a& lijt o2" -xbJ- Io J-a9i,ai;3 edi' no a9XJJ:iaId-UB ^nanimoiq edi aeiaiS f)9d-xnU sxfT . d"n9wf)rf9iaE edi lovs^ Koi;te ad^inneq d'B.'t^ anoxl,?:! ctxisi^ oxfj- Io eno icXno gr-J- ax • d'axxe cJ ncxJibnoo js Kox/s xjsd- ,aliv9 oiwoncoa s^odi 0- noxJxx)f)B nl" lexooa luo od" ie-Qr.sib svicf^ b sisiO'io anoi:di_..w.:L^ 9lqxortxiq olU ^iaecm'ier 02 "io aiioJ. bne msSaxB ruidi \£iboi bstqaooB X-^Lsieas'^ 910m ai aciisrjZCBi to -i)ioooj8 ni belvsL ad ,9lui a axj ^blvod:: c9xb^ is.dJ bluoda anssxJ-io IIjd huB xsa oi y^iilidsi d&lvr eor.js noxlxLnoo d'naasiq oxlT .larinBn 9clgs Qdt ni \;Bq , s9lqxonxiq 9a9rC^ noqx^" beasid elsji y^s^o aei&lolr ,9lcfi3 3oq exj nsJ. 3£ ,9i&oio oi' ^eea 9W slider bn& noxJjj;tx^8noO sdt tadi bail 9v; ,noxdT-xed" nl \ii.lBupB -XTiiq on od blvode sigriT .©Idxaeoqiai ii egjiBri Ifiiogqe J3 isjd ,inei<:iniavoO 100 isiinxf eajslo i^sgal -zcsi ai. iesyni oxlw gaorl^J- oJ Lg-tnxsig ex 9g9lxvxiq basjoifj odi ai noxd"Bi;li8 aixIT .asiJ-xixioga ooitioxg -9iq bne J-nsJ-nooaii) aei.^eio has. iniBlqufoo ieul lo eau ortv.- aoBon b^ibI Io 9lqo9q j^anxjsgjB soiJbuo 159. a lawful method to lessen their taxes. Compar- isons are naturally made "between certain parties •who have a large income derived in whole or for the great ■er part from tsix-exempt securities, and pay little or no income tax, and those who have only an income of moderate size derived from their personal exertions and, by reason of the present needs of our Government, are heavily taxed. A system that will permit one man to have exempt from taxation an income of $25,000 a year from securities which, possibly, he obtained by desoant or devise, and which taxes heavily another man who, by his personal exer- tions, earns the same sum, is unfair and unjust, and when great estates largely consist of tax- exempt securities which pay no tax v;hatever the situation affords an opportunity for those who seek to attack our institutions, "The majority of the committee therefore found that the present system should be condemned for the following reasons: "(l) A large portion of property escapes taxation, thereby causing great 1@S0 of revenue; "(2) It violates the ability principle of taxation and unfairly discriminates between ta:cpayers; "(3) It impedes private finamcing; discourages investment in new enterprises; encourages extravagance of governmental agencies: "(6) It grants a private subsidy to certain interests; "(7) By withdrawing money from private enter- prises it increases the rate of interest required for all enterprises not carried on by the Government and thereby adds to the cost of living; "(8) It creates social unrest; and that the only practical remedy was by constitutional amend- ment such as is now proposed. ••It will be observed that the form of amend- ment does not forbid the furtlier issuance of tax- exempt securities, but merely permits their taxa- tion by the Federal Governi.ient on the one hand, provided it does not discriminate against secur- ities by the States or under their authority in favor of national securities, and that each State .eai -laqraoO ,BQy.Bi mtoiii ceeasl o* Lot'iom lu'iX'/s.I a asid-ixjg alsiieo nsevvctaJ sb&a x^lsiutar. et& enosi lot no aloriw ni hsrlieb siKooni: sgTBl b avsri oriw .asiJxiiJOSB i-qirisxo-XGj- raon't ^tsq aeJ-^STS srict oriw 98 o£* iinje ^X£i enooal on ic 9lcf:ril x&q bn& moil bevi.iQb esta sisisboa 'io emooni. ac ^{,Lrio evsri eiii Io aoaaet y,d ^bns saotiiexs iBncataq liedi ^livjssxl 31JB , cfiisionisvoO iwo "ic ai)9en d-nsseiq rusn sno d'imsq Jliw tsdi meJ-sve A .f)9xs* Io oiJiooni ne noi^^^xjaJ' rcoil Jqnisxo evsri cJ" ,"^Icfi8eog ,xfoxrIv/ asxc^iriijose rrroa^ ijssy -^ C0O,ciS$ eo:ced- rioL.Iv.' hne .seivslj 10 d-naoa©!) ^d boaisitio ek -19X9 lenoeisq aid ^cf ,Oilw asm isnJon/: Y-^ i'^'-f^®^ ,d'ax;i,nx; bric ilBtnu al ,mi;e or.iea srIJ ariiss .anoint -xsJ Io ;t2ianoo v-lsgisl esJ'.ei'ss J'.^s'xs nsrlw .bnjs Slid" :tov9j£irI\v xj^i on '<;3q xioixlw esxcMii/osa *qjrsxa oxiw eeoxiJ 10I ^c<^xnxr;tioqqo rts sX;noil£ noxd-^i/Jxa .exiox^jjj'xi'enx luo :io£3ta oi jitisa inxrol aTclQisxi;^ QQiiiiaizoci odi Io \itiolBn. exfT" 10I borj^abaoo scf LIxioxis XEOoai^s insa^tq sdi indi ranoaesi 3nxv;oI7o'i edi aaqfioas -^d^iaqcnq Io nox^ioc; egifil A (l)" isunevsi "io aeel ij3ST:g £Xixaueo y^^Q'^s^^ ,noxd"£xs* noljfsxfii "io Qlqionxiq \::d'iIJ:ai3 sxiJ- aod-^sloiv ct-I (S)" ; DisYXi'P^^ neo?rcJ-9d asd-jsnxniioaih \;lTxsT:nir bxie ;8eaxiu'i9;tns W9n ni. ^ngcid-aavnx eegsiiJooexJb jI (i^)" lBixi9£i:ni9vos "io sonrig^vfi-x^txa eag^iijoons cM (5 )" •asxrjnsQB niacTiso oJ -"ibiacrua Q&Bviiq b aJ-xieig i'l (d)" ;ao39iSj«x -leias eiiivtiq lioiI ^9non saxweiJbxIJ'iw ^2 ('»')" i)9ix;.'p9n j^a9i9d-nl Io ei^i ox.;.