taxes collected on property made to bear the burden of supporting the government are most inadequately and unfairly laid upon such property.'

The State Bureau of Labor Statistics made two extended reports relating to taxation. Its fifth biennial report, in 1888, included the results of a detailed study of mortgage indebtedness throughout the state, which furnished data for comparisons with the assessment of mortgages for taxation. The eighth biennial report of the bureau, in 1894, was devoted entirely to a comprehensive investigation of taxation, showing the inequalities of the existing system with reference to the taxation of both personal property and real estate. This report made the following recommendations:

tion.

1. The divorce of state from local taxation.

2. The separation of improvement from site values in tax returns. 3. The organization of boards of review.

4. Maps and records of taxable property.

5. A constitutional amendment to authorize local option in taxa

6. A constitutional amendment to establish site value taxation. These investigations indicated the small extent to which mortgages and other intangible property were assessed and taxed.

In 1895, Governor Altgeld asserted, in his message to the general assembly:

"Whatever may be said of the theory of our revenue system in this state, it is in its practical workings, a grant of injustice. Under it the great concentrations of wealth contribute comparatively little, while the owners of small and moderate sized properties are forced to bear nearly all the burdens of government."

Two years later, he referred again to the subject, and stated that: "Every governor for more than twelve years has urged a revision. of our revenue laws and pronounced the existing system a gigantic fraud."

After the passage of the assessment law of 1898, Governor Tanner, in his message of 1901, stated that:

"The revenue laws still need revision and amendment."

In 1907, Governor Deneen recommended the formation of another revenue commission; but vetoed the bill passed because it provided. that it should be composed of members of the general assembly. Two years later he renewed this recommendation; and an act was passed providing for the appointment of a special tax commission, to investigate the system of taxation and to recommend needed changes. This commission, consisted of John P. Wilson, chairman, Alfred M. Craig, Edmund J. James, secretary, B. F. Caldwell, A. P. Grout, Harrison B. Riley and B. L. Winchell. It had prepared a comprehensive report on the Taxation and Revenue System of Illinois, with some comparisons with methods of taxation in other states and countries; and also a compilation of the Tax Laws and Judicial Decisions. In its

report to the governor in 1911, the commission criticised both the system of tax administration, and the uniform general property tax prescribed by the state constitution.

As a means of improving the administration of the tax laws, this commission renewed the recommendations of the revenue commission of 1886 for a permanent state tax commission and for county assessors. The recommendation for a permanent state tax commission has been finally acted on in 1919, and such a commission has now been established. The principal conclusions of this commission in relation to the present system of taxation were as follows:

1. Undervaluation, high tax rates and "a marked inequality in the assessment of different classes of property and of different pieces of property of the same kind owned by different persons.'

2. "The most numerous complaints and the most serious inequalities arise in the assessment and taxation of intangible personal property, such as moneys and credits, mortgages, bonds and stocks.. It is evident that such intangible holdings . . . cannot be uniformily or equitably assessed under the general property tax . . ."

"As a result of the present situation there is a notorious evasion of the terms of the revenue law, which are unjust in principle and unenforcible in practice

"Our study of the tax system of other states shows clearly that other methods of taxation than the general property tax are both more equitable and at the same time more successful as means of raising public revenue from intangible property..

But no such methods can be introduced in Illinois under the present constitutional restrictions requiring the taxation of all classes of property on an absolutely uniform basis. It therefore becomes necessary for any adequate change in the system of taxation that the constitutional provisions be amended."

3. ". . In regard to some kinds of tangible personal property, exemptions would seem to be advisable, and for other kinds other methods of taxation would be better than the present ad valorem system. But here again no changes from the present basis can be legally made without a change in the constitutional provisions."

This report was submitted to the general assembly by Governor Deneen with a special message commending the recommendations of the commission.

Governors Dunne and Lowden have also advocated changes in the revenue law, with special reference to the creation of a permanent state tax commission in place of the state board of equalization.

V. PROPOSED CONSTITUTIONAL AMENDMENTS

A number of proposed constitutional amendments relating to taxation have been introduced in the general assembly.

At the adjourned session of 1874 two proposed amendments were introduced in the Senate, one to authorize exemption from taxation of property not to exceed $1,000, and another to authorize an income tax. The latter came to a vote in the senate, but failed to receive the required two-thirds vote. Other resolutions proposing amendments to authorize an income tax and to extend the list of enumerated occupations and interests subject to special taxes were introduced in 1875, 1877 and 1879, but were not acted upon. In 1901 and 1905 proposed amendments to provide for local option in taxation were introduced; but no action was taken. In 1907, a proposed amendment was introduced to authorize classification of property; but this also failed to secure favorable action.2

The special tax commission of 1910 recommended an amendment to the state constitution to authorize the classification of personal property for taxation. As was pointed out by the commission the proposed amendment would not of itself make any change in the system of taxation, but would remove some of the restrictions on the general assembly and make possible the enactment of statutory changes in the future. No action was taken by the general assembly in 1911 or 1913. One member of the commission, who signed the report, also submitted a minority report in favor of still broader power in the general assembly.

