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Municipal Taxation 
 
 REPORT OF COMMITTEE 
 
 presented to the 
 
 Council 
 
 The Board of Trade 
 
 OF THE 
 
 CITY OF TORONTO 
 
 March 31ST, 1897 
 
 Toronto 
 
 The Hunter. Rose Company, Ltd. 
 Printers 
 
“S-eS' c a v 
 
 V^nCcy' 
 
AN EXAMINATION 
 
 OF 
 
 Personal Property Taxation, 
 
 PERSONAL PROPERTY, 
 
 as described in the Ontario Assessment Act, incluat-o 
 all goods, chattels, interest on mortgages, dividends from 
 bank stocks, dividend on shares or stocks of incorporat¬ 
 ed companies’ money, notes, accounts and debts at their 
 actual value, income and all other property, except land 
 and real estate. 
 
 Sub-Section 21 of Section 7 exempts so much of the 
 personal property of any person as is equal to the just 
 debts owed by him on account of such property. 
 
 TRADE AND COMMERCE. 
 
 The strongest indictment that can be made against 
 the taxation of personal property may be summed up 
 briefly as follows : That it checks the production of 
 wealth, discourages the formation and growth of capital, 
 imposes a tribute on savings, lays a penalty on frugality, 
 and breeds corruption, perjury and disrespect for law. 
 
 What really brings the system into justly deserved 
 contempt wherever it prevails, is the hideous- iniquities 
 
4 
 
 An Examinatioii of 
 
 brought to light on every occasion of the yearly assess¬ 
 ment. 
 
 The inquisitorial character of this tax, combined with 
 the now acknowledged fact of the impossibility of uni¬ 
 formly enforcing it, is the greatest temptation to con¬ 
 cealment and evasion. 
 
 The open dishonesty, the unblushing perjury, that this 
 system fosters is simply appalling. Those who assist in 
 maintaining this false system do not appreciate the fact 
 that when taxes are imposed on the productions of the 
 manufacturer, the wholesale jobber and the retail dealer, 
 such taxes are almost invariably shifted to the con¬ 
 sumer on whom the tax ultimately falls, who must not 
 only pay the amount of the tax, but also a profit on this 
 amount to every one who has originally paid the tax. 
 
 That the cost of goods—raw material and finished 
 product—is considerably advanced by the various pro¬ 
 cesses of taxation, is aptly illustrated by a leading mer¬ 
 chant of this city, who used his own case in showing the 
 effect of taxation on business, lie said, “ Take wool, in 
 which I deal; I pay a tax upon it, afterwards selling it 
 to a w'oollen manufacturer. As soon as he gets it it is 
 assessed again, and pays another tax. The wool is manu¬ 
 factured into cloth, and sold to a wholesale dry goQds 
 merchant. Ihe goods are in his place, and the assessor 
 assesses them again, and so on, until they come into the 
 hands of the consumer, taxed no less than three times 
 before it reaches the consumers.” 
 
 That this question affects the consumer most is unde¬ 
 niable though he does not know it. 
 
 That it is the cause for much worry and annoyance 
 
Personal Property Taxation. 
 
 5 
 
 among business men generally, and an extremely diffi¬ 
 cult and obnoxious method of raising revenue to the as¬ 
 sessors employed, is testified to by all of the best author¬ 
 ities extant. 
 
 Besides, it tends to stultify the character of every 
 business man who, struggling between his principles of 
 right and wrong and his knowledge of the fact that 
 others pay only such taxes as they cannot avoid, finds 
 profit in doing the same thing. 
 
 As a subject for taxation, personal property is unlike 
 any other species such as buildings or land. 
 
 Buildings and land, for instance, though affording op¬ 
 portunities for under-valuation cannot be concealed or 
 hidden away, and their value can be fairly estimated ; 
 but not so with personal property. 
 
 There are not a few men who, recognizing the many 
 difficulties encountered in assessing personal property, 
 will still contend that a greater amount of property could 
 be reached if such person assessed was put on oath. In 
 answer to this it may be stated that in nearly all of the 
 American States a similar law now prevails, but to no 
 purpose, even though the most stringent oaths are pre¬ 
 scribed. 
 
 It is interesting to note in this connection what the 
 committee on taxation of the Cleveland Chamber of 
 Commerce have to say in their report for April 6th, 
 1895 : “ We are required to take an oath that we have 
 made this return honestly, and that we have returned 
 all of thi§ property of every kind and description.” 
 “ The figures which have been adduced show how reck¬ 
 lessly these oaths are made. It is obvious that it has 
 
6 
 
 An Examination of 
 
 come to be regarded as entirely justifiable to conceal, to 
 evade, to resort to every subterfuge, to lie outright, and 
 even commit perjury in order to escape the burden of 
 taxation which the laws of the State throw upon us.” 
 
