These states present a variety of illustrations of different methods of taxation, involving departures from the uniform general property tax. In most cases a much larger use is made of taxes on corporations for state revenue than in Illinois before 1919; and special taxes on mortgages, intangible property and incomes are successfully used in place of attempting to tax intangible property under the general property tax. The tax laws of these states will indicate some of the methods which could be considered in Illinois, if the restrictive provisions of the present constitution were relaxed or removed.

New York. The constitution of New York state contains practically no restrictions on the legislature in matters of taxation, but before 1880, the general property tax was in use as the principal source of state and local revenue. Serious complaints as to the escape of personal property from taxation, especially in the case of corporations, led to the introduction in 1880 of new franchise taxes on corporations. Since then corporation taxes have been greatly developed ; and in addition an elaborate series of special taxes has been established-including an inheritance tax, an excise tax, a motor vehicle tax, a tax on transfers of shares of stock, a mortgage recording tax, a tax on secured debts or investments, and (in 1919) a tax on incomes.

Corporation taxes include organization and license fees, an annual franchise tax on capital stock, additional taxes on certain classes of corporations based on gross earnings and dividends; and a tax on the income of other business corporations. About 30 per cent of the general revenue of the state has been received from corporation taxes. Other important sources of state revenue have been the excise, inheritance and stock transfer taxes, and automobile license fees. For several years the direct property tax was almost eliminated for state revenue; but in recent years about 20 per cent of the state general revenue is from this source.

The mortgage recording tax is at the rate of five mills on the dollar; and the net revenue is divided equally between the state and county.

The tax on investments is at the rate of 20 cents per annum on each $100 of face value. This applies to serial bonds, notes, debentures, etc., except bonds secured by mortgage on real property wholly within the state.

A tax of three per cent on the income of mercantile and manufacturing corporations was imposed in 1917, corporations subject to this tax being exempt from taxation on their personal property, and from the capital stock and the annual franchise tax. Two-thirds of the revenue from this tax goes to the state and one-third to the localities. In 1918 this tax yielded approximately $18,000,000.

In 1919, this corporation income tax was extended to all "business corporations"-applying to all corporations except public service, insurance and financial companies. The rate was increased to 41⁄2 per cent.

At the same time a new tax on individual incomes was imposed, at rates from 1 to 3 per cent on the total income in excess of the exemptions allowed under the United States income tax law. The revenue from this tax is to be divided, one-half to the state, and onehalf to the towns and cities in proportion to the assessed valuation of real estate. Those subject to the income tax are exempt from taxation on certain intangible personal property (money, bonds, choses in action and shares of stock).

New York State Revenues, Fiscal year ended June 30, 1918.

Pennsylvania. Under the Pennsylvania constitution, taxes must be levied and collected under general laws, and must be uniform upon the same class of subjects within the territorial limits of the authority levying the tax.

The uniform general property tax has never been imposed in Pennsylvania. Real estate is subject to county and other local taxes, as is certain specified classes of personal property; but there is no state tax on real estate. About two-thirds of the state revenue is collected from taxes on corporations. There is also a state tax on collateral inheritances, a system of business licenses, motor licenses. and some other special taxes and fees.

Corporation loans and other intangible property are subject to a uniform tax of four mills on the dollar of fair cash valuation. The tax on corporate loans is deducted from the interest by the various corporations (public and private) and paid directly to the state treasury and accrues to the state. The tax on other intangible property (money at interest, credits, mortgages, and other securities) is collected by the counties. Before 1914, the proceeds of this tax were paid into the state treasury, and three-fourths of the amount was returned to the counties; but since then the whole proceeds are retained for county purposes.

The following table shows the tax receipts from corporate loans and the assessment and tax receipts from other intangible personalty for a series of years:

Receipts from taxes on corporate loans and other intangible property in Pennsylvania.

