The University of North Carolina news letter. online resource (None) 1914-1944, June 04, 1924, Image 1
The news in this publi cation is released for the press on receipt. THE UNIVERSITY OF NORTH CAROLINA NEWS LETTER Published Weekly by the University of North Caro lina for the University Ex tension Division. JUNE 4,1924 CHAPEL HILL, N. C. THE iraiVERSITY OF NORTH CAROLINA PRESS VOL. X, NO. 29 Editorial Board* B. a Brstoaon. 3. H. Hobb*. Jr.. L. R. WIlasD, B. W. Knight. D, D. Carroll. J. B. Ballltt. H. W. Odom. Bnterod aa aoeond-elaaa matter Novembor 14.1914, at the Poatoffice at Chapel Hill. N. C., nnder the act el Angoat 24. 1811 TAXABLE WEALTH IN N. C. WEALTH AND TAX HATES Elsev/here in this issue will be found n table in which the counties are ranked according to the aggregate of wealth listed for taxation on a per in habitant basis for the year 1923. The accompanying column shows the aggre gate county tax rate in each county. The aggregate rate does not include special district or local levies against property, such as in the case of special levies for local school districts. The April 1€ issue of the News Letter car ried a table and interpretationj|of tax able wealth by counties. This brief sketch mainly concerns tax rates on wealth listed for taxation. Aggregate county tax rates) .vary greatly in the 109 counties of the state. Explanations for the widely different levies on property are almost as num erous as the counties of the state. The two extremes in aggregate county tax rates are represented by Forsyth and Clay. Forsyth is the richest and most populous county in the state and enjoys the lowest aggregate county tax rate, the levy being 56 cents on the one hun dred dollars listed for taxation. Clay ranks next to the bottom in total wealth and last in population and 'Jtias the highest aggregate county tax rate found in the state. As a rule the rate tends to be high in poor and sparsely settled counties, and low to moderate in the richer anU more populous ones. Divergences from this general tendency may be due to many causes. However, the rate on property is of ten a very poor indication of the real burden of taxation. In some counties property is valued at a fair percent of its true value while in others the tax books give little indication of the real wealth of counties. Some of the coun ties which appear moderately wealthy are really poorer than others whose listed property is much smaller. See News Letter Vol. X, No. 22. The point we wish to make is that some counties work for maximum values and minimum rates while others hide off the tax books as much wealth as pos sible and in order to raise on the wealth listed for taxation the revenue needed to run the schools and the county gov ernment the rate must be high. The actual tax burden in such counties is much lighter than the rate indicates. Most likely Wilkes county is a fine il lustration of this point, for Wilkes is not the poorest county in the state, real wealth considered, although she is the poorest on the tax books on a per inhabitant basis. Four Classes In this discussion of taxable wealth and tax rates the counties of the state may be divided into four groups. In the first group appear those coun ties with a large amount of taxable wealth which are able to maintain good schools and effective county govern ment on from low to moderate tax levies. Forsyth, the richest county in aggregate wealth, does much for her people, although her county tax levy is only 66 cents on the hundred dollars of listed property. Her low rate is due partly to the fact that the bulk of the wealth in Forsyth is listed for taxation. Buncombe, Rowan, Iredell, and Meck lenburg also come in this class. A second group comprises those coun ties whose tendency it is to undervalue property for tax purposes. In those counties of this class which have fairly large expenditures the county rate must be very high to provide the need ed revenue. A third group is composed of counties with low valuations and low rates and in such counties are found the poorest schools, roads and the like to.be found in the state. These are the counties with less tax-willingness than taxable wealth, and it is in such counties that one finds the remaining areas of social and economic stagna tion. As a rule such counties are sad ly lacking in leadership, which usually explains why some poor counties have a large amount of tax-willingness. The fourth group is composed of sev eral counties which not only have a fairly large amount of taxable wealth per inhabitant but which also have high tax rates on the listed property. These are the counties that are liberally sup porting schools, roads, and other public enterprises. Usually such counties have a large bonded debt. In this group fall such counties as Lenoir, with the largest per inhabitant county debt— a county that spends liberally on it self; New Hanover and Wilson, both of which have the county-unit school sys tem with no local tax districts; and Alamance, Henderson, and others which are spending liberally but whose tax rates are not so high. The Rate Increases The average aggregate county tax rate in the state is steadily increasing. The rate before revaluation in 1920 was very high in some counties be cause property was not uniformly list ed, just as it is high today in counties that have put into effect large reduc tion in tax assessments. Following re valuation the rate decreased, enormous ly in some counties, but since 1921 some counties not only have chosen to retain the revaluation