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The article examines the impact of states' sales taxes in the U.S. The author reviews economic literature on expenditure taxation by economists such as Nicholas Kaldor, John Kenneth Galbraith, and Irving Fisher. He explores the meaning and purpose of the terms "regression" and "progression" as they refer to an analysis of expenditure taxes. The policy of excluding food from taxes is explored. The author also discusses liberal government policies, the redistribution of wealth in an affluent society, the Fisher concept of income, and consumption expenditures.

The article presents a response of the author on comments made by scholar Harry I. Wolk on the paper "Accounting for Leases" that was published in Spring 1968 issue of the periodical "Journal of Accounting Research." The author states that the focus of Wolk's concern is on the author's use of an account, "Obligation to Permit Use of Leased Property" to offset the present worth of future depreciation charges, discounted at the cost of capital rate. The author explains that the difference between the initial amount in this account and the cost of the asset leased is carried into deferred net income to be taken up over the lease term.

The article presents information on various studies related to income smoothing attributes. The author states that income smoothing involves the repetitive selection of accounting measurements or reporting rules in a particular pattern and the effect of which is to report a stream of income with a smaller variation from trend than would otherwise have appeared. He explains that an accounting practice or measurement rule must possess certain properties before it may be used as a manipulative smoothing device. The article reports that of all available accounting alternatives, some will always have smoothing potential while others will only smooth under special circumstances or never at all.

The article evaluates the connection between taxes and trade barriers and outlines the ways taxes can be counterproductive or well implemented. The author does not oppose taxes which lead to equal competitive opportunities. However, when taxes are levied upon interstate commerce, they can easily work to dissuade merchants and buyers from doing business. Fair taxes clearly state their objectives, while poorly implemented taxes typically come from special interest groups. Trucking and transportation laws which unevenly tax out of state persons are noted. Additionally, the article addresses the balance between federal government and states' rights in legislating taxes.

The author reports on changes which have been made to the California state tax code and the impact which these changes have had on state tax payers. Various aspects of the California tax code are discussed, including the burden which state and federal taxes have on California residents and potential changes which may be made to the California tax system. Changes which have been made to state income taxes in order to cope with public expenditures are discussed. The way in which changes to the California tax system will impact tax payers is mentioned.

This article examines the impact on interstate net migration of differential state and local property tax and transfer policies in the United States by race, age and sex for 1965-70. The results offer considerable support to the Tiebout hypothesis that the consumer-voter moves to that area which best satisfies his preferences for public goods. [ABSTRACT FROM AUTHOR]

This article discusses tax reforms in the state of Wisconsin. The changes in federal tax laws may benefit or penalize particular classes of Americans, but they do not place those classes in direct competition with each other for new factories and jobs. Places where the state and local tax rates is the only factor involved in corporate decisions to locate in a particular place, one could expect a murderous competition among states to establish tax structures that are more pro-business than those of other states. The administration of the property tax at present is very costly. The second important area for state reform efforts is the distribution of the property tax base relatively. Many of the most severe social and environmental problems exists communities where the tax base is either inadequate or growing at a very slow rate. Property tax is regressive in its impact on homeowners is also regressive in its impact on business. The most important area for property tax reform concerns the incidence of the tax and the progressivity of its impact.

This article focuses on principles of tax reform. principles of tax reform. It is important not to confuse tax reform, which is concerned with how taxes are raised, with tax relief, which is concerned with the amount of taxes raised. It will be helpful if one assumes that one is given a fixed dollar amount of taxes that the government must raise and that one's task is to decide how it is to be raised. The first step is deciding what to tax-choosing the tax base. The tax to be raised might be spread evenly among all blue-eyed males or among all people with black hair, or "reasonably" black hair, etc. Whenever the government collects taxes someone's income is reduced regardless of the intended sources of the tax. This is as true of corporate taxes, tariffs, sales taxes, etc., as it is of the personal income tax. This suggests the individual, or the household, as the reference point in refining our concepts of tax fairness. There are two major camps on this issue which have provided economic literature with a long, flowery and often heated debate. The newer of the two positions asserts that taxes should be levied against individuals in proportion to the benefits they derive from government.