 To show an absurd feature of which assessment 
 methods are amenable, Thomas G. Shearman, the emin¬ 
 ent statistician, in an essay on personal property taxa¬ 
 tion, says: 
 
 “ What assessor, however honest and competent, can 
 personally value all the stock of even one grocery stock, 
 not to say the stock of all the stores in his district? 
 Fancy an assessor making a personal appraisal of the 
 stock of fifty drug stores, a hundred dry-goods stores, 
 and as many groceries. In one store there are hundreds 
 of different articles, at different prices, by the yard or 
 the pound or the gallon. Bales of goods lie side by side, 
 some worth four cents a yard, some ten cents, and some 
 two dollars a yard ; and those worth two dollars are 
 often imperceptible to the eye of anyone but an expert. 
 But how can an assessor have time even to open all 
 these bales to look at them, much less judge accurately 
 of their value ? ” 
 
 To employ assessors to undertake such a gigantic 
 task is out of the question. It follows, then, that the 
 stock of merchants and manufacturers must be assessed 
 entirely on a valuation given by themselves, as is now 
 the case. With what result this practice succeeds our 
 investigation clearly shows. 
 
 Personal property taxation not only impoverishes the 
 community that enforces it by increasing the cost of 
 living, but checks the supply and limits the demand for 
 
Personal Property Taxation. 7 
 
 the necessaries of life. The same argument also applies 
 to buildings and improvements upon land. As a com¬ 
 munity we act on the principle that what is worth pos¬ 
 sessing is worth taxing, without in the slightest degree 
 considering the character of the thing taxed or the effect 
 attending the imposition of the tax. Why should per¬ 
 sonal property be taxed ? What valid reason can be 
 given for continuing to tax it? Is personal property 
 (and improvements upon land may be added) a thing to 
 be kept in bounds, limiting the supply, like the liquor 
 traffic or the sale of poisonous drugs?. The intelligent 
 mind of a man of experience will at once reply in the 
 negative. Unfortunately we have been too prone to act 
 in matters of taxation, as if the possession of wealth in 
 whatever form w’as a hindrance to good government, in¬ 
 stead of regarding labor and the fruits of labor as a very 
 desirable thing to encourage amongst us. 
 
 One very important point that should be borne in 
 mind, which Congressman James G. Maguire gave ex¬ 
 pression to very recently, is that if there was any effi¬ 
 cacy in taxing foreign products for the encouragement 
 of home industry, every act of internal taxation that 
 can be added to the cost of the article of home produc¬ 
 tion before it reaches the consumer must operate to 
 nullify any ostensible benefit there is in any import 
 duty. 
 
 CAPITAL ACTIVE AND INACTIVE. 
 
 As has been pointed out, the prevailing system is 
 undoubtedly a great detriment to the growth of indus¬ 
 try, both in the expansion of capital already used in 
 
An Examination of 
 
 production and the employment of fresh capital th*t 
 now awaits an inviting field for investment. The cost 
 of manufacturing goods, as also the cost to the whole¬ 
 saler, who must carry the product for distribution to the 
 retailer, must necessarily be enhanced in price, because 
 of the taxation imposed. Were the system of taxation 
 similar and uniformly levied in all distributing centres 
 throughout the world, the hardships endured by our 
 own merchants and manufacturers would be consider¬ 
 ably less. But such is not the case; consequently the 
 competition existing between the merchants of Toronto 
 and those of Great Britain and Montreal, for instance, 
 is one-sided and manifestly unfair to our own. 
 
 How, then, is it possible under disadvantageous condi-? 
 tions—the mercantile community on the one side taxed 
 excessively, on the other a mercantile community free 
 from business taxation—to compete on a large scale in 
 any market with any reasonable amount of success ? 
 
 What are the inducements for merchants and manu¬ 
 facturers to extend their operations in building up a 
 home or foreign trade ? 
 
 Those who possess capital already partly used in pro¬ 
 ductive enterprises will consider very carefully before 
 attempting to invest to a further extent, nor will those 
 men having unlimited capital at their command ready 
 for a profitable investment take any risk that is likely 
 to prove injurious to them by questionable legislation in 
 force. 
 
 Capitalists and investment seekers are always timid 
 of touching anything that may be a subject for exces¬ 
 sive taxation, and hence we find millions of dollars lock- 
 
9 
 
 Personal Property Taxation . 
 
 ed up and withheld from profitable use. A point bearing 
 upon the above was clearly demonstrated very recently 
 in New York State. The State, it appeals, had for sale 
 some bonds which it desired to obtain a good price for, 
 but it was openly intimated to the State officials that 
 the price to be obtained would be much less if a law 
 was not enacted which relieved these bonds from taxa¬ 
 tion ; as a consequence of this threat, a law was intro¬ 
 duced in the Legislature, and passed, and a satisfactory 
 sale was thereby consummated. Again referring to the 
 report of the Cleveland Chamber of Commerce, (page 
 18) relating to the taxation of wealth, the committee 
 says : “ It is within the knowledge of the officers of 
 
 this chamber that manufacturing corporations which 
 would employ hundreds of men, and contribute materi¬ 
 ally to the growth and prosperity of our city, have been 
 recently dissuaded from coming to Cleveland because 
 of this Act. Specific instances are known of this. Cer¬ 
 tain it is that capital is kept from our city by the oper¬ 
 ation of this law—that men of large capital have been 
 driven away from the State, and have removed to 
 other States, because the Act is of such common noto¬ 
 riety that it would be idle to discuss it.” 
 
