earth and well within the bounds of possibility if the Christian church rises to its duty.

Another recent work in the same field appears in P. P. Womer's The Church and the Labor Conflict (New York, The Macmillan Company, 1913; x, 302 pp.). This is a scholarly discussion of the shortcomings of the present economic order and of the part the church ought to play in helping to overcome them. The central thesis is that Jesus preached an ideal human society as well as an ideal individual. The author believes that for centuries the organized church has been laying emphasis on the wrong things and that the immediate duty confronting it is to ally itself with the forces making for justice rather than for peace in the social order, until a regenerated society bespeaks a closer approximation of the Christian ideal of brotherhood and good will. That the church in almost every denomination is beginning to see this duty, Mr. Womer believes is being most hopefully disclosed throughout the Christian world.

Lastly reference must be made also to Spiritual Culture and Social Service (New York, F. H. Revell and Company, 1912; 222 pp.), by Rev. C. S. McFarland, secretary of the Federal Council of the Churches of Christ in America. This book comprises a series of sermons delivered by the author during his former pastorate. Underlying each of the sermons is the idea that broad human helpfulness is an indispensable condition of the highest individual spiritual development. While the style is suggestive of pulpit oratory this does not mar the deep significance of the viewpoint set forth. The book is readable and stimulating, and like the other volumes referred to constitutes a noteworthy contribution to the literature on the socialization of the Christian church.

POLITICAL SCIENCE

QUARTERLY

THE SIGNIFICANCE OF THE WISCONSIN
INCOME TAX

FOR

OR many years expert opinion in the United States has strongly condemned the state income tax. Despite the voice of authority, however, the legislature of Wisconsin passed an income-tax law in 1911, which has since stood the test of two assessments.

The Wisconsin income tax originated in an effort to find an equitable and efficient method of personal taxation. The operation of the general property tax has been steadily transforming it into a real tax-a tax on things rather than on persons. This tendency was believed in Wisconsin to be not altogether salutary. The property of many persons of wealth is situated in jurisdictions other than that in which they reside. These people, it was thought, owe some fiscal allegiance to the jurisdiction in which their persons are protected and their children are educated. The tax on property did not meet the requirements of the situation and, after the necessary constitutional amendment had been secured, a graduated income tax was adopted as the most available supplement to the system previously in force. The law was approved in July, 1911, and went into effect the following year. The first assessment, therefore, was made in 1912, based upon incomes of 1911.1

The Wisconsin law is applicable to persons living in Wis

For further details regarding the history and operation of the Wisconsin income tax see the Report of the Wisconsin Tax Commission, 1912, Chapters 3 and 4; K. K. Kennan, Wisconsin Income Tax Report, Journal of Economics, November, 1911; T. S. Adams, The Wisconsin Income Tax, American Economic Review, December,

1911.

consin, to business transacted there and to income derived from property within the state. Where the business is taxed in Wisconsin any partner or shareholder residing in Wisconsin is exempt in his personal return from income taxed directly to the partnership or corporation. The rates are progressive, rising in the case of individuals and partnerships from one per cent on the first $1000 of taxable income to six per cent on taxable income over $12,000. For corporations the rate rises from two per cent on the first $1000 of taxable income to six per cent on income over $6000. The incomes of wife, husband and children under eighteen years of age are grouped together and the following deductions are allowed: $800 for an individual, $1200 for man and wife and $200 additional for each child entirely dependent upon the taxpayer for support. No deductions are provided for partnerships and corporations. Educational and benevolent institutions not conducted for pecuniary profit are exempt from the tax, as are insurance companies and all those public utilities which pay taxes directly to the state government. The yield of the tax is, of course, greatly affected by this withdrawal of insurance companies, steam railways, street railways and all gas and power companies associated with street railways. Since the first assessment, banks and trust companies have likewise been exempted from the income tax. This exemption is due to the fact that the income of most of these corporations is given proper weight in fixing assessments under the ad valorem tax imposed by the state government. Moreover, in the case of practically all of these corporations, the personal property tax would be sufficient to cancel the income tax. For it is provided by the statute that any personal property tax may be used as an offset or credit against the income tax. Thus a man with an income tax of $100 and a personal property tax of $70, pays his personal property tax and only $30 as income tax. It was found impracticable to make the income tax a complete substitute for the tax on personal property. On the passage of the income-tax law, however, all moneys and credits, household goods and farm machinery were exempted from taxation, thus leaving subject to the property tax only a few kinds of