On November 5, 1912, the following question was submitted to the voters of Illinois under the Public Policy Act:

"Shall the next general assembly (in order that the people may be relieved of a system of taxation which places a comparatively heavier burden upon the poor man than upon his wealthier neighbor, which is unjust to all who fall under the full force of its operation, and which places a premium upon dishonesty) submit to the voters of the state of Illinois at the next following state election an amendment to the state constitution providing for the classification of property for purposes of taxation, with taxes uniform as to each class within the jurisdiction levying the same?"

The vote upon this question was: Yes, 541,189; No, 187,467. This was the largest affirmative vote ever cast in Illinois up to that time on any question submitted for popular vote, except that for direct primaries in 1904.

2 Civic Federation Study No. 2, Ch. 5.

Amendments submitted in 1916. In May, 1915, the general assembly by a vote of two-thirds of each house, voted to submit the proposed constitutional amendment recommended by the special tax commission of 1910. This amendment received the votes of 35 out of 51 senators and of 130 out of 153 representatives. The proposed amendment read as follows:

"Article IX, Section 14. From and after the date when this section shall be in force, the powers of the general assembly over the subject matter of the taxation of personal property shall be as complete and unrestricted as they would be if sections one (1), three (3), nine (9), and ten (10) of this article of the constitution did not exist; provided, however, that any tax levied upon personal property must be uniform as to persons and property of the same class within the jurisdiction of the body imposing the same, and all exemptions from taxation shall be by general law, and shall be revocable by the general assembly at any time".

This proposed amendment was voted on at the general election in November, 1916. There were 656,298 votes for the amendment, and only 295,782 votes against. This was an over-whelming majority of the vote on the proposed amendment, and as it was also a majority of the vote at the election for members of the general assemly, the state canvassing board declared that the amendment was adopted. But, in the case of People v. Stevenson, the Supreme Court held that a majority of the total vote at the election, and not merely a majority of the vote for members of the general assembly, is required by the constitutional provision, and as the affirmative vote did not meet this test, it was held that the amendment was not adopted.3

It is clear, however, from the vote on this public policy question in 1912 and on the proposed amendment in 1916 that a large majority. of those expressing an opinion were in favor of changing the present constitutional requirement for uniform taxation of all classes of property.

The proposed constitutional amendment voted on in 1916 would have enabled the general assembly to deal with some of the difficulties and defects in the present methods of taxation. But the change proposed was limited in character, and not sufficiently comprehensive to meet all of the criticisms or to make possible some methods of taxation (such as a graduated income tax) now successfully used in other states. Further comments and conclusions on constitutional provisions will be found in chapter VII of this pamphlet.

3 People v. Stevenson, 281 Ill. 17 (1917).

VI. TAXATION IN OTHER STATES

In tracing the development of provisions on taxation in the state. constitutions, four periods may be noted: before 1800, from 1800 to 1860; from 1860 to 1900; and since 1900. Up to 1860 the general movement was towards more detailed provisions requiring a uniform general property tax. During the next period, constitutional provisions became still more detailed, and some modifications of. the general property tax were authorized. Since 1900 there has been an active movement for further constitutional changes, in which there is a decided tendency towards a relaxation of the earlier provisions.

Constitutional provisions before 1800. During the colonial period there was but little taxation and no clear tendency toward any definite system. Of the first state constitutions adopted during the Revolution, about one-half contained a provision that taxes should not be levied without the consent of the people or their representatives. Four states adopted provisions which mark the beginning of the theory of the uniform general property tax. The Maryland constitution of 1776 provided that each person should contribute his proportion according to his actual wealth in real or personal property. The Pennsylvania constitution of 1776 contained a provision that each person is bound to contribute his proportion to the expense of protection; and the same provision was adopted in the Vermont constitution of 1777. The Massachusetts constitution of 1780 had a more definite provision giving the general court full power and authority:

"to impose and levy proportional and reasonable assessments, rates and taxes upon all the inhabitants of, and persons resident, and estates lying within the said Commonwealth; and also to impose and levy reasonable duties and excises, upon any produce, goods, wares, merchandise and commodities, whatsoever brought into, produced, manufactured or being within the same."

The first of these clauses has been held to require a uniform rate of taxation on all property; while the second authorizes other duties and excises which are not subject to the rule of uniformity.

In the first constitution of Tennessee, adopted in 1796, appeared the earliest provision that taxation should be uniform, but with specific provisions which applied the rule of uniformity to acreage and not to value.