 Another striking illustration showing the effect upon 
 business men of ut.wise measures, is briefly told by a 
 well-known American manufacturer, who in expressing 
 his views in opposition to a bill before the New York Leg¬ 
 islature to tax all merchandise without regard to the 
 indebtedness of the owners said : “ I am a manufacturer 
 
 of gang plows, my establishment is in the interior of the 
 State, and we sell our plows in all parts of the States. 
 Pass this law and we will remove to Pittsburgh.” 
 
10 
 
 An Examination of 
 
 In his last annual message to the Council of Detroit, 
 Gov. Pingree, who is also Mayor of Detroit, very wisely 
 said that those who invest their capital in channels of 
 trade which increases the material prosperity of the city 
 should not be taxed, as a penalty for their enterprise: 
 rather should they be exempted from such burdens in 
 order to induce others to make similar investments. 
 
 REAL ESTATE. 
 
 If all taxation were removed from personal property, 
 the effect of such action would be reflected in the values 
 of real estate; contrary to the view held in some quarters, 
 the owners of real estate would not in the least be in¬ 
 jured, but rather benefited by the abolition of personal 
 property taxation. Whatever makes personal property 
 abundant and labor active, says Shearman, is sure to in¬ 
 crease rent. Wherever large amounts of goods are situ¬ 
 ated, rents are always high. Wherever people are dis¬ 
 couraged from making and keeping stocks of goods, 
 rents will be low. Rent, therefore, is an almost infal¬ 
 lible measure of the value of personal property, and of 
 the productiveness of labor in any place. 
 
 What a stimulus would be given to the trade and 
 commerce of Toronto if it were relieved of pressing tax 
 burdens and provided with better markets. Suppose 
 business men were freed from part of their obligations 
 to the community, would they not be in a better posi¬ 
 tion to compete with the merchants and manufacturers 
 of other localities who are now underselling them, be¬ 
 cause of the few restrictions resting upon them { Are 
 
Personal Property Taxation. 11 
 
 not numerous business concerns encouraged to move else¬ 
 where on account of better inducements ? 
 
 There can be no denial of the fact that within the last 
 ten years scores of manufacturers have left the city, as 
 also numerous other concerns, besides the many who 
 have retired altogether from business. 
 
 In view of the facts stated we must deduce one thing 
 at least that cannot be overlooked, and that is, that real 
 estate values have declined largely in consequence of the 
 loss of manufacturers and a numerous population of 
 workers. This fact cannot be too strongly borne in 
 mind. The owners of real estate must know by their 
 experience in recent years that their improved property 
 has given little in return, and in many instances has 
 produced no return in interest whatever to them. 
 
 What folly it is, then, for this class to oppose a change 
 in the incidence of taxation, that will likely induce men 
 of capital to move into our midst to engage in enter¬ 
 prises requiring the aid of artizans, clerks and laborers, 
 and who would thus bring with them their personal 
 property, and keep within our gates all those who 
 are now in the city. An increasing population means a 
 filling up of our vacant dwellings and stores, thus af¬ 
 fording additional revenue to the owners of improved 
 property, and a better and more profitable market for 
 our business men. 
 
 THE PRESENT SYSTEM A FAILURE. 
 
 If the assessment returns are to be believed, in nine- 
 tenths of California there is not a pound of butter, in 
 
12 
 
 An Examination of 
 
 four-fifths of the State the sheep do not produce any 
 wool, fifty counties have quantities of bee-hives, but 
 only four have any honey-comb. Personal property is 
 vanishing from San Francisco ; the general result of ex¬ 
 perience has shown that the proportion of personal pro¬ 
 perty to the whole assessed value of property has steadi¬ 
 ly fallen from fifty per cent., in 1861, to thirty-four per 
 cent, in 1874, twenty-six per cent, in 1880, and thirteen 
 and one-half per cent, in 1894. So, after a very short 
 experience, the California Legislature passed a law de¬ 
 claring the personalty tax to be impracticable and ab¬ 
 surd and directed that it should not be enforced : and 
 it is not. 
 