The movement toward increased use of land as a tax base is often cited as desirable because of efficiency aspects. Unfortunately, the idea is all too often dismissed for alleged inadequacy. Previous research into the revenue adequacy of site-value taxation has been concentrated on determining the tax rate necessary for a site levy to generate the yield obtained from present property taxes. The algebraic approach to the problem offers little to explain the dynamic properties of the tax. If present expenditures equals or exceeds present revenue from a site levy then future adequacy depends on the relative rates of growth of revenues and expenditures.

This article examines the arguments which have been used both for and against past annuity premium tax reform legislation. A chart is provided which shows that 26 states does not impose a premium tax on any considerations received by domestic or foreign life insurance companies from the sale of annuity contracts. The author analyzes the findings of a survey of states whose legislature have had to consider the merits of annuity tax reform legislation in order to determine what arguments have been presented for and against the elimination of the annuity premium tax. A summary is provided of the arguments which have been presented in opposition to legislation to eliminate or reduce annuity premium taxes. In conclusion, the author offers a word of caution with respect to the applicability of the individual arguments in any given jurisdiction.

The article presents information on progressively and horizontal equity in personal income taxation. Three waves can be distinguished in the history of Federal income taxation. The first began in 1913. Prior to World War I, when the income tax provided only a small portion of Federal revenues, progression was more modest than in any subsequent era. But the war greatly expanded Federal needs, and the progressive element of the income tax visibly swelled: in the year 1919 the spread exceeded 33%. The 1920's and early 1930's witnessed a long sliding-off from this crest. The Great Depression inspired a second wave of progressive taxation. High marginal rates were inflicted in 1932, and by 1937 the spread had risen from 10% to 32%. International conflict brought a third, and even higher, wave of progression. In 1942 the spread reached an all-time peak of 54%. The years since 1942, like the post World War I years, have seen a gradual diminution of progression. In 1962, the spread amounted to only 23%.

Comments on U.S. Supreme Court cases addressing the state taxation of imports. Number of votes in favor of permitting Ohio to apply its annual property tax to imported bales of hemp in the case Hooven & Allison Co. versus Evatt; Extension on the retention of immunity for use as it does to retention for sale; Declaration of goods as imports upon arrival at their destination in the case Brown versus Maryland.

Discusses various court cases in the U.S. Determination of bargaining unit in the case of "Marshall Field & Co. v. NLRB"; Issue of state taxation of federal property in the case of "Alabama v. King & Boozer"; Award of damages under the Emergency Price Control Act in the case of "Hall v. Chaltis."

Reports several cases presented for review by Harvard Law students in Cambridge, Massachusetts. Negotiability of bonds of a Massachusetts business trust; Validity of State Tax discriminating against Federal securities; Validity of mortgage not complying with statutory requirements of shareholders' consent; Right to recover damages for shortening of life under survival statute.

The article reports that in many of the significant cases in which the constitutionality of a federal taxing measure has been questioned counsel have relied to some extent upon the concept of "arbitrary retroactivity ". Particularly has this been true during recent years when the manifold cases arising from the modern estate tax, gift tax, and the increasingly complex income tax, have reached the courts. The doctrine has been thus persistently invoked in spite of the fact that in but three cases has it ever furnished the principal ground for an invalidation.

The article focuses on a court case and tries to answer the question of whether income from royalties from licenses of films protected by copyrights granted by the United States may be included in the measure of a state tax denominated a franchise tax on corporations based on net income. Appellant relies on a previous decision, which was decided by a bare majority of the court. Clearly this case can be decided without inquiring whether these royalties are to be regarded as instrumentalities of the federal government. The canons of the judicial tradition constrain to leave the ultimate effect of present decision to the successors.

Surveys federal law governing the state's power to tax and calls attention to related problems that have remained unresolved. Principles of constitutional limitation on state taxation; Nonjudicial approaches to problems of state taxation; Property taxes; Sales and compensating use taxes; Net income taxes; Gross receipts and added-value taxes; Fixed-fee and franchise taxes.

Offers political-related news briefs in Texas as of September 1921. Highlights of two special sessions of the 37th Legislature held during the summer; Constitutional amendments submitted to the voters of Texas at a special election held in July 1921; Move made by the State Board to Calculate the Tax Rate to fix the rate of state taxation for the fiscal year beginning September 1921 and ending August 1922; Decision of the governor to sign the bill repealing the existing minimum wage law and to veto the bill providing a new law.