^ essjeaionx c^i a98lnq dTiSK-'xiievox) sxfi \;d no bQxit&o ioci esa.;.iqi9d-n9 11b roi [■QCilril Io d"soo edi oi shb£ xd^'^^^'-^ -^ks grid- iziL:t bciB \iao%ciu Ibxoob esdroio il (6)" -baetne. Isnoi^jUil^enoo '^cf a£v/ ^Jbsxti9T IsoiSosiq Y,lno .besoqaic won el 3£ xloxxe J'nsm -bxi9iua Io liiiol 9di iedi^ ijeviaecfo 9ci IIItv ^I" -XBi- "io soneixaeJ: lerliiul odS Jbitfiol cfon aeob inani -ay^i aJt9fiJ' ai"xffii&q ^■ ' j-j/d , a&xd"xiiJ098 ct'qrnexg ,i)n£i£ 9no aiLi nc J"i; jvoO iBisbel oxfJ Tja' noli- -nuoge iacile^B eJ-^niniiaoexi) *on esoi) J'l beblvoiq ni: Y^-t-ox'J"xiG ixgiiJ- i9i;nxf 10 e9d-,B;J3 edi x^ esxcfx eis.t& doB9 i^dt bciB .asxJ-iiJuOaa I^noijrn "io iq-vbI 160. on the other hand, is permitted to tax the secur- ities issued by the Federal Grovernment, provided the State in levying the tax does not thereby dis- criminate in favor of securities issued by it or under its authority. In other words, the several States are given the same rights with reference to Federal securities that the National Government has with reference to the State securities," We endorse this proposal thoroughly and recom- mend that proper steps be taken to insure the support of the \7ashington members of both loouses of Congress on this measure, 15, SUGGES TIOII S FOR A MOPaL TAX SYSTaLi ; Your committee feels that the full intent of the legislative resolution under which it acts would hardly be complied with unless some suggestions were pres- ented relating to the development of the state's revenue system in the future. We venture, therefore, to submit a tentative outline of the line of development which, in our opinion, it would be well for the state to fol- low as the opportunity arises to msike fiirther developments in the revenue system. Some of these suggestions have been proposed in this report as changes which should be introduced without delay, if there is to be any progress in effecting a more equitable distribution of the tax .OdI -luose sxiJ" X£>t 0- Ijs^Jd'imisq ax ^bcisd tuilio 9rl>t rro Labivoiq , ;tnomn:ovo{) I^Tsf-sl sxIJ' T^cf bsxiar. i aexJ"! -aib ^as'iQxIo i oa zsob x^i odi ^alxvsl rri ©Jed's srlo 10 ;fi xd aouaax. aelii'tuoea Ic lova'i ni 9:^snJtniiio iBrrsvse arid' .bIjiow :£&iiJo nl ,\;di;iorId-jje aii nsMxr Qonateloi liti^ e^ii^ii esn&s odi nsvia sib eectBd-B i'nsnnisvofi lenoiJ'.'iK odi it^di esioini/ose Ir.ioijs'C od' ".asi.fiiuoae ed'.sita arid cd' sor.3i6z3'r diiv; end. -moosi line -^clriSiJOicxcId Ijseoqoiq axdi bQiobne aV;' "io dioqqLE arid e-xuenx c« it9:ted so' eqsds 'isqcxq dxjrid I)n9ni no 339i3noO 'to ssaworl diod 1o siscfnisn. aoi-gnidBBV arCd ,9n;8££n; axrid "^ ^ ,.. "-0L1 i)Ii;ow 3d"0£ dx xloxilw nsiirx' noidwlosai svxdBlsxssI arid -8910 oiow anoid-assgue enioa easinu rfd^iw ijailqinoo od i^UbiBxi &i;i;:v.ji 3'9dr;d-3 9rld 1o dnoi;:%ol6V9l5 orld' od- gnxdi^Iat tsdrre dxcicTjja od .s-xoleisxid ,9ir/dn9v aW .atcdx;! oxld- nx ui9d8Y8 .xioiffv/ dnexnqolsvsb lo anxl orld iO snilduo svxdsd-ned s -Icx od 9d.:d?. orld lol How sii ijlxfow :!ti .aoxniqc luo r:x adnsffiqolQvax) ladifiul sjLsffi od asaiiB Y^-t^'^^-''^*oqqo srid as woX 9VBr[ anoidaeaaua ssgrid" to sao8 .ineds\;3 sxrnsvei edi- nx sd" bli/oxie r{oxr''w "■Q-QCi.^jdo ssi iioqez el::.* xix ioaoqoiq r.ssd 8301^0*10; Y^Js &a od 3X 9i9ild "ix tX^Loi) duorldiTX i^soxrljoidni xed arid' 1:0 ncidi/cfxidaii) sIdBdxxrpa aioci s gnid-oallg ni. 161. burden. Perhaps the most important of these is the re- organization of the system of administration v/hich we have made the central feature of this report. The "basis of the state's revenue system will continue to be, as it has always been, the property tax. We have presented in this report the evidence! to show the present relative importance of the property tax, and we are unable to foresee the time when the general econ- omic conditions v/hich now prevail in this state will have so changed as to occasion the development of other sources of revenue of greater importance. lie reiterate here the point which we have already emphasized, namely, that the outstanding importance of the property tax gives great sig- nificance to the problem of its efficient and equitable administration. A modern state tax department , or tax cominission, will therefore be the head and center of the state's taxation system, in the future, as it should be at present. We are not satisfied, however, to accept the narrow, illogical, and unwarrantable definition of prop- erty which the legislature devised in the act of 1907, .161 -91 &£ii' si 03odi ic ii:tr,fioq[ul i:'-o:ii erii eqjsrfisg .aebtud ew xioiriv.' noxd-iiiJ-siniaL.r; "io usiaxs ©rf* "io nord".osxnE3io IIxw i.^d-a^a sunevei a^eiGiz oxli" "ic siascf sriT .:c£:^ ^lisqo'xc; arid" ,ne9J ev,3wljs ecxf ^x 3£ , sg oi' ox/nxi-noo wcrta od" sonsijx^'-s cd ev doldw intoci -Sia d-x;9i2 59vJ:-^ xbJ- '^cfiaqoiq 9Xi;t "io oonjsiioqmi anxbrusJad-uc gldsctiupe £»nB .tngioxllg sii "io irrslcfoiq grfi- oi eonGOtJ'tn -■> - v ^ :- . X£j lo.d'nsx.id-isqsl) xe& so£.t3 iiis.bon: A .nox;ti5iJ'5JtXix. .^.:-. erlJ- Ic isJ-noo line .bear! gxli ecf 9101913x1;^ IIxw ,n(,'iaaJ:n-iitco oB 9d' blisode ii. s£ ,9iuou1 grid- ni ,£ii9J-8^C8 noidBXBd' a*9d-f?;+a ♦ dTisssriq 9Xid J-qsoojs oi ,iQV9wor' .Lexlaxd-ea don 9ijt. 9Y; -qoiq Io aci&iziLleb eldBinstisMnasj bns .IsciaoIIi ,woii/5n , VOei lo iojs ?»r{d' nx bsziYob 9ij;.t-' lat-el so'd rioxiv.v vdio 162. and which was sustained and approved by the Supreme Court in State ex rel. V/olfe vs. P arnenter . 