 The experiences of Boston, Mass., assessments is some¬ 
 what peculiar; there the assessors are armed by law with 
 almost despotic powers of search and powers to make 
 valuations. After exhausting all their powers of enquiry 
 they are allowed to meet in secret, to go through a pro¬ 
 cess of arbitrary assessments. The return of details for 
 the year 1889 showed that the whole amount of taxable 
 personal property which they were able to discover was 
 thirty-nine million dollars, exclusive of bank stock. 
 Being dissatisfied with the estimates they proceeded to 
 multiply it four and one-half times by a mere guess. 
 As much of the things visible to the assessors consisted 
 of merchandize and machinery the result of the assess¬ 
 ment bore unequally upon the mercantile community, 
 and, of course, simply increased the cost of goods to 
 the consumer. In the State of Ohio the assessment re¬ 
 turns for cities and counties gathered by a Tax Com¬ 
 mission appointed by Gov. McKinley in the latter 
 
Personal Property Taxation. 
 
 13 
 
 part of 1893, were forced to conclude in their report to 
 the Governor, saying : “ It is useless to pursue this sub¬ 
 ject further. While in the country counties taxation of 
 intangible property is perhaps feasible, it is in the city 
 counties an utter failure. It is confidently believed that 
 no appreciable part of the intangible property existing 
 in the city counties is reached by our method of taxation. 
 It is the country counties which pay the taxes upon 
 personal property.” In Ohio, California, Vermont, and 
 the other States where the listing system has been 
 adopted under which every citizen is required to give a 
 sworn statement of his personal property, oaths have 
 ceased to be regarded as in the least binding. 
 
 Cook County, Illinois, in which the city of Chicago is 
 situated, in the report on taxation of the Bureau of 
 Labor Statistics, shows that the equalized assessed value 
 of personal property in the whole county for 1873 
 amounted to $287,292,809. Twenty years later (1893), 
 the amount valued for assessment fell to $145,318,403, 
 an actual decrease of $141,974,406. When the fact is 
 taken into account that the population from 1870 to 
 1890 increased 58 percent, the figures above attest an 
 appalling state of affairs. In Connecticut a Special Tax 
 commission recently reported that notwithstanding the 
 growth and increase of wealth, the proportion of personal 
 property has steadily declined from year to year. 
 
 The select committee appointed by the House of Re¬ 
 presentatives to investigate tax assessments in the Dis¬ 
 trict of Columbia in submitting their report May 24th, 
 1892, said in part: “ Taxes on personal property may 
 be collected from the poorer inhabitants of sparsely 
 
14 
 
 An Examination of 
 
 settled districts, but they cannot be collected from the 
 rich in great cities, and in the District of Columbia in 
 spite of the rapid growth in population and wealth and 
 the settlement here of many men of large means. The 
 returns for personal property have been falling off until 
 they now amount to the preposterous sum of $12,000,000. 
 The committe further said, that in the minds of the 
 thoughtful men who had appeared before them there 
 was a general and most decided opinion that taxation 
 for the needs of the district should be concentrated upon 
 one subject, “the existence and value of which can be 
 readily ascertained, and the justice of taxing which is 
 perfectly clear.” The assessors of New York State re¬ 
 ported in 1874, that less than 15 per cent, of the personal 
 property of the State liable to taxation finds a place on 
 the rolls of the assessors. In 1885 the per centage paid by 
 personal property decreased to 11.47, and in the city of 
 New York, with all its immense wealth, the assessors 
 were only able to record for taxation 18 per cent, of the 
 personal property. Four counties of the State of Mis¬ 
 souri, in which all large cities worthy of the name are 
 situated, return less than one half of the personal 
 property that was returned by the remainder of the 
 State. In Cincinnati, Ohio, the assessed value of personal 
 property in 1867 was $68,412,285. Nine years later 
 there was only $42,571,661. 
 
 Taking the city of Toronto for an example, the amount 
 of personal property, exclusive of incomes, in 1890 was 
 $9,470,988, in 1892 $10,808,660, but it fell again in 1893 
 $8,553,024, and for the year 1896 the amount assessed 
 is still less, viz., $8,250,000. 
 
Personal Property Taxation. 
 
 15 
 
 INEQUALITIES IN TORONTO. 
 
 Nothing in recent years, in so far as Toronto taxation 
 is concerned, has been so vividly demonstrated in show¬ 
 ing the inequalities of the present system, than the pro¬ 
 ceedings before the Court of Revision held in January 
 last. The number of appealing cases before the Court 
 was altogether out of proportion to the record of pre¬ 
 vious years. The statement of Mr. George Beardmore, 
 a leading leather merchant, who appeared before the 
 revision judges, best, perhaps, expresses the sentiments 
 of the majority of men doing business in the city of 
 Toronto. Mr. Beardmore said that rather than go to 
 the trouble of appealing and having to expose his whole 
 business, he preferred to be assessed. He further re¬ 
 marked that “ if you go on as you are doing, enforcing 
 this personal tax, you will drive all the capital out of 
 Toronto.” Another case dwelt with in which the firm 
 strenuously objected to exposing their private transac¬ 
 tions to public view, when called upon to meet an assess¬ 
 ment of 8400,000 levied against them, was the T. Eaton 
 Co., Ltd. No instance in the annals of Toronto was so 
 bitterly contested as the case referred to above. After 
 much time and expense entailed in contesting the judg¬ 
 ment of the assessors, the firm eventually succeeded in 
 having the Court reduce the amount to $100,000. Com¬ 
 petent men of experience can testify to the fact that this 
 firm do not carry a stock of less than $500,000 in value. 
 How a large part of this amount escaped assessment is 
 a question for students to ponder over. One of the 
 most glaring cases of shifting taxes was brought to view 
 