figures but have added enormously to the wealth on the tax books. Others have effected whole sale horizontal reductions. The result is that conditions are authoritatively; reported to be, much worse today than before revaluation; that is, there is a larger difference between the counties that list at high rates and those that list at low rates. The average aggregate county rate in 1921 was approximately 91 cents on the hundred dollars of listed property. The rate in 1923 averages around $1.16. The increase is due in part to increased expenditures on the part of the county governments for better schools, im proved roads, new bridges and the like. But also it is in some measure the re sult of horizontal reductionson assessed valuations adopted by a majority of the counties. Practically a billion dollars of wealth was3wiped offithe tax books, and to raise the necessary reve nue the rate had to be proportionately increased. Special Levies The aggregate county tax rate is not always a fair indication of the real tax burden of all people within a county. Local district assessments often add enormously to the taxes paid. Within each county where the county unit of taxation for schools has not been adopt ed there are local school tax districts. Often there are special taxes for roads, bridges, drainage and so on. In some counties every school district has voted a local school tax. In other counties there will be only one or two local tax districts, so that the county tax is prac tically the entire tax. Special district taxes vary enormously. Often the tax for schools in one district is five times as high as in the adjoining district. Which is to say that the tax burden on property in North Carolina is not to be measured entirely by the county rate, which is more than four times as high in one county as in another;but in thousands of little districts, special assessments for roads, drainage, schools, and so on, have much to do with the to tal burden. The increase is often very small but also it is often as burdensome as the county rate of many counties. These local assessments like the county assessments have been voluntarily as sumed by the voters at special elec tions, and they represent the willing ness of local groups of property own ers to invest more liberally on them selves than is true of the whole county. Falls on Whites The burden of taxation in North Ca rolina, as elsewhere in the South, falls almost wholly on white people. While negroes in North Carolina are 29.8 per cent of our population, they own only 5 percent of the wealth listed for tax ation and pay about 6 percent of all property taxes. The aggregate of property listed for taxation in the state is $2,664,012,120, of which $136,295,400 is listed by negroes and negro-operated corporations. Property listed|by whites, including the physical valuation of white-operated corporations totals $2, - 190,158,363, and the valuation of public utilities and corporation excess totals around 327 million dollars, practically all of which is owned by white people. In the eastern counties where the negroes are largely concentrated the COUNTY GOVERNMENT County government in North Ca rolina at the present time involves an annual expenditure for all county purposes o f approximately 30 million dollars. This is approximately the sum required to maintain the county school systems, which includes all schools in counties with the country-wide tax. system, to main tain county roads and bridges, to maintain the county offices and to defray all other expenses involved in operating the 100 county govern ments of the state. It is a large sum of money that we spend annual ly on county government in North Carolina, and its more economical utilization demands the election of county officers of the highest type. County government today requires men of the calibre employed to di rect million-dollar corporations. tax burden falls most heavily on the whites. In Scotland county for instance, negroes are 66.2 percent of the total population, yet they pay less than four percent of all property taxes. The ne groes are tenant farmers mainly, and create wealth for landlords. Indirectly they pay taxes, but directly the taxes are paid by the whites who own nearly all the property. In the thirteen counties with negro majorities and in the other counties with large negro ra tios, the burden of taxation falls heavi ly on white property owners, and it is in such eastern counties that one hears a large part of the talk about high taxes. And their taxes are high, as they must always be wherever from a half to two-thirds of the people are practically propertyless and the bur den must be borne directly by the few who own the wealth. Indirectly of course, a large share of the tax burden which falls on land is paid by the white and negro tenants who cultivate the land. In Scotland and Edgecombe counties only a fifth of all farmers own land. The tax is paid directly by this small class of white landlords, and the total seems large, but indirectly the burden rests in some measure on the shoulders of the tenant masses. There is no remedy for the high tax burden on landlords in such counties, except to make owners out of the tenants, and instead of a movement in that direction the tenant rate is steadily increasing. The study of taxation in North Caro lina is an endless one. Our main idea here has been to point, out some factors affecting tax rates and tax burdens in various counties. In conclusion let us again state that the percent of true