It will be noted that the assessment and tax receipts from intangible property increased rapidly after 1885; and the tax receipts from corporate loans have also gained steadily. In 1913, the last year when the tax from intangible personalty was paid into the state treasury, the total receipts from both sources aggregated $7,600,000, representing an aggregate of nearly $2,000,000,000 of such property. This amounts to about one-half of the real estate subject to taxation in Pennsylvania.

Since 1913 the tax receipts from corporate loans have increased more rapidly, to $3,247,983 in 1916. It is probable that the local tax on intangible personalty (which is not now reported in the reports of the Auditor General) has also continued to increase.

Pennsylvania State Revenue, year ending November 30, 1916.

I. From corporations and associations:

Maryland. The constitution of Maryland from its first adoption in 1776 contained a provision that every person ought to contribute his proportion of public taxes according to his actual wealth in real or personal property. In 1915, a constitutional amendment was adopted definitely authorizing the classification of property for taxation, to be uniform within the taxing district and upon the class of property subject to the tax levy.

Before the adoption of this amendment, a special tax was imposed in 1896, on intangible personal property, including all bonds and certificates of indebtedness issued by corporations and stocks of corporations. Ordinary mortgages, book accounts of merchants and savings accounts are not included. The tax was at first levied at the uniform rate of 30 cents on the $100 (3 mills on the dollar), for local purposes, plus the direct state property tax, which varied from 16 to 31 cents. Since 1914, a uniform rate of 45 cents is imposed, of which 15 cents is for the state and 30 cents for local purposes. and savings banks are subject to another special tax.

Bank shares

The financial results of the special tax on intangible property is shown in the following table, giving the assessed valuation, tax rate and revenue for 1896 (the last year under the general property tax), 1897 (the first year under the special tax), 1915 and 1918.

Under the special tax, the assessed valuation of intangible property in 1897 was nearly ten times that of the preceding year when subject to the general property tax, and the revenue was more than doubled. Since then, these figures have increased more than fourfold.

In 1918 the assessed valuation of intangible personal property was 25 per cent of the assessed valuation of real and personal property subject to the general tax. About half of the state revenue is derived from a state tax on real and personal property, levied to meet expenses in connection with state loans and public schools. Other state revenues are from taxes on gross receipts, insurance companies, collateral inheritances and motor vehicle and other, licenses.

Massachusetts. The Massachusetts constitution of 1780 provided for proportional taxes on property, and also for reasonable duties and excises. A constitutional amendment, adopted in 1915, definitely authorized an income tax, to be levied at a uniform rate upon-incomes from the same class of property, and for the exemption from proportional taxes of property the income from which should be taxed.

State revenues are derived mainly from a state tax on general property, corporation and inheritance taxes and sundry licenses and fees, as shown below:

Massachusetts State Revenue, Year ending November 30, 1917.

Following the adoption of the income tax amendment, a classified income tax was imposed by the state in 1916, the proceeds to be distributed to the cities, towns and other local districts. There is a 6 per cent tax upon the income from intangible property, a 3 per cent tax upon dealings in intangible property, and a tax of 12 per cent upon incomes from annuities, trades and professions. Income from real estate, dividends of Massachusetts corporations, savings bank deposits, and from mortgages on Massachusetts real estate are not subject to the income tax, as the property from which the income is derived as otherwise taxed. Property, the income from which is taxed, is exempt from other general taxation.

From the proceeds of the income tax local communities are first reimbursed for the loss due to the exemption of intangible property; and the excess of income tax collections is also distributed to the local treasuries.

The financial results of this tax for the years 1917 and 1918 are shown below.

From the distribution of the excess over the reimbursement for the personal property tax, it appears that the income tax has yielded from $3,500,000 to $4,500,000 more than the former direct tax on intangible property. The tax commissioner reports a general feeling of satisfaction with the new tax. Those with large incomes are paying more than before; and many who paid nothing before are now contributing their share; while many of small means are given relief by the exemptions for small incomes allowed under the law.

Iowa. The constitution of Iowa does not require a uniform general property tax; but the state tax laws have imposed a general