Tax Delinquency in the United States

October 21, 1935

Report Outline
Growth of Problem of Tax Delinquency
Extent and Character of Tax Delinquency
Causes of Non-Payment of Property Taxes
Methods of Eliminating Tax Delinquency
Special Focus

Growth of Problem of Tax Delinquency

Effects of Delinquency on Revenues and Expenditures

Since 1928 nearly every state in the Union has enacted legislation dealing with the problem of delinquent taxes and a number of states have completely remodeled their systems of tax delinquency laws. This legislative activity has been called forth by the unprecedented increase just before and during the depression in the amount of unpaid property taxes and by the consequent threat both to the financial stability of state and local governments and to the security of private property.

Tax delinquency is believed to have been the chief cause of the reduction of governmental revenues during the depression and thus, indirectly, the cause also of the manifold concomitants of reduced revenues—curtailment of services, salary reductions, payment in scrip or warrants, defaults on bonded debt, and in some instances dependence on federal subsidies for the maintenance of essential services. Lent D. Upson, director of the Detroit Bureau of Municipal Research, points out that “the amount of taxes levied has held fairly steady throughout the depression.” The slight increase in the general level of property tax rates since 1929 has been “more than offset by lower assessments, leading to the conclusion that reduced local expenditures have been due largely to tax delinquency.”

Although some degree of tax delinquency had been a chronic condition in almost all parts of the country, and in certain regions had presented a serious problem long before the crisis of 1929, the play of economic forces during the depression enormously aggravated the problem, and delinquency increased rapidly up to 1934. Of a total of about $4,414,000,000 in general property taxes levied by the states and localities during the year 1932–1933, about $909,000,000, or more than 20 per cent became delinquent, according to a study made by the Division of Real Estate Taxation of the Census Bureau. Property tax delinquency on December 31, 1933, is shown by geographical divisions in the table below.

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Nov. 27, 1934  Elimination of Conflicts in Taxation
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Jan. 25, 1933  Tax Burdens and Tax-Free Securities
Nov. 23, 1932  The Beer Tax and the Sales Tax
Dec. 19, 1931  Sales Taxes: Federal, State, and Foreign
Sep. 18, 1931  Death Taxes and the Concentration of Wealth
Mar. 18, 1931  Federal Taxation of Large Incomes
Jan. 10, 1931  Taxation of Capital Gains
Nov. 09, 1929  Federal Tax Reduction-1930
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Jan. 16, 1926  Taxation of Estates and Inheritances
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Dec. 12, 1923  Tax Exempt Securities
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Commercial Law
State and Local Taxes