The wealth basis is much nearer to the present general property tax as actually administered.  The assessment of general tangible wealth would undoubtedly be more easily done than would that of individual capitals, and likewise be both easier and juster than the present inconsistent policy.  Tangible things are comparatively easy to find, measure, and evaluate where they are, and if they are all taxed it is evidently the same as if all the capital values based upon them were taxed in the owners’ hands.  The various equitable claims of different owners in one source of income could be left to adjust themselves through shifting, mainly in the choice of investments, once the plan had become generally applied.

Sec. 6. #Needed reform of assessment.# The assessment of the present general property tax is notoriously inefficient and unjust.  The root of most of the present evils (other than those above discussed) is the method of local election of assessors, which usually is by townships, but in some cases by counties.  The local assessor’s estimate of value is used as a basis for taxation not only for his district but for the larger units (county and state).  Thus every local assessor is tempted by the conflict of interests not only among the taxpayers in the district which elects him, but by the conflict of interests between his district as a whole and other districts.  The lower the ratio of assessment to true valuation in any township compared with that of the other tax districts, the smaller the proportion of county and state taxes that the people of the district have to pay.  Willingness to under-assess property often becomes thus the chief virtue of an assessor in the eyes of his political constituents.  This has led in many cases to absurd underassessment, which boards of equalization have proved powerless to remedy in any great measure.  A sounder plan would be general state assessment, with a permanent expert board of commissioners employing a corps of state assessors under the merit system of appointment.  This plan has as yet been applied only to assessment of railroads and some other public-service corporations.

Sec. 7. #Separation of state and local taxation.# For the reason just indicated the failure of the general property tax has been most conspicuous where it is used as a basis for state taxation.  This has led some financial students to advocate the plan of separation of state and local taxation.  This means the assignment of certain sources of revenue (such as corporations and the liquor business) primarily or exclusively to the state, leaving all real estate and the general property of non-corporate persons to be taxed by the counties and minor divisions under the general property tax.  The plan has been increasingly applied in New York, until, in 1906, it became almost complete.  In 1910 the plan was adopted in California; and it is largely used in New Jersey, Connecticut, Delaware, and Pennsylvania, and to a small extent in some other states.  An efficient state assessment of general wealth would accomplish most of the advantages claimed for this plan, while avoiding some of its dangers.