The Nonpartisan Leader Newspaper, October 25, 1917, Page 12

B e e . The Farmer Officials at Work A Few Things the North Dakota Tax Commission Is Doing for the People of the State Under Nonpartisan League Admlnlstratlop BY RALPH HARMON IX years ago the legislature of North Dakota established a state tax commission for the purpose of insuring efficient administration of the tax It gave the commission a lot of laws. duties and powers and some money with which to start work. Amniong those duties and powers are these: To examine into cases where the evasion or violation of the laws for assessment and taxation are complain- ed of or discovered; To study the tax systems of other states and countries and make recom- mendations for improving the laws of North Dakota; To furnish the governor and mem- bers of the legislature’ with reports showing all the taxable property in the state and the value of the same; To assess at their actual value all light, heat and power companies doing business in the state; - And (very important) to have gen- eral supervision of the tax laws, as- sessments, boards of equalization, etc., “to the end that all assessments of property be made relatively just and equal at true value.” For six years the state tax commis- sion tried to discharge its duties, but for six years it was hampered by a board of equalization that ignored its recommendations, refused co-opera- tion and let things drift. The tax com- mission soon found that the railroads were being outrageously underassessed, while the small property holders were, being loaded down with the burdens of government. It went to the pains to secure a careful valuation of the.rail- roads, and urged that their assess- - ments be raised, but all arguments, figures and pleadings fell on deaf ears. THEN CAME THE NONPARTISAN LEAGUE Then came the Nonpartisan league - administration. Almost over night the tax commission was galvanized .into new life. It found a board of equaliza- tion that wanted to hand out a square deal to everyone. It~ found officials who: wanted to make the railroads pay their share of the cost of state govern- ment. - For the first time in its history, the things that the commission had “discovered” were listened to. For four years it had been recommending that the railroad assessed valuation be raised about $21,000,000, its recom- mendations varying scarcely $1,000,000 . from year to year, but net until the farmer administration came into power, bringing a new board of equalization, was this action taken. Then the as- sessment was raised from $51;340,543 to $70,762,452 this year. : But this amount of the railroad as- sessment is only a part of the escaped taxation which the tax commission has * rounded up under a friendly admin- istration.. Most of the other increases and adjustments of assessed valuation mentioned in the first article of this series were largely effected through the tax commission. Now it has undertaken a gigantic task that will add $250,000,000 more to the assessed valuation of North Dako- ta—$250,000,000 of the most profitable kind of property that has never paid a red cent of taxation. This is “moneys and credits”. The lame old law under which moneys and credits have heen taxed was so easy to dodge that the moneys and credits being returned for taxation have been rapidly dwindling year by year, even while the state was enormously increasing in this kind of wealth. But no more, PUT MONEYS AND CREDITS ON THE TAX ROLLS The tax commission is already well along with its plans to put the first in- stallments of this wealth on the tax rolls, and when the next annual session of the board of equalization convenes at Bismarck there will be a new story to tell of things done for the people. The commission knows it can not go at this kind of a proposition “hammer and tongs” and make the most rapid progress, but it is going to seek the co-operation of all taxing. officers in the state to get as much of-this in- tangible property listed as possible. The first step will be to hand out to property holders a specially devised blank whereon they are to list all their “moneys and credits”. They will have to swear to the correctness of this list and there is a penalty for violation. This move to list $250,000,000 of es- This is the fifth article of the series telling what the farmer gov- crnment of North Dakota, elected through the Nonpartisan league, is doing. ‘‘What have they done?’’ the gang political press was foolish enough to ask. - Well, they have made a tre- mendous start toward restoring the government of the state to the people, and théy have been in office less than ten months. The politicians had charge for decades. But these farmer state officials are anxious to answer the question, ‘“What have you done?’’ They have done so much in the few months they have been in office that this series of articles, telling just the plain facts, has silenced the cry of the politicians on this score. The present article deals with the attitude of the farmers’ adminis- tration toward the state tax commission, a -body of tax experts whose recommendations fell on deaf ears during the regime of the politicians. But the farmers in office are listening to the facts and figures about taxation and carrying out the expert ideas of this commission. It is a good story. Read it. caping wealth for taxation is not the achievement of the tax commission alone. Before the commission could act, it required a new law, and that was passed by the farmer legislature last winter. (The more the people learn of the good things their first legisla- ture did, the higher will it rise in their estimation. It outdid all the politi- -cians’ legislatures that ever convened in/*North Dakota.) - Under -the law passed last winter moneys and. credits will be taxed three mills on the dollar of their fair cash value, and at the very This is one of the privately owned public utility plants of North Dakota, the