16 An Examination of 
 
 by the appeal of a firm of wholesale dry goods mer¬ 
 chants, who had been assessed for $90,000, though this 
 firm carries a stock amounting to no less than $350,000 
 They very successfully obtained relief from taxation for 
 the entire amount of their assessment. Another firm 
 who had been assessed for $80,000, not being content 
 with a rather low estimate placed, brought every pres¬ 
 sure to bear in order to have a lower assessment made 
 eventually obtaining a reduction amounting to $55,(,Oo' 
 A large firm of manufacturing stationers, who carry 
 machinery to the value of $15,000 (which is exempt 
 under the law) have no personal property liable to 
 assessment, and many other firms have succeeded in 
 showing no stock liable to taxation, though carrying 
 large stocks of goods. Several of the breweries have 
 secured very substantial reductions, leaving very little 
 of value to be levied upon. 
 
 As to the possibility and likelihood of evasions, abun¬ 
 dant evidence can be shown from actual experience 
 luring the last few months. 
 
 UNFAIR DISTINCTIONS. 
 
 That an unfair distinction's drawn between the agri¬ 
 culturalist, for example, and those engaged in mercantile 
 pursuits, is easily seen by the manner in which the As¬ 
 sessment Act applies. The farmer, who confines his at¬ 
 tention to raising grain and live stock, is so favored by 
 the law that no taxation is imposed upon his products. 
 But the business man, who invests his capital in manu¬ 
 facturing articles of commerce, in wholesaling and re¬ 
 tailing drygoods, groceries, boots and shoes, or any other 
 
17 
 
 Personal Property Taxation. 
 
 £ class of merchandise. The law says he must be taxed 
 on the capital value of his stock. Another feature of 
 the Assessment Law is that the man who invests his 
 capital in grain for shipment is exempt from taxation, 
 , but the importer of lumber, iron or fruit gathered from 
 • the orchard, and numerous other products of the soil, 
 must, perforce, be levied upon for taxes. The merchant 
 who brings 820,000 or 8100.000 worth of goods into the 
 ‘ city must pay the taxes upon that amount, while the 
 ; lender of money is required to pay only the taxes upon 
 the interest he receives. And if he invests in Munici- 
 : pal or Dominion Bonds he is exempt on either principal 
 or interest. The anomalies and contradictions in the 
 \ Assessment Law—far too numerous to detail here in all 
 particulars—at once condemn the whole system of taxa¬ 
 tion as applied in the Province of Ontai'io and else¬ 
 where. 
 
 JUSTICE. 
 
 As a matter of policy the levying of penalties upon 
 productions or the powers of production is totally bad. 
 As a matter of principlejustice is altogether disregarded 
 in our methods of taxation. There can be no denial of 
 the doctrine that what a man produces belongs to him¬ 
 self. The powers which abide in man enabling him to 
 produce things, tangible and intangible, belong alone to 
 him. What has been honestly earned or acquired, which 
 has the impress of labor in or upon it, is sacredly the 
 property of the person who so possesses it. To take, by 
 process of force, law, or through means of taxation, any 
 part of that product which labor has given a clear title 
 to, without some just equivalent in cash, personal ser- 
 
23 An Examination of 
 
 vices, or public benefits, is manifestly a robbery of the 
 individual. The only justifiable law of taxation that 
 can be upheld and maintained is that which makes a 
 true distinction in levying taxes, apportioning them 
 in accordance with the value of public benefits conferred . 
 To levy taxation in proportion to wealth possessed is 
 contrary to all principles of Justice and Equity. 
 
 THE BUSINESS TAX. 
 
 In lieu of the taxation of personal property, the As¬ 
 sessment Act of Ontario renders it optional with Muni¬ 
 cipal Councils to apply a business tax, not to exceed 7£ 
 per cent, of the annual value of the premises in which 
 the business is carried on. Since the enactment of this 
 clause of the Act, no city or town in the Province has 
 so far made any attempt to adopt the substitute ; but 
 in the Provinces of Quebec and Manitoba (where a busi¬ 
 ness tax is also permissable). The City of Montreal 
 and the City of Winnipeg have discarded the personal 
 property tax for the business tax. In Montreal the rate 
 does not exceed 7£ per cent., and in Winnipeg the rate 
 is equal to 10 per cent, of the yearly rental value. 
 