The article describes the model system of state and local taxation as applicable to the states of the Southwest U.S. In November 1916, a special committee was appointed by the executive committee of the National Tax Association to prepare a model plan for state and local taxation. The most difficult task encountered in devising a logical plan of taxation in a country having a federal form of government is, the committee found, the adjustment of the conflicting claims of independent tax authorities. The following are the outstanding and distinguishing features of the proposed threefold tax. The forerunner of the personal income tax is well known as the poll tax, already in force in nearly every commonwealth in the union. The second feature of the model system is a tax upon property levied exclusively where the property is located. The business tax, possessing general uniformity in principle, could be employed in the several states with results approximating those now obtained by the so-called privilege or license taxes, and upon principles in harmony with the judicial structure of every commonwealth. A permanent State Tax Commission is an essential in any efficient system. The members of the commission should be appointed in classes for terms of at least six years, with their terms expiring in alternate periods of two years.

During the 1960's, there have been a total of 157 gubernatorial elections in the states. Every two or four years state government goes through a period which is potentially, if not actually, one of change in leadership and direction. The transition period can bring a redefinition of the whole structure of governmental and political rewards and punishments. While uncertainty may be a fact of political life, the transition expands the boundaries of uncertainty to include once-established policies, programs, positions, and roles. Everyone concerned with government waits expectantly for clues as to the depth and direction of change. Despite pre-election emphasis on programmatic change, the new administration tended to move from crisis to crisis, problem to problem, developing ad hoc solutions. This was due, in part, to the newness of some of the participants to the government process, as opposed to the campaign trail. While such newcomers were most likely to be innovative their lack of experience necessitated a trial and error approach. Moreover, those who were veterans of previous administrations had to adjust to changes in the nature of problems and governmental tools for dealing with them.

The article presents summary of articles present at a round table conference on the incidence of taxation. In his paper, Henry C. Simons, stated that the accessible literature of incidence, at all events, is largely the product, first, of writers not well-qualified for economic analysis and, second, of pure theorists who, with no sense of significant practical issues, have constructed analytical curiosa in the form of incidence problems. The discussions of incidence problems should be focused upon the significant relative effects of different revenue devices for obtaining the same revenues. So the proper procedure in studying the effects of a particular tax is that of assuming its imposition to be accompanied by a total-revenue-balancing reduction in some other specified levy. The most useful analyses are probably those, which indicate how various taxes would work out relative to a fiat proportional income tax as the common norm. Tipton R. Snavely, in his paper, was of the view that incidence is properly defined as the direct money burden of a tax, not its in direct economic effects. Hence, such factors as the psychological burden, the inability of the testator to make payment in person, moral and legal aspects, and the action of the predecessor in anticipation of the tax have no significance. Incidence, then, becomes a purely mechanistic process.

The abandonment of the California plan of separation of state and local sources of tax revenue under an amendment adopted in 1933, after a generation of trial, naturally evokes an interesting query as to the results achieved under separation in this state. The present article attempts to summarize the effects of separation of sources in California and to compare them with those observed in other states. In general, marked similarity is observable to the experience of other states with separation. Full-value assessment of property failed of realization; a new equalization problem appeared in place of the former difficulty of equalization among counties; the anticipation of substantial benefits from a greater measure of home rule has not materialized, while at the same time this feature of the plan imparted a measure of inflexibility to the state tax system; a new problem was presented by the unequal losses to county tax rolls by the exemption of utility "operative" property from local taxes; local tax burdens were somewhat reduced under separation; finally, no marked tendency to extravagance is found in state or local expenditures as a result of the plan. [ABSTRACT FROM AUTHOR]

The article presents information about some books on public finance, taxation and tariff. "State and Local Tax Revision," informs that it appears that many high schools will debate on the question, resolved: that at least one-half of all revenue for state and local purposes should be derived from sources other than tangible property. "Wisconsin Industry and the Wisconsin Tax System," is a little study that represents the second exploration of its author into that fascinating but uncharted field of the relations of a state tax system to its industrial development. "Taxation of Income in India," is an analysis both of the historical income taxes of India and the present tax in the light of the theory of "ability to pay." The author deals briefly with the development of Indian income taxes levied to produce revenues regardless of equality of taxation and shows the changing attitude of the people towards these taxes from their inception in 1860 through the license taxes and then back to the formal income taxes.

