Thursday, January 13, 1927.
I
possible to secure the enactnn at
of such a law, or recommend
that a severance tax be imposed
From page 1
ful mountains of Oregon are de-' and the entire proceeds used for
We
nuded of their timber, us they reforestation by the state.
will be in another generation unless should r4’t allow our beautiful
some action is taken, the same forests to be cut, manufactured
disastrous consequence will follow into lumber, and sold in eastern
here that have resulted in other states and foreign countries, and
not realize enough revenue there
parts of the world.
Fully 80 per cent of the tim- from to start active reforestation
ber in this state belongs to non- program.
TAXATION
resident indiviouals and corpora
tions, and only a small part of the
In my first message I stated that
lumber manufactured in the slate the seduction and redistribution of
the tax burden was the paramount
is consumed at home.
The State Board of Forestry question. We have made progress
consists of the governor, the acting with the vexing problem, but it
head of the forestry school of the is still a paramount issue, The
Oregon Agricultural College, and enactment of the income tax law
five electors of the state of Oie- 1923 was a signal triumph for the
the
taxpayers of
gon, appointed by the governor overburdened
from and upon the authoritative state government, including the
recommendation of the Oregon millage taxes, should be collected
State Grange, the Oregon Forest from sources other than a tax
Fire Association, the West Coast on property. The income tax was
Lumbermen’s Association, the Ore- in effect only ten months, but
gon Wool Growers’ Association, under it operation the state collect
and the United States For. st Ser- ed $2,928,320.65, and the money
vice. The board therefore con.dstJ so collected has been largely re
of seven members, five of whom sponsible for the reduction made
are appointed by five different pri in the state tax levy, which for
vate organizations. I recommend which in 1922 was $9.376,289.11,
that the law creating this hoard and in 1926 was $7,200,830.79.
be so amended that the governor There has been a material reduc
may have the free and exclusive tion in the amount annually con-
right to appoint . the members there- tributed by each county in the
of, without the 1 necessity of a re- statu. I claim and have a right to
commendation from any organiz- claim full credit for this reduc-
tion, by reason of my championing
ation.
The two forestry bills that will the income tax, vetoeing bills anu
be presented at this session prac curtailing the expenditure of state
I have never faltered in
tically vest in the state board funds.
of forestry and power of taxation, my demand upon the legislature
a greater power than should be to enact laws for collecting money
exercised by any commission not lor state governmental functions
directly responsible to the goxcr- without resort.’ng to a property tax.
Ten years ago, for the second time
nor or to the people.
Assessing property for the pur I returned to the state senate, ad
pose of taxation is one of the vocating the principle that visible
most important function of govern property should not bear the bur
ment. It is intolerable that such den of maintaining state govern
powers should be exercised by a ment. Three tax investigating com
board, the majority of the mem- mittees have reached the decision
bers of which are appointed neith- *h:.t visible property must be re-
er by the electorate nor by any iieved of part of the burden, The
governmental agency whatsoever, special tax investigating committee,
but soleiy by private organizations appointed by the last legislature,
standing in no responsible relat'on went on record unanimously last
to the state, and controlled, it may month as being in favor of this
be, by persons who are not even principle. I consider the action of
citizens of the state. Tlis manner this committee a complete vindic
of appoint.r,g the members of this ation of what I have advocated so
board is repugnant to the whole faithfully.
spirit of representative government.
There are several states in the
The constitutionality of this law Union,
California,
Pennsylvania,
should be tested at an early date. North Carolina and Virginia, that
I recommend that reforestation levy no tax on visible property
be done by the state for future for the maintenance of state gov
generations. Nature has given us ernment. North Carolina collects al
the soil, the rain and the sun, the most all state revenue from a
necessary elements to grow the tobacco tax and an income tax.
tree. When the tree has reached Pennsylvania, with a budget of
maturity it is not right nor just -63,452,654.00, raises the money-
that it should be the property of from the following sources:
descendants of men who are for- Charter stock tax ...... $18,333,086
tunate enough to own the land Corporate loans tax
6,851,989
and are powerful enough in pol- Corporation bonus on charters......
itical circles to secure legislation
1,760,393
that will enable them to grow the Gross receipts tax ...... 4,104,414
tree to maturity practically free Insurance premiums tax 4,026,489
from taxes.