 The City of Quebec applies a business tax, though 
 upon a different basis ; the tax is levied at the rate of 
 fifty dollars for every four hundred dollars of the assess¬ 
 ed yearly value of the premises. 
 
 If report be not misleading, the City of Glasgow, 
 Scotland, also levies a tax of 10 per cent, on the rental 
 value of premises. 
 
 From all that can be learned, the business tax plan is 
 
Personal Property Taxation. 
 
 10 
 
 preferable in many respects to the personal property 
 tax, and while it may be regarded as reactionary, as the 
 lesser of two evils, the business tax is the least harmful. 
 
 Whether a business tax or a personal property tax be 
 applied as a means of raising revenue, the commun¬ 
 ity would still be maintaining and upholding a vicious 
 principle of taxation. There is this to be said of a busi¬ 
 ness tax, however: it will reduce the burdens of taxation 
 on business, place on an equality the commercial inter¬ 
 ests of Toronto and Montreal, do away with the fraud 
 and perjury necessarily associated with the prevailing 
 system, lighten the conscience of business men and lessen 
 the labors of the assessor. 
 
 Numerous objections can be formed in opposition to 
 the business tax, but such objections are inseparable 
 from any form of taxation not really scientific and equit¬ 
 able in character. 
 
 The question of sufficient revenue under a business 
 tax is not a doubtful point; the collection of such revenue 
 in its entirety, however, is matter of some concern lo 
 which the authorities must centre their attention if ac¬ 
 tion is contemplated along these lines. 
 
 From accurate statistics collected through the assess¬ 
 ment department and other sources, the following results 
 have been arrived at, showing in part that under the 
 proposed “ business tax ” plan : 
 
 1st. The burdens of the business community would be 
 materially lightened. 2nd. That more than sufficient re¬ 
 venue would be derived as an offset to the amount lost by 
 the abolition, of taxes on personal property. For ex¬ 
 amples, portion of streets occupied for business offices, 
 wholesale and retail establishments, are used. 
 
Location. 
 
 Yonge Street, East Side— 
 
 King Street to Shuler Street. 
 
 King Street East, North Side— 
 
 Francis Street to Yonge Street... 
 
 King Street West, North Side— 
 
 Yonge Street to York Street. 
 
 King Street West, Soutli Side— 
 
 Yonge Street to York Street. 
 
 Bay Street, East Side — 
 
 Front Street to Wellington Street - 
 
 Totals . 
 
 Personal Property . j 
 | Taxation. Revenue, j 
 
 Business 
 On Rental 
 Values. 
 
 Tax. 
 
 Revenue. 
 
 j Total Assessed 
 Value 
 
 Pevsonal t 
 Property and 
 Income. 
 
 Total 
 Revenue j 
 Derived. 
 Rate, 17 
 Mills in 1 
 the $ 
 
 Total 
 
 Assessed , 
 
 Value 
 Buildings 
 and Land. 
 
 Business 
 Tax of 7i 
 per cent, 
 on Rental 
 Values 
 would Raise 
 
 $503,577.00 
 
 . 88,560.81 1 
 
 82,631,951.00 
 
 813,817.74 
 
 . 335,676.00 
 
 6,006.49 | 
 
 1,089,460.00 
 
 5,719.66 
 
 369,548.00 
 
 6,282.31 j 
 
 1,653,719.00 
 
 8,682.00 
 
 312,890.00 
 
 5,319.13 
 
 1.730,838.00 
 
 9,086.90 
 
 202,000.00 
 
 3,434.00 
 
 244,100.00 
 
 1,281.52 
 
 
 829,602.74 
 
 
 $38,587.82 
 
 An Examination of 
 
Personal Property Taxation. 
 
 *21 
 
 WHERE PERSONAL PROPERTY IS 
 NOT TAXED 
 
 For centuries it was the practice in nearly all Euro¬ 
 pean countries to assess personal property, but the mag¬ 
 nitude of the task and the difficulties encountered led, 
 ultimately, to its abandonment generally. 
 
 In England, Ireland and Scotland the taxation of per¬ 
 sonal property fell into disuse many years ago. The 
 sources of all municipal revenue in England, for instance 
 are the rates which are levied on real estate exclusively. 
 As the owners of personal property do not contribute in 
 taxes directly on the amount of their possessions, it 
 must not be supposed that they are thus relieved from 
 taxation altogether, for, on the contrary, this class can¬ 
 not escape their due proportion of the cost of govern¬ 
 ment; it is paid in higher rent. Though the manner of 
 raising revenue is somewhat different in Scotland and 
 Ireland, practically the same principle is employed 
 throughout the United Kingdom. 
 