50 \7ash. , 363. \Ye have criticised this view at length in our report. We believe that this error must be corrected, and that the constitution should be so amended as to accomplish not only this result, but to make possible the introduct- ion of the principle of classification of property for purposes of taxation. \7e approve the model constitu- tional provision on taxation v/hich has been prepared and recommended by the national Tax Association, This pro- vision is as follows: "The power of taxation shall never be sus- pended, surrendered, or contracted away. All taxes shall be uniform upon the same class of property within the territorial limits of the au- thority levying the tax, and shall be levied and collected for public purposes only." (Proceedings of the Pifth Annual Conference of the l^ational Tax Association, 1911, p. 453.) Such a section provides the necessary constitu- tional safeguards against unjust taxation and against the improper use of the taxing power, while it leaves to the legislature the full responsibility for the actual form of the taxation system, with complete freedom to change, adjust and adopt this form as changing conditions may .sai iivoO ecisiqjjo erii ^ci" bO''rozq_c& bnB bsciiBiava a^w rioixlw brue .£d£ ..xieeV/ 06 . ^ n&j-np^rii js? . ey. slIoV/ . loi X9 9J-.n;t8 ni .;t'ioq9i nuo at xictgnel os v/sir eLtii beaJ:oi.ii:rs.o srsri sY/ tBxid" bns ,bQioez':oo sd ieud 10119 at:-i ^s£Li svsilgtf gW xfailquiocoa ct as bsbr.oviB oa aa bZvod'c noiSv^iisaoo scls 'ioubotini odi aXcfieaoq sstsm od" J'l/o ,:Mi;e9i aidi x,Inc *on 10I Y^TSQOiq I0 nox*£oi1J:3aeIo lo slqiofixic srfJ- "io noi -i/^i^fanoo Isi)cn sxiJ" svoiqqi: 9V/ .noid'^xsJ" 'xc ssso..,;^^ boB bs'xxsqaiCi xigocf exiji xlolxlv; nox^tsxsJ' no ncxaxvoiq lenoxJ' -oiq axiiT .noi;l"£XOossA xjsT lBnox;t£K gxC^t x6 bsbnerjaoosi rawollol 3£ ex rtoxaxv -8i:a ocf i9V9n Iljaria aoiiBXAi lo lowoq sriT" IIA .-'isTfe bsiosi'i.jrQO 10 .baiefongnue .bsbnsq lo aajBlo oriSe sdt ncqxr ^.■nollcm sd LL&da caxscf -u£ edi lo ed-lmil l£iio:txii9;^ srlJ nxrlJiw Y^isy:^'^'! i}as bairsl ad Ilexis ;.as .xc* srrj- gni^al ^i.+ xiorit ".^Inc noscLrii.::: oilcfxj-r 10'i ijsloolloo rfoli'I snJ- Ic s3nxi>ssooig:) arij- lo 9on9i9lnoC Ix?iJr:nA ,fioxc"£XOOoaA xsT l&a.oii£\i (.i^5^ .q .II";-! -viiieaoo '^'iSBSsoon edi e9l3Xvoiq noi-oss js douB 3di i3r.z::TiB br.s> noxisxei- ie.vlttu ianis:^B eJbiBiJS9lBa l&aoii edi CJ sav^si :]iiii: ii£ Ijsianoni ai raao^si Si.id' ijne ,£>silqq£ si ssd-^i lo &Iui)9r:o8 ^tnsaeiq WJ3I r^i BO£:£ii iteiLns. Is£>om srii siso xid-xw Y^ij;Ja siwJ-bI ,noxd'exoo32A xbT lBnoid"i3TI sxii \;cf fjsijnsritfrioosi bus beilstb lo voxloc; scJ-siaisJ-nx mio'ixnu b gnid'OfiiOiq od" wsxt b riJ-Jtw • noxovOXBj 9oa£d'Xi3r£nx ri;Jii;o'!l edi lo sBnibssooiq 998 ) l£noid"£ix griJ- lo 9onsi9'inoO li^si/nriA (.eVS .q .OIGI ,noxcfj5ioocaA x^T Tcsqonq 11b iBd:i noxc^s9SaX;a ?.uo oel-c dj^sqgi 9W 6iiJ098 0* ca9i3noO lo aigamsn luo rtoqu fjssir 9cf aonsultni iBiobSx srio Ytf XBi eormtttsdcii. edi Ic J^ngxrufexuprrxlgi sd-i is'l evsn isJ-cfBl ar£T .ssj-js^e srfj "io •iovj3l nl .d'HSxnnigvog a9xlJ'o 9r& avsrf d"on ob y;©^* ;9ijn9V9t sxici' lol been isJ^-TSig d-noranisvos Isisbsl 9xii riciriw noiJ'FXsJ' "ic e90iuos9i Jasv -89 anxisJ-aifixmb^ lo aeecoiq 9lor{v.' odi 9or:J:a bns ;2\;otn9 f)rtB eis&a y,d br.B wsl 9J'/3i'8 sdi tebav bsioubaoo ex escfeJ 9cf bluode XBi 8id& od" id-git llisl odt ^aoi.ii'xodiuB IboqI .e^isie edi r.t hsdeti:pciil9i 164, It is a truism in public finance that the form of any state's revenue system should be adapted freely to the character of the wealth and the tax paying capacity of the people of that state. For this reason we have re- commended the removal of the constitutional hindrances to the development of a greater degree of elasticity in the revenue system. In accordance with this principle we suggest two new forms of taxation which offer possi- bilities for the future since they do not take account of the peculiar character of the state's resources and of the distribution of wealth v/ithin the state. The first of these is a production tax upon the quantity of such natural resources as lumber, coal and other mining products, fish, and other coroinodities which constitute so large a part of the state's original wealth. In Louisiana such taxes are called "seversjice" taxes, and are levied upon those who are engaged in the business of securing natural resources from the soil or water, V/e shall not attempt here a detailed outline of such a system of taxes for this state, but we do believe that the princi- ple is sound, and that such a tax would be eminently prac- tical, as well as satisfactorily productive. .i^ax nnoi sdt ir-di eonsnlJ oilduq nl malu'zi b ei. il oJ" -^Iseil bott^sibR so" bLuaie ii.'SoS^s aunsvoi a 'ed-.s^ts A!:n£ lo to Y^-t2-sq£0 gnl^-Bq Xij* e:li Lna xIJ^Ibow srlJ "io isiosisisio edt -SI Dvsri 9W noas9i 3ir[;t lo*? .sd^^d^a d'eri^ "lo slqosq siid" aooriisiAnixl l3rfoijf-rcMJ"snoo arli lo Isronei srft bshnorftrroo nx \i£oiis&lQ lo eaigsi) isd-fisis b lo Jnaxnqolavsi) sxiJ' oo elqiontic alAi iiJ'Jtvr ©onsJ^iooos nl .raaJ-ave sunsTOi siij- -iaso -toitlo doidvi nci.:jy.x3i lo amio"?: T7sn owl osaggiJa sw drtuoooB sjLncf won ci) Y^rlJ" sonic oiij-vtul onj lol esiitlid bn/i 3301U0SS1 a^eisie adi lo isiosisdo rctluoec edi lo ,o^r.iB s.