AMERICAN TAXATION AND EXPENDITURE.

Globe, Volume XXIII, Issue 2234, 26 April 1881, Page 4

AMERICAN TAXATION AND EXPENDITURE.

[" Southland Times."] The following facts aro obtained from a paper recently published in the " Contemporary Review," which, though over the non de plume of "An American Statesman," is evidently authentic. The author prefaces his paper by the remark that there is probably no country in the world in which the people pay their taxes more easily and more cheerfully than they do in the United States. There seems to be a general impression that since it is a free country, in which the people tax themselves, everything must be for the best. The|subject of taxation is made difficult and complicated by the fact that separate taxes are assessed by the nation, tho State, the county, the town, and sometimes the district. In some towns the taxes are very small, and in others they are enormous. There is no general principle of valuation. Tho common mind cannot grasp the subject. The abounding prosperity of the country makes the subject of taxation one of indifference. But tho time is at hand when the publio will be roused to look the question of taxation in the face.

The author disclaims in his paper any further object than to give English readers a clear idea of the system of taxation and public expenditure in the United States, and tor this purpose he confines himself to the State of Massachusetts. He continues : The right of a State to tax its citizens rests upon its sovereign power to oontrol within constitutional limits all persons and things within its territory. The system of taxation should be permanent. Constant changes are fatal to prosperity. In regard to indirect taxation in the United States, no one can tell what absurdities the Congress may bring forth. The fundamental prineiple should bo equality in tho distribution of taxation ; it should reaoh all classes of people and all kinds of property alike, without unjust discrimination in favor of any. In the United States the tendency is contrary to that of Eastern Governments, favoring the poor at the expense of the rioh. Certain kinds of property are exempted from all taxation. In some places personal property is exempt. All property in Government bonds is exempt ; also, generally, churches, schools, and benevolent institutions. Taxes are assessed to interfere as little as possible with industries.

The author then gives it as his opinion that the expenses of a State should be within the means of the people, so as not interfere with the accumulation of capital by individuals. Expenditure for goneral food has had little attention from American statesmen, but the subject of late years has demanded the attention of writers on political economy. There are many who fear that thore is an inclination of the non-property-holding majority to vote away the monoy of the rich, and that party leaders are more and more inclined to win tho favor of the masses by encouraging extravagant expenditure. Thus the principle of universal suffrage is on its trial, and it cannot be denied that there is danger in the direoiioa indicated. The experience of New York is too startling to bo forgotten by anyone in the country. Thero is a city in New Jersey whose public debt is greater than the total valuation within its limits, So far as property-holders are concerned taxation by universal suffrage may be taxation without representation, as much as taxation by a simple despotic sovereign. It would be a triumph for tho advocates of free education if by its means tho people could be convinced that the interests of the poor and the rioh are identical in the matter of taxation and public expenditure. Horo, by way of explanation, we may state that in giving figures we havo changed dollars into Bounds sterling, in order to make the subject more intelligible to our readers.

Tho author informs us that tho State taxes of 1879 were as follow : Direct tax £IOO,OOO Savings Banks 301,970 Insurance taxes 50,318 National Banks, deducting amounts paid to towns 30,049 Corporations, deducting amounts paid to towns ... ... ... 55,886 Licenses and fees, about 35,000 Total £573,223 In addition to these State taxes the towns and cities assess on real estate and personal property, with certain exceptions, and on all incomes exceeding £4OO a year. The rate of taxation on property and income is the same, and it varies in different towns from J to 3\ per cent, The total taxation of the State (exoluaive of national) for 1879 was £4,951,185 for a population of 1.651.652, and a total valuation of property of £316,951,360. This, the author odds, gives an average tax on property of about 1 \ per cent, and per head of £3. Tho debts of the State and of the towns amount in all to about £18,000,000. There are towns, including Boston, where those only paying a poll tax are in a majority, and they can vote to raise taxes to any extent without, increasing their own taxes at all, and to this the author adds that he saw no reason why they might not vote a tax of 100 per cent., and thus confiscate all property. How would the Jaw work in Ireland ? The income tax is another source of complaint,

the amount exempted being too large, and the whole method of assessment is a discrimination against the rich. It is everywhere unpopular. The amount of church property exempted is moro than £6,000,000, and schools and other institutions at least equal in extent.