 In the colony of New Zealand, says Hon. Edward 
 Withy, of Auckland, there is no taxation imposed on 
 personal property by the Colonial Government, nor is 
 there such a tax imposed by the municipalities. 
 
 Many of the eastern cities of the United States offer 
 an inducement equivalent to a bonus in the form of ex¬ 
 emption from taxation. Philadelphia, Baltimore, Buffalo 
 and Brooklyn, all are manufacturing cities, do not assess 
 merchandize, and the manufacturers are taxed only on 
 the value of their buildings and land. That this relief 
 
22 
 
 Av Examination of 
 
 from taxation is beneficial to those concerned, is evident 
 from the complaints expressed in other American cities 
 by manufacturers and others who are forced to compete 
 with the former class under disadvantageous circum¬ 
 stances, but who are now endeavoring to obtain similar 
 legislation for themselves. 
 
 The Merchants and Manufacturers’ Association of Bal¬ 
 timore, M’d., declares in an official document, “ that the 
 exempting of manufacturing plants has been one of the 
 greatest sources of prosperity to Baltimore, and that the 
 impetus thus given to the establishment and exten¬ 
 sion of manufacturing industries in our city has far ex¬ 
 ceeded in value the taxes which have been abated. In 
 some lines, Baltimore now ranks among the leading 
 manufacturing centres of the country, and this mainly 
 the result of the growth in the last fifteen or sixteen years. 
 Employment has been furnished to thousands of our 
 citizens, and it would be difficult to estimate the addition, 
 either to the number of inhabitants or to the amount of 
 taxable basis directly due to the development of our 
 manufacturers.” 
 
 In the Cities of Montreal, Quebec and Winnipeg per¬ 
 sonal property is not taxed, thus affording an advantage 
 to the merchants and manufacturers of these cities over 
 those of this city. Further reference will be seen else¬ 
 where. 
 
 PROGRESSIVE LEGISLATION. 
 
 It will be interesting to note in what measure ad¬ 
 vancement in tax laws is taking , place in the different 
 
Personal Property Taxation. 
 
 23 
 
 centres of the United States. The Assembly of the 
 State at California in Session (March, 1897) has passed 
 a local option in taxation amendment, by a vote of 54 
 to 16 against. The amendment in part reads : 
 
 “ The legislature shall provide for the levying of taxes, 
 “ and the raising of revenue in such manner as it shall 
 “ deem just, provided that in case so determined by a 
 “ majority of the electors of any county or other political 
 “subdivision of the State voting thereon, taxes for local 
 “ purposes may be imposed as the electors of such county 
 “ or other political subdivision may decide, and it shall 
 “ be the duty of the legislature to provide for submit- 
 “ ting to such electors the question of the regulation of 
 “ their local taxation, under such regulations as it may 
 “ prescribe.” 
 
 The agitation from this measure has been long and 
 persistent, and was strongly supported by the business 
 men of the entire State. The Senate of the State of 
 Washington by a vote of 25 to 5, March the 1st, 1897, 
 passeu a bill providing for the exemption of personal 
 property, and improvements in or upon land to the 
 amount of $500 for each person assessed. Another im¬ 
 portant measure by the Washington Assembly, in Feb¬ 
 ruary, was a local option in taxation amendment similar in 
 character to that passed in California. Besides the 
 States of California and Washington, the Colorado 
 Assembly also passed a local option bill, and with every 
 probability of its passing the Senate. In addition to 
 the above, other States in the union, including Texas, 
 Ohio, Minnesota, Massachusetts and New York, the 
 Legislatures are considering home rule or local option in 
 taxation amendments. 
 
24 
 
 A n Examination of 
 
 With regard to the bill introduced in the New York 
 Assembly, it may be stated that it has the support of 
 the entire business sections of the State, including many 
 prominent real estate boards and a fair proportion of 
 the agricultural community, who regard the local option 
 as the best and only way in which to secure a more equit¬ 
 able system of taxation, appliable to the needs of com¬ 
 munities desirous of making a change. The bill reads ! 
 in parts as follows : 
 
 •“ The voters in each incorporated district of this State 
 “ may, in their discretion, direct that all taxes in such 
 “city shall be levied upon the assessed value of personal 
 “ property alone : or upon the assessed value of real estate 
 alone, including land and all improvements thereon I 
 “ and therein: or upon the assessed value of land alone, 1 
 “ exclusive of improvements and of personal property : j 
 “ or upon the assessed value of land, improvements ' 
 “ taken together.” 
 
Personal Property Taxation. 
 
 OPINION OF AUTHORITIES. 
 
 1. Ex-Governor Altgeld, Illinois.— 1 “ Among all 
 reforms there is none more far-reaching and beneficial 
 in effect than the one that would give local governments 
 the right to choose their own system of taxation. This 
 State, like every one in the Union, is cursed by a revenue 
 system which is corrupting to officials and oppresive to 
 every citizen, whether he owns property or not.” 
 