In 1920 there appeared in the American Economic Review two articles which reviewed the progress made in state income taxation during the period 1911-1918. Since that year no studies have been published specifically treating of developments in this field throughout the last ten years. In view of the widespread interest in state tax reform, in which the state income tax plays an important part, these two studies should be brought down to date. The purpose of the following discussion is primarily to evaluate results from a fiscal viewpoint. In 1918 there were income tax laws, either individual, corporation, or both, in force in nine states; today such laws are effective in sixteen: Arkansas, California, Connecticut, Delaware, Massachusetts, Mississippi, Missouri, Montana, New Hampshire, New York, North Carolina, North Dakota, Oklahoma, South Carolina, Virginia, and Wisconsin. Of these sixteen states, Arkansas, California, New Hampshire, North Dakota, and South Carolina have adopted the income tax since 1918.

The type of tax with which this article deals is confined almost wholly to New England. It may almost be called a New England device. The New England plan of taxing savings, on the whole, takes the form of low-rate, state-collected, percentage franchise taxes on the deposits, collected through the institutions themselves, with exemption of such sums from additional state or local charges. This generalization does not hold throughout. Some of the states impose taxes also upon accumulations and reserves. All institutions which receive savings in every state are not taxed, either by state or local charges. Savings not taxed at all in some states are those in building and loan associations and credit unions. Of course, postal savings are exempt in all states. However, with the exception of building and loan associations in Maine and national banks in Massachusetts, all deposits which are state-taxed are subject to the savings bank rate. A feature common to almost all these taxes is the permitting of deductions. More are allowed in some states than in others.

The results of the operation of the various state income taxes, judged in the light of the relative tax-paying capacity of the incomes of residents, indicate financial success on the one hand and financial inadequacy and failure on the other. Allowing for the fact that in certain states the income tax rate applies to individual incomes only, while in others it applies to corporate in- comes, that in a few states only income from specified sources has been taxed, that certain states tax residents only while others tax in addition the income derived within the state by non-residents, it is nevertheless clear that such a tax as that of Massachusetts, which yields, from specified incomes only, an amount approximately equal to one third of that collected by the federal government, is a satisfactory fiscal measure; while such a state as Mississippi, which, from a tax upon all individual incomes, gains only about 1½ per cent of the amount collected through the federal channels, is justified in regarding the measure as one which on financial grounds is not worth keeping on the statute books. An estimate of the success of the taxes on the basis of their relation to the tax system of the respective states, and as gauged by the cost of collection, is not so readily made. No one of these states exactly resembles another with respect to the classes of receipts included in the state fund. Moreover, the intentions of the legislators obviously differ. In Massachusetts, for example, the tax is a substitute for that on intangible personal property; in Delaware, on the other hand, the tax is apparently intended only as a superstructure. Few states emphasize the cost of collection, or have the necessary figures in such form that it can be computed on a basis comparable with that of Wisconsin, for example. In so far as the cost is known, it presents the amount of variation which is to be expected under the diverse systems-from almost 4 per cent in Virginia to slightly more than 1 per cent (on assessments) in Wisconsin. State income taxes are still so limited in application that the fiscal results cannot yet be used in proof positive of success or failure. The analysis indicates, however, that success, measured in terms of relatively large amounts of state receipts from this source, is possible, but is largely conditioned by an accurate adaptation of the rates to the types of incomes represented in the state in question, and by the use of specialized and centralized administrative mechanism. [ABSTRACT FROM AUTHOR]

Reports on the progress of state income taxation in the U.S. from 1911 to 1920. Uniform rule of property taxation; Personal exemptions; Loss of revenue from intangibles returned for taxation; Apportionment of corporate income to the state.