-fu ntdizxT r{*Ir-9Vf lo noiimii'iisi.b adt lo noqjj :u--.z aoiiouboiq b ax aseriJ- " o c^3 1Xl 9x{T i)ft6 IBOO ,rt9cfisujX 3B sso^tuoasa I^ir^jBH rioua 1c x^J:sciBsjp ^di rioirfw BettLbot-mco lodto bas .jcfsxl ,B&ot:botq gninxxa ladio .iW-Ifisv.'- lenlsiio 5-:'sJi:J3 sdi io d"ix;q jb ssisI oe stsj^^lienoo bciB ,B9xst "9oxi';:tev3 8" bQlIco 31S esxsi doue jsnsleixroil nl lo aasnicx/tf orf* ni f>esi:sn9 sijb orlv; ssoxiJ noqu beireL sts sir,' .rraJ-fiw 10 Ixce vdi rnoil 300iuoj;oi iBix/J'.en ^nl'iuoss m9*eYS B xiojja lo snxl^uo belis&sh b siad J-qntectcfs ion Llsde -ioniiq 9riJ- cfsifcJ- sretled ob sv; d-wcf .sd'^is eldi rot eoxscf lo -o.'H'xq T^I;?n9niflic- t^;-.. ^■.,..^v ■.. "scf r. rioue d'.orid" ens ,finuo8 si 9lq ,9vid"Ojj.borrq T^ItiOifoBlaid-se as XIsw es ,X£old 165. Several states are now making use of such a tax, and it is proving to be a productive source of revenue, as well as a fairly simple tax to adLiinister, (See George Vaughn - The Severance Tax, Bui. cf national Tax Assn., May, 1922.) The second new source of revenue we suggest is a series of local "business license or occupation taj;es. Our discussion of general incoEie and sales taxes in this report has presented the grounds upon which we have hesitated to recocunend itmiediate adoption of such taxes on s. state-wide basis. The concentration of wealth, popu- lation and business activity into the larger cities of the ste-te, and the very large area o-Utside of these urban centers which has little population and a small volume of taxable v/ealth or income, were factors v/hich influenced our decis- ion. Since the revenue problem is probably most acute in the cities, their case could be met by the development, within the municipality, of local business license or occu- pation tejces. The use of such taxes would involve a rather care- ful survey of the local situation, but it is apparent that each city v/ould have here a tax that v/ould be productive, .3dl ,iQ3'axnx:iibfi oi x.fjJ" sl^aiJte Ailtij^l b 3j3 9onj3i9V9£ 9ilT - nrlsuisV g-a-xOsC ooS) , .naaA xsT IfiiioiJ"s"l to .IxjH: .xsT (.3SGI .vsil ai ^393503 9W oi/noToi Tto ao'x;jon W9n bncosa orIT .39-cgJ" nor J'srjjo'^0 '10 oenaozl 3'sanisu:i I.sool "io aalisa s S9xsd" 391.03 iinis or.roorti Isiones lo iioxesijo^ii:. i;jO oyarl gw xfoxri-.? noi^^ ahnuo'ig ari^ bdinsssiq asd oioqs'i airij nx no 3^x^>:^ rlojjs "io .ioi:tqo5.G ^d'^,xb3iic;ii b[:3i~s.ioooi ci .'j9t.:;li?3 3rl[ -jjqon; ,aJ'Iii9\y lo noxJiiidrioonoo grfT .aic^j oi)xv/-oj.3j2 ,3 9i£d- lo at)i:}-i:o lei^isl adi otnl Tfj-ivx.+ j.G assnJtswcf hns noxisl aiodrtgo riscfiu oaerfJ- lo abxad-i;© j391^^ ssxgI •'^lav e:ii hnr^ ,ofsis sl'Jszisi I0 emsLov llsias .<:> hns. noid'sluqoq elifil a.z:L rloxriv -axo9£i lifo booct&ullai :ioxn\r 3ioto.':5l oiov/ ,Dr.tooni 10 xidlBgw nx 9c^uo.^ ;^3o.'n '^Icfi^d' oicr ei rn.9lcro'XT sufravo'r grfi' 9oni3 .nox -jjoco 10 ssngoil 3S9nxa0cf Isool lo ,"\jd"J:l3qxoxnijni srli- nxrltiv/ -91j30 leriJ'B'X S 9Vl0'rnX .ji.:j... c-,-r.;jJ '.-AJi ': :ji.iJ .eii7 i&dt J-ngisqqB ax J'i iud ,noxd"Bud"X8 laool 9i£d" ^o ^9vixra luJ. ,3viioiJboiq orf f)Ii;ow isdt xbJ' b 9iorI yvari bluo\'j y^iio does 166. and at the same time one the incidence of v^hich v/ould not he inequitahle. The basis of such a tax could be either gross earnings or net income, or the tax could be imposed at a series of flat rates, the amounts of which vrere varied according to the nature and scope of different businesses. The flat tax could be used for all concerns doing less than a minimiim volume of business, and the graduated taxes on earnings could be used above this point. Eventually, vrhen the development of the state's population, resources and income power has reached a level vrhich would v/arrant its use, a state-wide income tax should be introduced. The income tax is doubtless the most equitable form of taxation for the purpose of supplementing the property tax, but as v/e have indicated in the report, it is doubtful if the time has yet arrived for the introduction of such a tax. When the principle of taxing persons according to their ability is introduced through the personal income tax, the state's revenue system should be rounded out by the use of a business tax on the net income received by all business concerns from business done v;-ithin the state. The main features of the state's taxation system, in ad- dition to the improvements already suggested, would then be the following: .9ai ion bluow xlox-rv ''■- aoftaJ^ioni sri:^ orto aniiJ- 3nsr= sdi i£. 'onr. I9r{,ti9 ou bluoo x-si' i3 rloua lo aisjsc!' srfT .aldad'ij-'psrij: si f)9 3oqT;-[i 'J'i hii/oo xbJ- 9ri;t lo .sctooni j-an 10 agriinxso ?3oia h^jL^HBV e'taff iioirlw l:o TdTiCOiaG eili ,aeisi iBLI 1c 29x193 b *-s .asaasniaJJd J-nsiallii 'lo sqooa 'on:i e-iuirAi ods od" gaibioooy OBrfJ- 3291 3ni0i) anisonoo Lis lol hozu 9Cf i)Ii;oo ruii i3l1 edZ no p.arjzi be:^BUbs^i-: erli hnr^ , 33 3nJ:3Ucf Jo smsjlo-r i^ssaiciia s noii:-! ,-;Il£Jj-n9vL .Jnioq; ainj uv-oua bysir acf bI;.foo 8snxri'XB9 i)n.3 ssoTix/osat ,noxJ-x.;Iuqoq a'9J"3i3 9ii^ "lo inoauiolgvgb 9ir£:t aii. J-nsiisTT LIuo'.v xfox-"iv; l9V9l s bador^'^i sjsrf rrowoc: etaooai QxiT .baouijoiJ^ni ocf ijluoria xcj ^sjiiouiii -s jivz-oj ..j « is ,931; noliaxBi "io nreol: ola^d-iupg ;J'aofii sdi eseliduob ex. z'Uii saioont as tud .xbJ- Y^iSv^oicr griJ- anxd-ngrnslcrqus "io esoqiwq arij- 10I giKiJ srI- "ix lu'io'Juojj ax ti .