 2. The Illinois Bureau of Labor Statistics (1892) 
 Recommends. —Fifth, local option in taxation: “That 
 the constitution be so amended as to permit each political 
 division (municipality) in the State to adopt its own 
 system of raising all taxes within its jurisdiction.” 
 
 3. New York “ Journal.”— “ The taxation of produc¬ 
 tive enterprises increases the cost of goods, discourages 
 the production, and lessens the demand for labor. 
 The right to make exemptions should be under the 
 control of local governments.” 
 
 4. New York “Times.”—Local Option in Taxation. 
 —The legislature could take no single step which would 
 
An Examination of 
 
 2C> 
 
 go so far towards solving the problem of taxation in 
 this State, and leaves so little .ground for dissatisfac¬ 
 tion as by passing the bill, an Act to regulate assess¬ 
 ments and to provide for home rule in taxation. This 
 bill ought to pass, because it is sound in principle, and 
 because it will remove the chief difficulty that has 
 been encountered in every effort to reform the system 
 of taxation in the State.’' 
 
 5. Brooklyn Revenue Reform Club. — “This club, 
 with the unanimous approval of a meeting of gentlemen 
 representing the principal financial institutions of 
 Brooklyn, has undertaken the work of arousing public 
 sentiment in favor of the entire abolition of taxation 
 upon personal property, especially in the city of Brook¬ 
 lyn. We seek to abolish the taxation of personal pro¬ 
 perty in the only way in which it can be abolished, 
 that is, by securing local option and home rule in the 
 matter.” 
 
 6. “ Brooklyn Citizen,” referring to tax reform 
 through local option, says—“ This, it seems to us, will be a 
 decided step in the direction of rational tax reform. It 
 will enable every community to put its own ideas in 
 operation without restraint from^ its neighbors or pre¬ 
 judice to them in case an unenlightened view character¬ 
 ize its action.” 
 
Personal Property Taxation. 
 
 27 
 
 /. 7. Toronto “ World”— “If the Legislature itself is not 
 prepared to simplify the Assessment Act, why not al¬ 
 low the municipalities to make the attempt? By 
 giving each municipality authority to regulate its own 
 assessment we would soon find out by practical experi¬ 
 ence which is the best system.” 
 
 r 8. Toronto “News” —“Every form of wealth upon 
 which taxes are levied can be covered up by false 
 statements and equivocations, and these are constantly 
 [resorted to in order to escape the assessment. The peo¬ 
 ple of any given municipality may well be left to de¬ 
 cide the matter for themselves, and this would be the 
 effect of a Local Option Act such as tax advocates 
 have been agitating for years.” 
 
 I 9. “ Canadian Farmers’ Sun ” “ Every municipality 
 
 should enjoy the right to determine in what manner it 
 shall levy its taxation. A proposition that this power 
 shall be given to municipalities has been objected to, 
 though no man can tell why. The electors can surely 
 take care of themselves, and introduce no method of 
 taxation they do not believe to be a good one.” 
 
 10. Assessment Commissioner Mauguan, in a report 
 to the City Council February 9th, 1895, referring to per- 
 
28 
 
 A n Examination of 
 
 sonal property taxation, said in part: “ Your committee 
 will readily see that various kinds of property may be 
 differently assessed ; for instance, it is generally conceded 
 that real property is the basis of assessment, being fixed 
 and visible, while personal property is easily concealed, 
 and easily removed, and hence, a very uncertain article 
 of assessment even under the present law.” 
 
 CONCLUSIONS 
 
 The prevailing system of taxation is inherently defec¬ 
 tive, otherwise there would not he presented to view- 
 such a spectacle as the report herein contains. 
 
 TJ^ere is only one effective way by w'hich the many 
 inequalities, injustices and other harmful results attend¬ 
 ing the taxation of personal property can be remedied, 
 and that is, abolishing taxation on personal property en¬ 
 tirely. As a step towards bringing about this result we 
 would suggest to the Municipal Council that it secure 
 legislation from the Provincial Government permitting 
 local option in matters of taxation, leaving to the judg 
 ment of the Council or the citizens the right to adjust 
 taxation in the manner that best suits the needs of the 
 community. 
 
 And it is our opinion, should legislation be secured, 
 that immediate action be taken to concentrate taxation 
 upon buildings and land exclusively, which source is 
 least liable to undervaluation and which alone reflects 
 
Personal Property Taxation. 29 
 
 (in increased values) the growth and industry of the 
 whole people. 
 
 Toronto, March 30th, 1897. 
 THEREFORE this committee respectfully recom¬ 
 mends the Council of the Board of Trade to take action 
 to secure the end : 
 
 1st. That all taxes on business personality be aband¬ 
 oned. 
 
 2nd. That a business tax on rental value be substituted 
 for personality on business capital. 
 
 (Signed), Stapleton Caldecott, 
 
 Chairman.