Bank stock tax ...........
1,455,701
I do not believe that standing Mercantile license tax
3,650,222
timber should be taxed, but I do Anthracite coal tax ...
6,741,761
believe in a severance tax. In for Emergency profits tax
2,125,000
mer messages I have recommended Inheritance tax ........... 11,561,367
such a tox on timber, to be divided License fees tax
2,444,274
into four parts, one-fourth to go Miscellaneous
397,955
to the state, one-fourth to the ir
reducible school fund, one fourth
$63,452,651
to the county in which the timber:
Ohio levies only $2,800,000 on
is cut, and one-fourth for reforc- visible property, while Oregon, in
station. Vested interests seem
1926, levied nearly three times as
be so strongly entrenched in this much. Yet Ohio has a ’ budget of
state that it appears utterly im more than $50,000,000
Ex-Governor’s Message
‘”1
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I
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«
VERNONIA EAGLE
fifteen times more wealth than kept my part of the agreement.
Oregon, The same situation pre- Because this bill was referred,
vails in most of the states of the there is today a deficit instead of
Union, Only three states exact a a surplus in the state treasury.
larger per capita contribution than
Much printer’s Unr lias been
Oregon from the owners of vis wasted on the so-called deficit^ in
ible property for the maintenance the state treasury, and how handi
of state government.
capped this legislature would be
Columns and pages of misinfor in providing for the proper func
mation have been published in the tioning of state institutions. Here
press of the state during the past are the facts from the books of
two years about the difficulties the state auditor: There has been
surrounding the functioning of a deficit at the close of nearly
state government, by reason of every year for ten years last past.
the fact that property taxes can On December 31, 1922, at the time
not be increased more than 6 per 1 was ma uguraled gu/e.aor, t..v*-
cent a year. I have been accused was a deficit in the state treasury
of being largely responsible for of $582,872.85. The same books
this condition. I am proud to ac now show a bookkeeping deficit of
knowledge the responsibility. I was $969,823.71, which will be reduced
president of the State Taxpayers’ by the return of the unused bal
League that was largely responsi ances from the various appropri
ble for enacting the 6 per cent ations. These unused balances will
constitutional
limitation
amend aggregate $300,000. In other words
ment. I alsb have been a member the total actual deficit now is not
for four years of the State Tax to exceed $100,000 greater t......
Commission when tax levies have when 1 was inaugurated governor
been made. I have made it im your years ago, and this amount
possible for the state levy to be was appropriated by the people in
increased materially on the 1 small November for the Eastern Oregon
homes and farms of this state, Tuberculosis Hospital, and is in
Most of the functions of state cluded in the estimates. What a
mess of falshoods have been spread
government are for the benefit
I
of the corporations and business circulated and hammered into the
interests of the state, and even people of this state as propaganda.
the most profligate of legislatures We heard nothing about the
would have more money than it ficit four years ago, six years
could spend if these same corpora- or eight years ago, but now
tions and business interests paid hear much about the present
taxes in proportion to the amount licit because powerful influences in
paid by the farmers and the small the state desire to put over this
misinformation.
property owners.
Many, many times the statement
The situation demands that you
has been made that all Pacific
enact legislation that will force
Coast states should have the same
an equalization of the burden. Re
kind of tax laws. Friends of triv
cords on file here in the state
income tax have been sever»-’
house show that in 1923 there
criticised for pioneering in
were 2,260 business concerns on
method of raising revenue,
our tax rolls that had a book value
critics can show their sincerity by
of $254,000,000; they were asses
assisting in the passage of a law
sed for $63,000,000, or 25 per
in Oregon similar to the California
cent of the book value. These same
law taxing corporate excess. Un-
2,260 business concerns had a net
uer tbat taw California is collect
income of $29,283,00 or 11 Vs per
ing over $6,000,060 annually. Such
cent of book value. Just think of
a law would yield over $1,000,000
it! These 2,260 business concerns
annually in this state. It would
made a net profit in one year of
hurt no one, reaching only those
47 per cent of their assessment.