Hughes Electric company of Bismarck. The A clause from the law makes clear its purpose: “The taxation and revenue laws of this state shall apply with equal force to any person or persons representing in this state business interests that may claim domicile elsewhere, the in- tent and purpose being that no non- resident, either by himself or through any agent shall transact business with- in the state without paying to the state a tax corresponding to that paid by its.own citizens.” In. other words, it proposes to get taxing and tax-colle_cting machinery up-to-date, It embraces five principal features, and here they are: FIVE FEATURES OF NEW EFFICIENCY PLANS A gross earnings tax on all public service corporations, based upon a rate to be determined by the most scientific methods and the most reliable data in existence., In fact the assessment of railroads this year was placed at about the figure -where it would be if the railroads were assessed on gross earn- ings, for the commission has all the data as to gross earnings, sworn to under oath and penalty by the railroads and .it will not be difficult to establish this system. Also a graduated income tax instead of the personal property tax in its pres- ent form, or a combination of income and personal property tax in which the personal property will be deducted from the income; 0 An improved inheritance tax, which will double the returns to be had from the present inheritance tax law, which was enacted by the farmer legislature last winter; A land tax much as it is now; And Tfinally a license privilege tax, so that firms doing business in North Da- kota ‘will have to pay for the privilege, This latter will not produce much revenue, but will compel business firms to be listed and thus .aid -in finding them for purposes of taxation under the other features mentioned. This plan is to be worked dnto a farmers’ administration for the first time in the history of the state is investigating and checking up on these private monopolies with a view of making them pay their just share of taxation. next tax-paying period- following the 1918 board of equalization meeting, the state will begin to reap.the benéfits of this bill. < I say “begin to reap,” for such a law can not become wholly effective at once. Not everyone will come up and list his moneys and credits frankly and fully the first time. Some will list only those that they think their neigh- bors or taxing officials are most fami- liar with, and many tax dodgers will try to find ways of evasion. But as ways of evasion are invented by tax dodgers, ways to circumvent them will be invented by a tax commission that has the hearty good will of the admin- istration. Under the old moneys and credits tax law it has become easier and easier for those who wished to evade paying; and harder and harder for tax officers: to ‘find the escaped wealth, TUnder the new law it will grow harder to evade detection, and easier to round up the dodgers. - PROSPERITY WON IN N. D. TO HELP PAY TAXES : Another law that will contribute to the big total just mentioned is the one commonly referred- to as the ‘situs law.” The situs law is another product of the farmer legislature of last winter. It is a statute enacted for the purpose of making the tax commission’s long list of duties really mean something, taxes from those who use North Da- kota as- a place in which to acquire their. wealth, but stay outside the state for the purpose of avoiding helping to support the state government. The law will tax such persons, firms or corporations at the place where they maintain state headquarters, and if they try to avoid paying taxes by not maintaining headquarters, then it will tax then® in the county where they make their money. The tax commis- sion is now preparing instructions and methods for finding out just who and where these firms are. It was noticed in the partial list.of the tax commission’s duties above, that one of them is to study the tax systems of other states and countries, with a view to making recommendations for improving the North Dakota tax sys- tem. That is just what the commis- sion has been doing. It was not idle, even while handicapped by an ad- ministration and a board of equaliza- tion: that would not help it make the tax laws more effective. It was study- ing all -the- time.. - Fai gt Now as a result of that study the commission has launched into a plan, big with prospects of future efficiency and prosperity for the whole state, of revising the North Dakota tax laws from cellar to garret, This will not be an overturning of everything as it . now is, but will be such a remodeling of the system as to bring the state's s FAGELAERIYE. comprehensive scheme and the tax commission will offer bills covering its various details at the next session of the legislature. That too, is one of the tax commission’s duties, which it has had little opportunity to exercise with legislatures that had no desire to in- crease the efficiency of the tax system. COMMISSIGN MAKES SURVEY OF PUBLIC UTILITIES Here are some of the big things . planned and accomplished by the state tax commission, since it has had the guarantee of sympathetic co-operation through the people’s administration. There are a few other important things that should be mentioned. The commission had noticed for sev- eral years that the wealthy counties were getting off with a much smaller tax in proportion to their ‘wealth than the pioneer, poorer counties, and its careful work in pointing out these in- equalities, was acted upon by the last board of equalization. Tax abatements are no longer being allowed by the board of equalization on the mere rep- resentation of interested parties or their attorneys, but the tax commis- sion’s advice is asked. A new set of instructions and rules for assessors and auditors has been prepared and will gb into effect at the next round of the assessors. i ‘The commission is also making a