The article presents information on several books on transportation and communication. The book "The Validity of Rate Regulations, State and Federal," by Robert P. Reeder, deals with the important subject of state control over interstate rates. The power of the U.S. Congress over interstate commerce is full and complete and if in its judgment any act of the state interferes with the free flow of commerce between the states, such act is unconstitutional. The state may enter into a contract with a railroad whereby, in consideration of franchises granted, the railroad surrenders to the state control over interstate rates. According to the author, the power to fix rates, even under the restraining influences of the fifth amendment of the U.S. constitution, is an tremendous power not only over railroad property but also over commerce and industry. A decision on fixing rates might deprive the owners of the railroads of a billion dollars of value without confiscating property within the prohibition of the constitution. It might determine the location of industry and build one city at the expense of the other.

This article presents information on reports of special state local commissions on taxation over a period of four years. The commission find that the general property tax grossly violates the constitutional injunction that taxation should be proportional and reasonable. Concluding that the existing distribution of the corporate franchise tax is both illogical and unfair, they recommend that the railroad, telephone and telegraph companies tax be retained entirely by the commonwealth, and that the street railway commutation tax of 1906 go entirely to the localities. The chief concern of the commission, however, was with the personal property tax. Statistics are presented to show the break-down of this system in Massachusetts and elsewhere and to it is ascribed the concentration of personal property in a very small number of towns. The chief recommendations are: a constitutional amendment to permit classification; the establishment of a state tax board with considerable powers; a more frequent appraisement of real estate; the separation of state and local revenues and authority to the local communities to secure publicity in taxation.

The purpose of the research was to determine the economic advantage of the accelerated depreciation procedures allowed by Revenue Procedure 67-40. This income tax procedure allows relatively free choice of depreciation method at any point in the asset's life. This choice affects two decisions. First, the decision to acquire a particular asset and second, if acquired, the depreciation method to be used for income tax purposes. A deterministic computer simulation was used to calculate the economic advantage of the new optimum procedure compared to the sumof-the-years-digits method. The economic advantage is measured by the present worth of the depreciation tax shield. The independent variables are cost of capital, economic life, estimated salvage value, and income tax rate. The results of the simulation show that the added economic advantage of the new optimum depreciation procedure is small and is unlikely, in practical situations, to change the acquisition decision. The desirability of the new procedure for income tax purposes if the asset is acquired is less clear because the costs of using the new procedure are difficult to measure. [ABSTRACT FROM AUTHOR]

The U.S. Supreme Court early in 1959 ruled explicitly on the scope of state jurisdiction under the Constitution to tax income from purely interstate business activity. The Court decided that states have significantly broader power than they have been exercising. A nondiscriminatory, properly apportioned state tax on net income can now be imposed on a foreign business when the activities in the state constitute a sufficient "netus." The contact necessary to sustain tax is decidedly less than formerly assumed. There is no doubt about the emergence-more accurately the accentuation--of a problem with economic, as well as legal and accounting, aspects. In principle the extension of state taxes as now permitted would not be cause for concern if compliance costs could be kept modest and if a proper basis for apportionment were utilized. Yet it seems inevitable that compliance costs will often be high in relation to tax, not infrequently more than the tax itself. For many decades states have sought to allocate, i.e., to divide up for tax purposes, the income of a corporation or unincorporated business among the states in which the firm carries on its activities.

The effects of the individual income tax upon income distribution have been made the subject of increasing attention in recent years. The individual income tax has been long considered one of the most effective instruments of taxation because, in addition to its use as a means of equalizing incomes, it has the advantages of counter cyclical flexibility, relatively certain incidence and the ease with which it can be adjusted to take account of family size, and other considerations which seem to bear upon taxable capacity. As a result, the increased use of this source of federal revenue has been generally favored. A superficial review of the change in the relative role of the individual income tax suggests to many that substantial progress has been made in achieving justice in the distribution of the tax burden as among equals. Although there is a very vocal group, which insists that the equalization aspects of the income tax have been carried too far and have led to the destruction of work incentives and investment incentives, no objective analysis of this question can produce evidence to support their contentions. Some qualifications about the adverse long-run implications of continued high rates upon incentives have been made but the extraordinary prosperity and investment boom which has characterized the period since the income tax schedules have reached record levels is evidence that the fears of the opponents of the tax are exaggerated to say the least.