enjoying excess profits. It would
I am not dreaming, guessing or
reach firms in Oregon that have
estimating.. These figures have been
a small amount of tangible pro-
taken from the sworn statements
perty and large net profits, often
of these business firms. It is also
exceeding the assessments.
worth noting that these figures
When I was inaugurated gover
are not from a few firms, but
nor the insurance department of
from many, scattered all over the
the state was collecting for the
state. In one county, not Multno
mah, nine manufacturing concerns state treasury $316,793 in revenue.
The amount collected in 1926 was
had a book value of over $10.000,-
$695,597. The fees collected from
000, a net income of $2,755,000.
insurance companies very justly
assessed for $2,246,690, or 81 per
can be increased. California col
cent of their net profits for one
lects a larger percentage than
year. In another county five cor
porations had a book value of do in i Oregon.
At least 1 per cent should
$17,560,000, a net profit of $2,-
629,000, and were assessed for levied on the premiums of all
mestic insurance compan.es in
$2,754,000.
The federal census for 1925 state. The law provides that they
must be examined at frequent in
3hows 700,000 acres less cultivated
tervals, and this entails consider
land in Oregon Muring that year
able expense. There is no reason
than for the year 1920. The num
why the domestic companies should
ber of abandoned acres will in
be entirely free from bearing their
crease with the years unless he
part of the burdens of govern
who cultivates the land is able to
ment, which have been increased
realize a larger portion of the
by reason of the operation of
real value of the products he raises,
these same domestic insurance com
and also be given relief from the
panies.
excessive amount of taxes he is
The life insurance companies
now obligated to pay. A short
time ago my attention was called have derived great benefit in
to a corner lot in one of the pros various states by reason of
perous cities of the state. Upon prolongation of life. It is my
this lot there had been recently lief that a special tax should
erected a beautiful building, cost levied on these companies sufficient
ing many thousands of dollars. The to pay the expense of maintaining
lot was appraised by three shrewd the state board of health.
Corporation fees can and should
business men. The highest appraisal
was $125,090; the lowest, $90,000. be increased. Especially should a
That lot is assessed for $16,000. much heavier tax be levied on non
This instance could be multiplied resident corporations.
thousands of times. I warn the
As a result of my vetoing
owners of great wealth, those who appropriation for the Public
control the business interests of vice Commission two years
this state, and also largely con the legislature provided for a
trol its politics, that the continu cial tax on public utilities, to raise
ation of this policy is exceedingly funds to maintain the Public Ser-
dangerous, for loyalty can not be vice Commission. The fund provid
expected among the citizens of this ed has not been found »ufficient.
Republic and of this state when The commission should not be a
a man is obliged to give up hi» burden on the general taxpayer,
farm for taxes and then behold The percentage collected ahould be
hundreds of instances just like the increased.
one I have cited. Such a condit-
Continued next week.
ion breeds not patriotism, but
shevism.
Notwithstanding the repeal
the income tax law in 1925,
the failure of the people to enact
the Grange Income Tax Bill in
1926 I still contend that it is the
fairest and most equitable method
of distributing part of the burdens
of state government. I believe it
is your duty, at an early hour in
this session, to enact into law the
principles embodied in the Grange
Graduated Income Tax Bill.
A tobacco tax is in force in
twenty-two states in the Union,
Many more states will enact such
a law this year. From this source
a million dollars could be raised
annually. Two years ago, in the
WORK IS A BY-WORD
office of the president of the sen
ate, an agreement was entered in
to between myself, as governor,
and representatives of the tobacco
interests, to the effect that if I
would sign the tobacco bill, which
omitted cigars, there would be no
referendum called on the bill. I
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VERNONIA. OREGON
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