personal property, the most important of which are farm animals and the stock of merchants and manufacturers.

The administration of the tax is highly centralized, the assessment of corporations being made by the tax commission, and the assessment of partnerships and individuals by assessors of incomes appointed by the tax commission in accordance with civil service requirements. But the income tax is still predominantly a local tax. The administration only is centralized. The state government gets only ten per cent of the revenues collected and pays all expenses. Twenty per cent goes to the county government and seventy per cent to the town, city or village in which the tax is collected.

The first assessment was completed in the autumn of 1912. It naturally aroused no little irritation and the income-tax law was made the principal point of attack in the gubernatorial campaign which followed. But the attack failed. Governor McGovern, who made it his chief issue, was reëlected, and in the legislature of 1913, practically no effort was made to touch the income tax except to strengthen and improve it. The fiscal results of the first assessment may be briefly and rather baldly described as follows: (a) The total income assessed amounted in round figures to $100,000,000 and the income tax to $3.472,880, of which tax 68 per cent was assessed to corporations and 32 per cent to firms and individuals. The average tax rate upon corporations was 5.4 per cent and upon individuals 1.96 per cent. (b) The tax was much more productive in urban than in rural districts, 42 per cent of the entire tax being assigned to Milwaukee alone. Comparatively few farmers and laboring men were found to be subject to the tax, the exemption-which for man, wife and three children amounts to $1800-relieving these classes almost entirely of income taxation. The tax is borne for the most part by the more prosperous business and professional elements of the city communities. (c) Of the $3,472,880 assessed in 1912, $1,628,318 had been paid into the public treasury at the end of the collection season, $411.863 remained due and collectible on delinquent rolls, and $1,432,700 had been offset or canceled by payments of the personal property tax. The uncollected tax represents

for the most part amounts which have been deliberately withheld by responsible companies pending judicial decision of a number of disputed points. (d) The cost of administering the tax in the first and probably most expensive year of its operation was $94,832. From this, however, should be subtracted at least $54,000, representing the equivalent of salaries previously paid to certain officers whose work has been taken over and better performed by the assessors of incomes. The net or real cost of the income tax was, therefore, in round figures, $40,000, making the tax one of the least expensive direct taxes anywhere collected.

I

The greatest discovery of the Wisconsin income tax is the non-political assessor of incomes. The law requires assessors of income to be selected in accordance with civil-service requirements and without regard to political affiliation. Among the forty-one assessors of incomes there are republicans, democrats, socialists and single-taxers. The highest salary paid is $3,600 a year; the lowest $800; the average almost exactly $1200. The assessors are appointed and subject to dismissal by the tax commission. They serve for a term of three years. They have been strongly supported by the commission in their work and earnestly urged to a thorough enforcement of the law. They have responded intelligently and not only have impressed the people of the state with their tact and firmness but have convinced them that the law is to be enforced just as written. It is very largely their work that has made the income tax a success. With the property tax they have wrought something in the nature of a revolution.

Wisconsin had, from 1903 to 1911, county officers known as supervisors of assessment, appointed by the various county boards and exercising a general supervision over local assessment work, which now as then is performed by locally elected assessors. The county supervisors, appointed by the county boards and dependent upon such boards for their retention, did not accomplish much. They were timid and for the most part ineffective. Placed upon a civil service basis by the income