The Problem of Farm Taxation

Report Outline
Proposals for Readjustment of Farm Taxation
Extent of the Agricultural Tax Burden
Methods of Reallocating Costs of Government
Special Focus

Proposals for Readjustment of Farm Taxation

Tax Problems Before 1931 State Legislatures

Constitutional amendments affecting state systems of taxation were voted upon in seventeen states in connection with the elections of November 4, 1930. Results of the tax referenda were slow in being tabulated, but early returns indicated approval by the Utah voters of amendments permitting the legislature to adopt a state income tax, and rejection of similar amendments by the voters in Kansas. In Illinois, amendments proposing to abandon the present requirement of a uniform basis of taxation, thereby permitting the enactment of an income tax, were defeated. The amendments had the support of Governor Louis L. Emmerson, who stated in the campaign that there could be “no other attempt at revenue reform for four years,” and pointed out that 85 per cent of the yield from the proposed income tax would be returned to the local governments, only 15 per cent being reserved for the uses of the state. In Iowa, a campaign in which the adoption of state income tax was a leading issue resulted in the election as governor of Dan W. Turner, Republican, an advocate of the tax.

The measures submitted to the voters were in some states concerned only with the problem of obtaining sufficient additional revenues to meet the rising cost of state government. A substantial proportion of the tax referenda, however—particularly in predominantly agricultural states—reflected a campaign on the part of agricultural leaders to shift a part of the present tax burden on farm lands to some other basis.

Tax Revision in 1931 Legislatures

The growing prominence of the drive for lower farm taxes indicates that this problem will occupy much of the attention of the forty-four states legislatures scheduled to meet in regular session in 1931. In thirty-one states, tax investigations by official commissions or other state agencies have recently been completed or are now under way. The agricultural phase of the tax problem is receiving official attention not only in agricultural areas but also in New York and other industrial states. The New Jersey State Department of Agriculture said in its annual report, submitted November 3, 1930, that “the taxation problem continues to press heavily upon agriculture” and that the department had accordingly appointed a committee “with the idea of formulating a policy that will bring about some relief for agricultural interests and that may fit into a general state program looking toward tax revision.”