-lO/--- I'ii^ ixi >.iij...^i:i)r;x sr.^ii y,7 ,x3i s doL'3 lo noiioubo^iai edi 10- i)9vxiic ie^, asrf anlhioocs 8no3i9:: ^inxx^J- "io 9lqxoniiq ^di nsrlW griooiu I-.i!L a'i--.i 9-f" riguoiA-'J- baojjioid-ni ax x^^^^'-'-- 'i-t-"'* ^^ Yo' J'ixo babasjOTi 9Cf bluoria iiigJ-a-'^a 9irri9VD^ a'9d"sJ"3 sd.' ^xs:^ LIB yd b9Yi909T eriooai d^on grid- no XBi aasnlaud b lo 9eix sxtt ,9J".J-3 ^di- niil^XT/ Bfl; :'- - ■ Triaucf crci- anioonoD esenxajjcf -bs nl tSSBtexa noicfijxsi' a'aj"5;f3 9x1^" to e^isjiset nxsm 9x11 nsxil bluow ,b9ci-a9SSiJa '{^bBsiiB ainQiiioroiqal 9di ot nolix.b rsnxwollo'^ 5di ad 167. First: The taxation of property located vdthin the state, with a diff erentia.tion of intangibles to te taxed at a low flat rate. The principle of taxation accord- ing to benefits received requires that property be taxed proportionately to its value, with a reasonable use of classification of forms of property. Second: The taxation of persons according to their ability to pay. This would be accomplished under the income tas:, which v;ould be levied on the individual's total net income from all sources. The income tax should be a graduated, or progressive tax, since ability increases faster than incomes, and the personal deduction should be low, in order to secure the widest possible diffusion of the tax. Third: The taxation of business concerns doing business within the state on their net incomes from such business. Such a tax would be a business tax, not an income tax, and its basis v<'ould be the net businers income. Such a ta,x should, therefore, be uniform rather than graduated, \7e do not undertake to outline all of the changes in the existing tax laws which these suggestions would en- tail. In this outline of a taxation system which the state might to seek to advance \fe have had in mind the model tare system .?ai edi nxxlJiv/ jyd--sooI x^isqoiq 'lo naxj„;'-3J- oxfT '.cfeiiT -L^ooofi noiJ'sxsJ' J.o oLqloniiq srfT .stjsi J"j3l"i viol 3 ^^. ijaxsJ" 9cf •^d'-isqo-iq J"..3rio 3s:j--i-..'p3'j: jjsyiaoai 3ii*-,nc?u o;^ gnx lo 93;; sXcfsnoassi b ild'xw .sxjlav six oi' YlaJanoiJ-ioqoiq .'y^j-xaqoiq lo siaaol "io noxcJ-xsoxliaaBlo • v -^'-^ 'ilsrij Oj anxJ^iooojs anoai-ic: lo noiixiXJii siiT :hnoo98 9x0- labnu bsdai.lq,ttioooa ed bLisoxr aliiT 'X^l 0^ -{.^tLldB 8 'Isx/biv ibni exio no baxvsl acf £>Ix;ov/ rloirlw ,X3o' srrsooni £)XiJoxIc. --..J o...oonx 3xiT ,3oo'ij;;o2 IIb moil: siaoorrx ieii InSoi adSBotocii x^ilidB oonxa ,xsJ 3vxeayi30'xr 'xo ,x)9d"subx;T:3 s €>d 3cf bluoxCs noxoOJJX)9Ji) Ijjnoaisq srfj- .bnis , asnconi n.sxfd" na^eal lo aoisullib oldxaaoq ' - •=■ '^ r -. - ^•^''- ^-rtsooe oi lobio Til ,-.yoX aaanxaud anxoJb an'xaonoo aaonxaijcf lo aoxd-sxsd- sxET :l)iix{T .aaenxsxrcf xlowa :;:oil eorr^ooni: ien tlerLf no eisia od& nxrfj"xw ,X£J odoonx aj3 ;tou ,xsd" a ^anxaxfJ s 90" JjIx/ow xat s xIcjjB B x£oijS .giaooni s lanlsi;-::' ion edi scf bl^o\^ aiascf ad'! bnjs . baJ-nifbaas rxjsxfi' -coxiJ-xsT mio'vinxr scT ,9iol9ierfj- ,bLuQd^ --■•^ + 893n.3xio rjifj- lo 11*5 snxli-uo oj o^LaJ-'xabnjj ^on ob eXI -no i)ljjow anoxd'3932i/a 939iid- xloirfw aw.ol xcJ- §nxj3ix9 edi nx 9d-3j-3 an'j' lioxiiv/ ngosya noxjxixsd' .3 Ic snt.rj-jjo oidi rf"^ .IxsJ" iuaja-^a xs:)' Xojoa 9xict' iDnxn ni bsd OYsd ■3\7 eonjivbs oi 2Lac3 oi J'xfsxa 168. for state and local governments v;hich lias been prepared by the National Taa Association. It may be that future developments in this state -will never be such as to warrant the full application of this program, but ve know of no better or wiser program which might be held up as a model revenue system, toward which the state might seek to adve.nce as the trend of circvimstances warrejited. (signed) RBEVES AYJAlQTUi. JR. SecretrTy . Respectfully submitted, (Signed) ITATHAi: ECKSTEIIT Chairman. W. V7. ROEERTSOIT I hereby certify that the foregoing is a true and correct copy (with the ex- ception of tv;o charts - pp. 20 and 90) of the original report filed with the Governor, July 1, 1922. D. V/. TWOHY STEPHUK B. L. PMTROSE pst:^r l'cgkbgor U^iAi'i ■On %j--. Secretary. / ALEX POLSOII GEO. I-:. ULLIOTT gRAITK D. OAICUilY RQSERT K. IIARLI:! .331 iQboa B ajEj qu bisri sd drisini liolriv.' raRigoiq laaiw lo lai-Jacf .iD9J"n.3iisr/ asonaJanu/oiio "io isffsiJ sriJ" 3b (^snnxS) I'llLlTGXOS .-^^TATr .rijsrrtiijaxfo (Jb9n3i3) . :u:oH .w .w YHQW:: .. ... 2£80HiIU:i-jo-« /iu.'4;UA: *.sr£:^ v'ixd-iarj vcfo'xo:! I Jjn/? 9i;icJ- ^ ai gnio^o-iol edi . qq - aJTBxfo cv/J- "io cioHqoo iBiiiliiio edi lo (OG bn~i^ 02 .SS^I ,1 '^!;IiJ■Ii .loniovoO IlOSJO^t XEoIA TTOIJj;; .:i .oaD :v>- .'^I3;f 07098 :i*— Y',i!uDlAO .aXUJ^'Z KIJHAH .H THgKOH POLL TAX DATA AKD RECEIPTS To February 28. 