HARVARD COLLEGE LIBRARY RECEIVED THROUGH THE BUREAU FOR RESEARCH IN MUNICIPAL GOVERNMENT 1928 Complete Set Deposited in Littauer Center APR 26 1941 ANNUAL REPORT OF THE STATE TAX COMMISSION ALBANY, N. Y., April 7, 1921 TO HON. JEREMIAH WOOD, President of the Senate: Sir. We have the honor herewith to transmit our annual report for the year 1920. M. J. WALSH President JOHN J. MERRILL JAMES D. SMITH State Tax Commission ANNUAL REPORT ALBANY, N. Y., April 7, 1921 To the Legislature of the State of New York: The report of the State Tax Commission for the year 1920 is herewith respectfully submitted for your consideration. Taxation at its best can have but two reasonable functions, namely, (1) the support of government, and (2) the limitation of expenditure. The necessity for the application of the second function must be apparent to all who have watched the growth of governmental activity and cost. Incessant and urgent demands upon the state and local governments will never be stayed nor even alleviated until some measure of cost is arbitrarily fixed beyond which appropriations cannot be extended, and it is evident to this Commission that one of the greatest factors in the accomplishment of this great desideratum will be an extension of the tax base and the inclusion of all people beyond the age of twenty-one in the roll of contributors. The ease with which the appropriation of vast sums of money is approved by popular vote evidences the fact that in the minds of those who vote for them there is a settled conclusion that appropriations or bond issues are not effective in reducing the purchasing power of their own incomes; in other words the exactions to be paid are to be satisfied by others. Nothing could be wider of the mark than this conclusion, because the cost of the state and local governments during 1920 was at least two hundred dollars for the average family, and the aggregate of such taxes exceeded a half billion dollars. The cost of government has advanced far faster than the increase in either population or material wealth. A careful study of the existing situation has convinced us that real estate, represented by about 25 per cent of earning capacity, is paying nearly 70 per cent of the cost of state and local government. The reasons |