town-meeting.] When this meeting is to be called the selectmen issue a warrant for the purpose, specifying the time and place of meeting and the nature of the business to be transacted. The constable posts copies of the warrant in divers conspicuous places not less than a week before the time appointed. Then, after making a note upon the warrant that he has duly served it, he hands it over to the town-clerk. On the appointed day, when the people have assembled, the town-clerk calls the meeting to order and reads the warrant. The meeting then proceeds to choose by ballot its presiding officer, or "moderator," and business goes on in accordance with parliamentary customs pretty generally recognized among all people who speak English.
[Sidenote: Town, country, and state taxes.] At this meeting the amount of money to be raised by taxation for town purposes is determined. But, as we shall see, every inhabitant of a town lives not only under a town government, but also under a county government and a state government, and all these governments have to be supported by taxation. In Massachusetts the state and the county make use of the machinery of the town government in order to assess and collect their taxes. The total amounts to be raised are equitably divided among the several towns and cities, so that each town pays its proportionate share. Each year, therefore, the town assessors know that a certain amount of money must be raised from the taxpayers of their town—partly for the town, partly for the county, partly for the state—and for the general convenience they usually assess it upon the taxpayers all at once. The amounts raised for the state and county are usually very much smaller than the amount raised for the town. As these amounts are all raised in the town and by town officers, we shall find it convenient to sum up in this place what we have to say about the way in which taxes are raised. Bear in mind that we are still considering the New England system, and our illustration is taken from the practice in Massachusetts. But the general principles of taxation are so similar in the different states that, although we may now and then have to point to differences of detail, we shall not need to go over the whole subject again. We have now to observe how and upon whom the taxes are assessed.
[Sidenote: Poll-tax.] They are assessed partly upon persons, but chiefly upon property, and property is divisible into real estate and personal estate. The tax assessed upon persons is called the poll-tax, and cannot exceed the sum of two dollars upon every male citizen over twenty years old. In cases of extreme poverty the assessors may remit the poll-tax.
[Sidenote: Real-estate taxes.] As to real estate, there are in every town some lands and buildings which, for reasons of public policy, are exempted from paying taxes; as, for example, churches, graveyards, and tombs; many charitable institutions, including universities and colleges; and public buildings which belong to the state or to the United States. All lands and buildings, except such as are exempt by law, must pay taxes.
[Sidenote: Taxes on personal property.] Personal property includes pretty much everything that one can own except lands and buildings—pretty much everything that can be moved or carried about from one place to another. It thus includes ready money, stocks and bonds, ships and wagons, furniture, pictures, and books. It also includes the amount of debts due to a person in excess of the amount that he owes; also the income from his employment, whether in the shape of profits from business or a fixed salary.
Some personal property is exempted from taxation; as, for example, household furniture to the amount of $1,000 in value, and income from employment to the extent of $2,000. The obvious intent of this exemption is to prevent taxation from bearing too hard upon persons of small means; and for a similar reason the tools of farmers and mechanics are exempted.[2]
[Footnote 2: United States bonds are also especially exempted from taxation.]
[Sidenote: When and where taxes are assessed.] The date at which property is annually reckoned for assessment is in Massachusetts the first day of May. The poll-tax is assessed upon each person in the town or city where he has his legal habitation on that day; and as a general rule the taxes upon his personal property are assessed to him in the same place. But taxes upon lands or buildings are assessed in the city or town where they are situated, and to the person, wherever he lives, who is the owner of them on the first day of May. Thus a man who lives in the Berkshire mountains, say for example in the town of Lanesborough, will pay his poll-tax to that town. For his personal property, whether it he bonds of a railroad in Colorado, or shares in a bank in New York, or costly pictures in his house at Lanesborough, he will likewise pay taxes to Lanesborough. So for the house in which he lives, and the land upon which it stands, he pays taxes to that same town. But if he owns at the same time a house in Boston, he pays taxes for it to Boston, and if he owns a block of shops in Chicago he pays taxes for the same to Chicago. It is very apt to be the case that the rate of taxation is higher in large cities than in villages; and accordingly it often happens that wealthy inhabitants of cities, who own houses in some country town, move into them before the first of May, and otherwise comport themselves as legal residents of the country town, in order that their personal property may be assessed there rather than in the city.
[Sidenote: Tax lists.] About the first of May the assessors call upon the inhabitants of their town to render a true statement as to their property. The most approved form is for the assessors to send by mail to each taxable inhabitant a printed list of questions, with blank spaces which he is to fill with written answers. The questions relate to every kind of property, and when the person addressed returns the list to the assessors he must make oath that to the best of his knowledge and belief his answers are true. He thus becomes liable to the penalties for perjury if he can be proved to have sworn falsely. A reasonable time—usually six or eight weeks—is allowed for the list to be returned to the assessors. If any one fails to return his list by the specified time, the assessors must make their own estimate of the probable amount of his property. If their estimate is too high, he may petition the assessors to have the error corrected, but in many cases it may prove troublesome to effect this.
[Sidenote: Cheating the government.] Observe here an important difference between the imposition of taxes upon real estate and upon personal property. Houses and lands cannot run away or be tucked out of sight. Their value, too, is something of which the assessors can very likely judge as well as the owner. Deception is therefore extremely difficult, and taxation for real estate is pretty fairly distributed among the different owners. With regard to personal estate it is very different. It is comparatively easy to conceal one's ownership of some kinds of personal property, or to understate one's income. Hence the temptation to lessen the burden of the tax bill by making false statements is considerable, and doubtless a good deal of deception is practised. There are many people who are too honest to cheat individuals, but still consider it a venial sin to cheat the government.
[Sidenote: The rate of taxation.] After the assessors have obtained all their returns they can calculate the total value of the taxable property in the town; and knowing the amount of the tax to be raised, it is easy to calculate the rate at which the tax is to be assessed. In most parts of the United States a rate of one and a half per cent, or $15 tax on each $1,000 worth of property, would be regarded as moderate; three per cent would be regarded as excessively high. At the lower of these rates a man worth $50,000 would pay $750 for his yearly taxes. The annual income of $50,000, invested on good security, is hardly more than $2,500. Obviously $750 is a large sum to subtract from such an income.
[Sidenote: Undervaluation.] [Sidenote: The burden of taxation.] In point of fact, however, the tax is seldom quite as heavy as this. It is not easy to tell exactly how much a man is worth, and accordingly assessors, not wishing to be too disagreeable in the discharge of their duties, have naturally fallen into a way of giving the lower valuation the benefit of the doubt, until in many places a custom has grown up of regularly undervaluing property for purposes of taxation. Very much as liquid measures have gradually shrunk until it takes five quart bottles to hold a gallon, so there has been a shrinkage of valuations until it has become common to tax a man for only three fourths or perhaps two thirds of what his property is worth in the market. This makes the rate higher, to be sure, but the individual taxpayer nevertheless seems to feel relieved by it. Allowing for this undervaluation, we may say that a man worth $50,000 commonly pays not