1922 . County Adams Asotin Benton Chelan Clallam Clarke Columbia Cowlitz Douglae ?erry Franklin Garfield Grant Grays Harbor Island Jefferson King Kitsap Kittitas Klickitat Lewis Ilason Lincoln Okanogan Pacific Pend Oreille Pierce San Juan Skagit Skamania Snohomish Spokane Stevens Thurston Wahkiakum . Talla Walla Ihatcom TWhitman Yakima TOTALS Total Vote Regis- tration 2 ,340 1 ,961 3 ,929 6 ,821 3 ,638 9 ,641 2 ,206 3 ,883 2 ,810 1, ,433 1 ,952 1 ,350 2 449 12 322 1, ,806 1, 977 113, 065 10 ,362 5, 548 2, 947 11, 614 1, ,868 4, 787 5, 278 4, 179 2, 066 44, 027 1, 327 10, 901 810 21, 147 44, 194 6. 105 7, ,641 873 9. 014 16, 405 10, ,075 19, ,945 2 ,347 2 ,254 4 ,492 7 ,393 3 ,764 11 ,271 2 ,750 4 ,308 3 ,226 1, ,622 2 ,295 1 ,380 2, ,550 14, 734 1, 817 2, 305 145 981 12, 131 6, 113 3. 436 12, 902 2, 121 5, 911 5, 811 4, 632 2, 427 53, 609 1, 615 13, 081 961 24, 704 44 ,540 7, 323 8, 871 941 10, 653 18, 886 11 ,000 24, 267 Rec'd by State 13 7 13 35 18 46 9 17 13 4 11 6 10 80 6 9 577 40 28 14 50 8 23 22 25 12 202 4 47 3 96 226 27 35 4 40 70 51 91 ,936,00 ,344.00 ,236.00 ,124.00 ,023.00 ,388,00 ,888.00 ,560,00 ,044.00 ,732.00 ,424.00 ,302.00 ,696,00 , 320 . 00 ,764,00 ,824,00 ,356.00 ,876,00 ,946,00 ,180,00 ,862,00 ,272,00 ,032.00 ,432.00 ,204,00 ,972.00 ,252.00 ,592,00 ,338,00 ,812.00 ,860.00 ,320.00 ,036.00 ,076.00 ,532,00 ,916.00 ,444.00 ,664.00 .968.00 Rec'd by Coiinty 3 1 3 8 4 11 2 4 3 1 2 1 2 20 1 2 144 10 7 3 12 2 5 5 6 3 50 1 11 24 56 6 8 1 10 17 12 22 484.00 836.00 309.00 781.00 507.00 597.00 472.00 390.00 261,00 183,00 856,00 575,00 674.00 080.00 691,00 456,00 339,00 219,00 236.00 545,00 715,00 068,00 758,00 608.00 301,00 243.00 563.00 148.00 847.00 953.00 215.00 580.00 759.00 769.00 133.00 229,00 611.00 916.00 992.00 Amount Poll Tax collected in State to Feb. 23, 1922 i^umber registered, 490,824 @ $5.00 Number paid in excess of Registration, 12,076 ® $5.00 Total 17 9 16 43 22 57 12 21 16 5 14 7 13 100 8 12 721 51 36 17 63 10 28 28 31 16 252 5 59 4 121 282 33 43 5 51 88 64 114 414,691 490,824 2,011,602.00 502,899,00 2,514 2,514 2 . 454 60 420,00 130.00 545.00 905.00 535.00 985,00 360,00 950.00 305.00 915.00 280.00 877.00 370.00 400,00 455.00 230,00 695,00 095.00 182.00 725,00 577,00 340,00 790,00 040.00 505.00 215.00 815.00 740.00 235.00 765.00 075.00 900,00 795,00 845,00 665,00 145,00 055.00 580.00 960.00 501.00 501.00 120.00 381.00 Number registered i-iovember, 1920 490,824 Number not registered " * 12.076 jvjumber collected from 502,900 97.6% 2.4% 100% c (J ^I BOND ISSUES BY COUl^IES & MUIIICIPALITIES 1920 & 1921 COMPILED roOK AimUAL RE PORTS ON FILE IK DIVISION MUITICIPAL CORPORATIONS BONDS ISSUED Year of 1920 Year of 1921 Total By Counties; School County Road Construct- ion Donahue Roads County General Dike Districts Waterways Port Districts Irj^igs^tion Districts Drainage Districts TOTALS - Counties 3,734,970.00 4,678,450.00 8,413,420.00 3,846,636.00 3,511,150.00 451,000.00 195,000.00 77,000.00 1,698, -500. 00 1,218,350.00 140. 600 .. 00. 3,738,870.00 860,250.00 235,000.00 213,500.00 91,600.00 1,647,900.00 194,400.00 254.300.00 7,585,506.00 4,371,400.00 686,000.00 408,500.00 168,600.00 3,246,400.00 1,412,750.00 594.900.00 14.873.20 6^00 11.8 14.270.00 26.687.476.00 By Municipalities; Taxation Bonds 1,556,469,99 1,090,600.00 Revenue 802,700,00 6,307,300.00 Local Improvement Dists 30.961.64 2.32 10,457,589 .16 2,647,069,00 7,110,000.00 21.419.251.48 TOTALS - Municipalities 13.320.812.31 17.855.489.16 31.376.501.47 GRAND TOTALS - Counties & Municipalities 28.194.018.31 29.669.759.16 57.863.7 77.4^ Note; Report from Garfield County for 1921 not yet on file at 5-17-22, " " Towns of Ilwaco, Sunnyside, Goldendale, Kalama, Water vi lie, Wapato, Grandview, Edmonds, Winlock, Ridgefield, Prescott, Snoqualmie & Selah not on file at 5-17-22. ' ( Year Lev- igd. , 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 STAa or aoc .)r.o a I -xn.U- PC , , J- e,x e,x o.s o.s -x.s iX.S ) - e^i.o ^a.O 01.. 13: Year Lev- Gen. Kill- led Asse saed Valu e Fund tary TAX HISTORY FOR STAm PUrypSBS SIECB STATEHOOD TO DATE Levies In Mi lls Pub- Uni- Jiell . Cheney Ellens- Cent- Cap- Bond lie Perm, ver- Col- Kor- Nor- burg ralia itol Reclom. Int. School ligwy . Hggy. s ity le ge mal mal nor mal nor mal Bld g s . RevolT. 1889 1890 1891 1892 1893 1894 1895 1896 \IU 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 1921 $ 125. 201, 278, 248, 283. 226. 204, 204, 226, 226, 229. 237, 260, 260, 276, 298, 328, 530. 748, 790, 906, 955. 1.0P5. 1,014, 1,031, 1,031, 987. 1,000, 1.035, 1,060, 1.193, 1,177, 165.165, 44^,136 882,450 804,810 110,032 245.182 190,377. 677,668 130,784, 996,294, 137.539, 576,523. 180,734. 940,138, 988.569. 460,979. 5-^2,525. 209,882, 070, 528 , 593.942, 419.826, 247,944, 125.934, 086,251, 475,027 901,697, 277,499, 339. 608 , 082,749 938,644, 620,838, 923.659, 239,240, 00 2.50 00 3.01 00 3.00 00 2.50 00 2.95 00 2.87 3.00 3.06 2.60 2.40 2.50 2.20 2.20 00 2.20 00 2.50 00 2.50 00 2.50 00 1.80 00 3.00 1.60 3.00 2.10 00 00 00 00 2.10 1.23 3.00 2.4' 00 1.25 .85 ■M .00 .50 .25 0.12 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.20 0.10 0.10 0.10 0.10 0.20 0.20 0.20 0.15 0.20 0.11 0.11 0.11 0.20 0.20 0.30 0.30 0.30 0.30 0.20 0.10 0.025 0.025 0.05 0.05 0.20 0.20 0.20 0.20 0.20 0.20 3.16 3.21 ' ?