To ascertain the total taxation, that of the National Government must be added, and the author computes the eharo of this on Massachusetts to be £5,000,000, thus making the total taxation of this State to be £9,951,185, or about £6 per head of population. The author then gives an estimate of the amount paid in taxoa by different classes, and commencing with the purely laboring man—he pays 8) a year to State and town taxes, and ho pays nothing else than duty on the imported goods he consumes, which may amount to £2. The wage of unskilled labor is 5s a day. Taking a step higher, the man who has £IOOO worth of property and £240 ineomo from his labor, pays a poll tax of 83, a property tax of £ls, ar'd an indirect tax to the National Government of the same amount, £ls ; total, £3O Bs. Taking another step higher, a man who has £25,000 worth of property and who lives on the income of this, say £BOO a year. He pay« poll tax, 83 ; property and income tax, £3OO ; an indireot tax to the National Government of £40 —total, £346 Bs. This is 43 per cent, on his income, and there are many holders of real estate whose income is not sufficient to pay their taxes. The author adds, whatever may be said in favour of this scheme, it certainly does not illustrate the principle of equaliry. The national taxation is much more equally divided than that of the Btate—the income of £6opaying 3 J, thatof £2805 J, and that of £BOO 5 por cent. The author adds that it is thus not in indireot taxation that the principles of equality are departed from, but in the direct, taxation under the control of the popular voto in States and citie* imposed by non-tax-paying voters. Here taxation sometimes becomes confiscation. Again, the author adds, a town may be ruined by its publio improvements; and it ib said again th3t the taxes are paid easily and without complaint. There is truth in this, but it is a question whether this is not the result of ignorance and whether the people ought not to complain. The valuation of tho Stale has increased 100 per c:int. in twenty years, but taxes have increased 350 per cent., and on the whole it cannot be denied that taxes are greater than the people can afford to pay. The most important item of expenditure in the State is for publio schools. The amount expended for those in 1879 was £1,035,497, but it is questioned whether the enormously increased expense of education is justified by a corresponding improvement of education given ; and also whether the State has a right to Bsseeß taxes to support free High Schools. Great sums have been expended on school buildings the rate being about £120,000 per annum. The Education Board publishes tables annually showing the amount of money expended by eaoh town, and the " banner town " of the State ia not that which has the best schools, but tho ono that taxes property moot heavily for school purposes. The defects of the system are now a subject for publio discussion, amongst several of whioh are mentioned—failure to educate and develop the thinking powers of ohildren, the lack of interest on the part of the parents, and failure to teach good behaviour. There is a growing difference of opinion, as we have said, as to the right of the State to maintain high schools at the publio expense, and the author states that those opposed to suoh maintenance claim that tho principle on whioh such schools are founded is faleo ; that the education given is superficial and adapted to raise up a multitude of conceited, half educated demagogues, too grand to work, and feeling that the community whioh has educated them is bonnd to find places for them. The Board of Education takes an extreme view, appealing to popular favor on the gr jund that these schools have a levelling influence, and tend to break down all social distinctions. The opponents of the system do not deny that education is a good thing, nor that it is essential for the maintenance of free government, especially one resting on universal suffrage. But they claim that free education should be limited to common schools, that the State has no right to tax property to give higher education to the poor, and that the " general good" does not demand any such expenditure. They also allege that experience has proved that under the old system thoso who were capable of appreciating a higher education had no difficulty in securing it. The Board appears to go to the length of giving a complete professional education free ; to which the author adds, one step seems to follow the other logically, until we reach pure Communism. The next important item of State expenditure is for charitable institutions, in which £91,052 was spont in 1879. Another important item is for highways, £1,000,000 being the annual amount of expenditure, but much of which is thrown away, as in no other civilised country are tho roads so bad. The interest of the debt amounts to £1,000,000 annually. The total expenditure being as follows : Interest £1,000,000 Education 1,000,000 Charitable Institutions, Pensions

to the poor 600,000 Highways 1,000,000 Administrative, Legislative, and Judicial 600,000 All other expenses, including payments on debt 800,000

£5,000,000

The national'exponditure, of course, is to be added to this, but the author does not state the particular amount apportioned to the State of Massachusetts, but he jrivea the total expenditure of the Union as £53,533,591, the national debt being about £400,000,000.

The author concludes with the remork that £6 a year per capita tax would not seem small in England, even for a wealthy and prosperous State. We are careless and often extravagant. There are difficult questions to be studied and answered. There are dangers, serious dangers, perhaps in the future, but there is nothing which may not be avoided by wise statesmanship and tho goodwill of the people. The dangers are not more than those which beset European Governfcitnts in regard to the relations of capital and labour, and distribution of taxation, Whatever be tho danger of universal suffrage, tho principles of civil and religious liberty in common with England are the surest safeguards against popular discontent,