° 60 u )0 ,00 .00 .00 5.00 5.00 3.25 3.00 2.50 2.50 2.18 2.00 1.90 1.90 1.96 00 10 10 24 06 80 34 0.25 0.50 0.50 1.00 1.00 1.00 0.50 1.25 1.00 1.00 1.00 1.00 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50 0.475 0.325 0.475 0.325 0.47' 0.47! 0.475 0.74 0.74 0.74 0.74 1.10 0.45 0.45 0.67 0.09 0.09 0.09 0.09 325 0.09 45 ' 45 0.09 0.09 0.09 o.og 0.09 0.152 0.13 0.152 0.13 0.152 0.13 0.152 0.13 0.20 0.159 0.07 0.07 0.07 0.07 C.07 0.108 0.108 0.108 0.108 0.12 0.10 0.50 0.50 0,50 0.50 0.50 0.50 0.50 0.50 Total Kills Bonus L evied 2.62 3.31 3.225 2.725 3.20 3.12 6.56 6.67 5.70 5.40 6.65 6.40 7.60 7.60 7.60 7.60 7.60 5.40 6.70 4.80 6.70 5.43 5.79 8.81 8.07 7.00 I'M 8.92 10.44 14.68 1.00 14.639 No, of Lev- Total State Tax ies Whe re Found i $ 327. 666, 899. 677, 905. 705. 1.340, ^■363. 1,288, 1.225, 1.523, 1,520, 1,977, 1,983, 2,105, 2,268, 2,496, 2.863, 3.839, 3.593. 5.295. 4,920, 5,062, 5.819, 8.937. 7.6C2, 8. 330. 9.240, 11,072. 17.526, 17,233. 945.99 793.34 395.90 993.11 952.51 431.30 846.14 966.06 945.31 776.51 739.00 471.00 366.00 146.00 116.00 298.00 922.00 132.00 576.00 250.00 812.00 926.00 167.00 449.00 525.00 ^47. 00 942.00 515.00 689.00 573.00 882.00 709.00 605.23 2 3 3 3 3 3 4 4 4 4 4 4 4 4 3 3 3 4 4 4 4 4 4 10 10 10 10 10 11 11 12 12 14 Aud. 1889 P6.9I Computed Equal .1893 Pg.25 " 1894 " 37 " 1895 " 17 " 1896 " 33 " 1897 ■ 7 " 1898 Soh.D " 1899 Pg " 1900 " • 1901 " " 1902 ■ • 190^ • " 1904 " • 1905 " • 1906 ■ " 1907 ■ " 1908 " • 1909 • " 1910 • " 1911 " " 1912 " • 1913 " " 1914 " ■ 1915 " • 1916 " " 1917 • • 1918 " • 1919 • • 1920 " eomputed It n 40 52 54 44 58 U 90 94 l§ 88 80 II 80 ymm- Adams Asotin Benton Chelan Clallam Clark Colum'bia Cowlitz Douglas Jj'erry , Pranklin Garfield j Grant ' Grays Harl: Island Jefferson r King Kitsap Kittitas , Lewis 1 Lincoln Mason Okanogan Pacific J Pend Oreil Pierce ! San Juan Skagit tjkamania Snohomish bpokane btevens Thurston Y/ahkiakum walla Wall "Whatcom whitman 00 00 Yakima :,i oo.j*p. ,v ,Qb .I'SS ' .^£ K ■ ,dc:x :.i 00»:5Q0:^,I 3.x \0^£ ^.x '^'■^,801 oo.-^s^.x ^ic , vde e'.x e.x .^ e,x 9^' e-.i \ . ' ?,i o.s o,s « OC.tf'O.S t -*• )X.S :£,s ( ix.s .5 LV.^ 1 ^ ■ .^. M .-•,:;.>».•. vi: PROPERTY EXEMPT FROM TAXATIOH IK VARIOUS COUMTIBS. u . S. GOVERIMEK r STAEE COUNTY PORT CITY & TOWH CHURCH i KOSP. SCHOOL cmnf,TT;RTT?s HEADS OF FAM. TOTAL Adams 82,130.00 134,800.00 145,699.00 148,300.00 42,250.00 348,725.00 4,500.00 175.800.00 1,132,204.00 462,940.00 Asotin 26,500.00 4,980.00 6,950.00 157.630.00 1,880.00 265,000.00 Benton 20,500.00 60,250.00 118,280.00 21,200.00 85,000.00 550,000.00 7,400.00 440,780.00 437,810.00 398,000.00 1, 303,410.00 Chelan 44-, 820.00 3,770.00 75,010.00 153,110.00 133.990.00 332,270.00 83.00 1,180,863.00 Clallam 4,287,740.00 961,300.00 120,000.00 60,195.00 30,000.00 305,125.00 4,000.00 6,166,360.00 Clark 2,595.528.00 200,000.00 300,000.00 275, 000.00 150,000.00 568,000.00 1,504,028.00 125,000.00 2,250,000.00 7.967,556.00 Columtia 100,000.00 7,000.00 30,000.00 200,000.00 1,200.00 339.750.00 677,950.00 Cowlitz 538,160.00 2,315,860.00 835,670.00 76,400.00 60,000.00 58,500.00 319.770.00 4,000.00 500,000.00 3,872,690.00 Douglas 4,500.00 67,632.00 224,334.00 68,500.00 2,780,410.00 2,125.00 528, 334.00 4,511.555.00 j!'erry 74,600.00 450.00 10,000.00 111,500.00 500.00 192.300.00 389.350.00 Franklin 465,550.00 298,730.00 229.930.00 35,600.00 70,760.00 208,400.00 1,500.00 263,930.00 1,574,400.00 Garfield 47,896.00 288,630.00 375,526.00 156,030.00 80,000.00 33,000.00 4,000.00 740,806.00 1.645,938.00 Grant 1,000,000,00 179,520.00 25,000.00 311,950.00 42^,935.00 768,300.00 2,020,405.00 Grays Harbor (No other report received) 15 000.00 783,300.00 Island 12,000.00 500.00 4,000.00 89,325.00 2,000.00 13,615.00 126,440.00 Jefferson 50,000,000.00 4,500,000.00 250,000.00 350,000.00 70,000.00 290,000.00 10,000.00 270,000.00 55.740,000.00 King 4,075,060.00 2,504,660.00 4,620,000.00 9.218 025.00 108,442,551.00 8,268,230.00 18,259,024.00 560,000.00 18,600,000.00 174,547.550.00 Kiteap 800,425.00 249.364.00 55,000.00 346,000.00 144,000.00 247,192.00 3,000.00 8,470.00 232,650.00 2,077.631.00 Kittitas lewis Linooln 1,878,770.00 874,405.00 263,975.00 967,614.00 237,440.00 594,331,00 834,800.00 5,659,805.00 79.346.00 10,000.00 5,796.00 5,583.00 602,275.00 1,000.00 647,640.00 1,351,640.00 Mason 3,000,000.00 10,000.00 33.345.00 102,680.00 4,000.00 31,130.00 166,015.00 1,000.00 205,382.00 448,250.00 3,450,372.00 Okanogan 5,837,660.00 241,940.00 95,000.00 60,100.00 300,000.00 1,500.00 1,350.0c 7,087.130.00 Pacific 392,735.00 2,632,705.00 98,585.00 15,540.00 9,748.00 253.300.00 130,050.00 400,000.00 3,804,513.00 Pond Oreille (Does not kno '■■) 77,140.00 16,680.00 28,360.00 540. QO 289,140.00 593,010.00 Pierce 389,550.00 84,355.00 264,025.00 l,6l3 113.00 640,505,00 1,299,660.00 1,640,910.00 69,445.00 2,406,415.00 8,412,978.00 Ssll Juan 120,000.00 20,000.00 47,850.00 1,000.00 10,000.00 60,000.00 163,470.00 422,320.00 Skagit 2,250,000.00 2,000,000.00 120,000.00 420,425.00 600,000.00 1,000,000.00 35,000.00 1,500,000.00 7.925.425.00 akamania 66,700.00 2,000.00 15.000.00 80,000.00 2,000.00 36,300.00 1,365,545.00 202,000.00 Snohomish 63,400.00 236.335.00 343,225.00 167,415.00 282,128.00 2 050.00 127,560.00 1,028,635.00 214.905.00 641,695.00 15,685.00 3.056,193.00 Bpokane 272,470.00 2,008,055.00 2,505,000.00 6,160.00 7,240,160.00 13, A-^S, 230.00 Stevens 71,550.00 429,984.00 949.1=>0.00 1,450,724.00 Thurston 125,000.00 8,100.00 3,500,000.00 40,000.00 150,000.00 100,000.00 375.000.00 13,400.00 290,100.00 4.593,500.00 Wahkiakum 210,000.00 25,000.00 1,500.00 2,000.00 20,000.00 800.00 92,990.00 988,500.00 360,990.00 4,849,945.00 walla Walla 556,465.00 375,000.00 576,000.00 480,630.00 69,850.00 490,000.00 1,683,983.00 570,000.00 1,118,350.00 1,149,185.00 70,000.00 Whatcom 499,498.00 573,890.00 75,000.00 2,653,944.00 778,000.00 7,080,350.00 whitman 20,000.00 950,000.00 250,000.00 150,000.00 650,000.00 1,200,000.00 7,210.00 4,005,210.00 lakima 1.12^.^.0.00 ....9.0. .000, op 275.000.00 394.760.00 560.450.00 1,688. 750. oc .102.000.00 3,015.000.00 7.4=;i, 300.00 I 80,414,060.00 24,602,577.00 9,677,025.00 11,128,188.00 116,435,348.00 16,591,901.00 40,253,794.00 1,142,246.00 51,150,936.00 351.396,677.00 r roO TxnU 00.6A£.dO| 00. c^^ . 00. c 00.£^C oo.esx 00. sd? 00.; 00.^ 00 . ..: 00.^4^^ 00.S0£ OO.SI\ oo.xSi oo".'^:^o".o^> L'f OO.IoO.O^S^ -V.r-Jl^ OO.SI^.IS^.-T Gv.-i^il.OO^,! oo.8oet£^^.-f •>o. r?P,oe^.i ^1. -• t -- -■ O0.-f^oc,8o£,l oo.oe6,ieo,i 00. ^^S. If 0,1 OO.O-f^e Ao^ 00. £80. 000, I oo.ee^.^&Ot-f 00. 1 \^ ,-Ho£ , X ,£i'?.^ 00. e-i^o 1^^5,1 .oxe,x O' r r ,X .... .2 00.£X^.£aO.S 00. MX. 001. S 00.£0>,02£,S oo.?r ''^s 00. N" . .^ OO.XSd oo.«:?5 v^ Xta£_ Ihere Found General Military Public Highway Permanent Highway University College Belllnghaa Sormal Cheney Moraal Elleneburg Momal Cap .Bldg . Construction Beclam. ReTOlT. Centralla Hoimal Soldiers Bonus Total 1889 1890 1891 1892 1893 189* 1895 1896 1897 1896 1399 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 19U 1917 191a 1919 1920 Auditor pg. Equal ,og .18 ■ • 17 • " 51 • "25 " 37 • 17 " 33 " 7 • Sch.D " PE.34 " " 66 ■ - 32 ■ • 56 " " 40 - " 52 - . 66 " " 56 " 54 . 44 " « 5S " " Z* " 85 • 90 " 94 • 90 80 Computed 91 1389 1390 1891 1892 1893 1894 1895 1896 1897 1398 1899 1900 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910 1911 1912 1913 1914 1915 1916 1917 1918 1919 1920 t 312,912.96 606,358.89 836,647.35 622,012.03 835.175.00 648,870.00 612,570.00 626,615.00 587,940.00 544,789.00 572,829.00 522,662.00 572,400.00 574,067.00 692,471.00 746,151.00 821,356.00 954,379.00 1,719,210.00 1,197.750.00 2,371,259.00 1,903,120.00 2,005,764.00 1,236,256.00 3.043,425.00 2,528,159.00 1,289,097.00 1,326,570.00 1,350,112.00 1,864,689.00 3,131,363.00 5.372,656.00 2.648.783.29 15.033.03 40,289.63 55.776.49 49,760.96 56,622.01 45,249.04 40,838.07 40,935.53 45,226.16 45,399.26 45,824.00 47,512 .00 52,032.00 52,139.00 27,700.00 29,845.00 32,854.00 53,019.00 114,620.00 149,720.00 158,084.00 135,937.00 191.025.00 110,559.00 111,592.00 113,510.00 206,256.00 197,468.00 300,025.00 ■310,732.00 318,186.00 358,177.00 2^5.447.85 $20,144.82 6,972.06 6,220.12 14,155.50 11,312.26 40,838.67 40,935.53 45,226.15 45,399.25 45,824.00 47,512.00 52,032.00 52,139.00 $ 646,600.00 655,480.00 610,553.00 590,189.00 859,262.00 902,735.00 1, 300,902.00 1.304,701.00 1.384,945.00 1,492,302.00 1,642,712.00 1,723,131.00 1,719,210.00 1,871,434.00 1,976,049.00 1,975,621.00 1,910,252.00 1,909,664.00 1,927,503.00 2,022,527.00 2,062,555.00 2,073.413.00 2,100,174.00 2,320,503.00 2,184,879.00 5.730,334.00 6.286.457.54 286, 374, 790, 906, 955, 502, 1,268. 1.031, 1,031. 987. 1,000, 1.035. 1,060, 1.193. 1.177. 553.00 536.00 296.00 420.00 248.00 126.00 543.00 094.00 399.00 277.00 340.00 083.00 939.00 6S1.00 924.00 239-2» $1,005,036. 1,521,712. 1.547,849. 1,546,916. 1,481,009. 1,500,124. 1.553.908, 1.590,931. 1,790,885 J..l^l^ 477,416.00 481,376.00 490,154.00 439,857.00 468,986.00 740,061.00 766,595.00 784,860.00 883,503.00 86 1.294:963.16 326,653.00 329,704.00 335,367.00 335,165.00 320,885.00 450,037.00 466,172.00 477,280.00 537,266.00 788.750.29 90,458.00 91, 303.0c 92,874.0c 92,315.0c 53,861.0C 152,012.0c 157.463.0c 161,214.00 181,476.00 235.447.35 90,458.00 91,303.00 92.874.00 92,815.00 88,361.00 130,011.00 134,672.00 137,881.00 155,210.00 l$7,;3i,.04 $70,356.00 71,013.00 72,234.00 72,189.00 69,114.00 108,009.00 111,881.00 114,547.00 128,944.00 141.268.71 500,041.00 517,969.00 530,310.00 $ 530,310.00 596,962.00 596,962.00 S88.619.62 588.619.62 $117.723.92 $1.177.239.24 9, 11. 17, 327.945 666,793 899,395 67V, 993 905.952 705,431 340,846 363, 966 288,945 225.776 523.739 520,471 977.366 933,146 105,116 266,298 496, 922 863,132 339.576 593.250 295,812 920,926 062,167 819,449 937,525 327,447 218, 942 602,515 330,689 240,573 072,382 526,799 2 ^ i.60 5 .99 • 3* .90 .11 .51 .30 .14 .06 .31 .51 .00 .00 .00 .00 .00 .00 .00 .00 .00 00 00 00 00 .00 .00 .00 .00 .00 .00 .00 .00 .00 i2i. 1,201,266.04 959,555.71 2,733,901.71 1,715.891.62 117,723.92 1,177.239.24 150,163.393.40 o University of California SOUTHERN REGIONAL LIBRARY FACILITY 405 Hllgard Avenue, Los Angeles, CA 90024-1388 Return this material to tfie library from \wtiich It was borrowed. rnia Ui al