values listed for taxation varies enor mously in the 100 counties. The situa tion is nothing short of ridiculous. Tax rates vary greatly but due to unequal assessments the rates do not always indicate the actual burden. Special local assessments often add much to the tax burden on property. Ninety-five percent of all property taxes are paid by whites, and the di rect burden falls most heavily on white landlords in counties with large negro populations and excessive ratios of farm tenants. The actual burden is heavy in some counties while in others it is light, depending upon true wealth and how liberally the counties are sup porting schools and county govern ment. The burden of taxation within counties is far from equal, just as it is unequal for the different counties. While all of the above is true it is well to re member that every cent of taxes paid on property is levied locally and spent locally. It is all spent within the coun ty, and within the special tax districts where levied. No property tax leaves the county in which it is col lected. There is just one thing that we can say in favor of taxes in North Carolina. The total assessment on property aver ages less in this state than in any other state in the Union. But the bur den does not rest equally, and most likely we are farther from equality than we have ever been. We know of no reasonable being who will not agree that all property should be listed uni formly in every county. Then why isn’t it so listed? The tax burden can never be equalized until this uniform listing is accomplished, and when the burden is equalized we will hear much less talk about taxes than we hear today.— S. H. H., Jr. THE CROPPER’S HARD ROAD Although tenant farmers in the United States in large numbers have succeeded in accumulating funds out of their farm earnings to make initial payments on contracts for the purchase of land, the process has become one of considerable difficulty in many parts of the country, say economists of the United States Department of Agricul ture who have studied the conditions under which it is possible for ten ant farmers to rise to the status of owning farmers. Increase in the val uation of land has sometimes discour aged many tenants from attempting to buy land, and may have increased the difficulties of purchasers in the early stages of payment. These conclusions are based on extensive, data gathered by the department. If tenants are to accumulate out of their own earnings enough money to make the initial pay ment on a farm, they must do so, it is said, by one or more of the following means: (1) make their farms earn higher than average incomes; (2) pay rent on their land at a rate lower than the prevailing mortgage rate of inter est in their neighborhood; (3) own part or all of their operating capital when they become tenants; (4> live in most cases on less than $600 a year in ad dition to what the farm supplies in kind; (6) keep production costs down by employing the members of the family without wages. Employing family labor without wages, say the depart ment economists, is a possibility of considerable importance to the intend ing purchaser. Studies of labor con tributed by members of farm families show that over a series of years such labor had an average valuation of $211 on a group of 60 Wisconsin farms. This was 21 percent of the expenses of these farms.* In calculating farm incomes, a deduction is usually made for the un paid labor of the farm family. It rep resents a return which is not included in rent, interest on the investment or payment for the services of the farm operator himself. Where the tenant has no unpaid labor from which to in crease his margin of return over neces sary expenditures, he carries an addi tional handicap! in his struggle to be come a farm owner.—Country Life Bulletin. A CORRECTION In the May 21 issue of the News Let ter the value of rural school property for Gaston County was reported at $80,000. The value should have been $800,000. The total value of all school property in Gaston in 1923 was $1,472,- 000, representing an investment of $24.38 per inhabitant. Gaston ranks eleventh in investment in public school property per inhabitant. TAXABLE WEALTH PER INHABITANT And Aggregate County Tax Rates for 1923 In the following table the counties are ranked according, to the aggregate of property listed for taxation per inhabitant for the year 1923. The accom panying column shows the aggregate county tax rate in each county. Durham leads with $1930 of wealth listed for taxation per inhabitant, and Wilkes comes last with $465. State total of property listed for taxation $2,684,012,120 or an average of $988 per inhabitant. Forsyth, the richest county in aggregate wealth, has the lowest county tax rate, 65 cents on the $100. Clay, the second poorest county in wealth, has the highest aggregate county tax rate, $2.26. No account is taken of special local district assessments. The average aggregate rate for all the counties is ap proximately $1.15. The table is based on information as reported by the State Commissioner of Revenue and the Registers of Deeds of the respective counties. S. H. Hobbs, Jr. Department of Rural Social Economics, University of North Carolina Rank County Aggregate Aggregate Rank County Aggregate Aggregate Tax Wealth County Tax Wealth County Per Inhab. Tax Rate Per Inhab. Tax Rate 1 Durham ...$1930 $ .92 60 Haywood . $824 $1.35 2 Guilford ... 1766 l.OOt 62 Cumberland . 814 1.38 2 Forsyth ........ . .. 1766 .65 63 Harnett . 808. .83 4 Buncombe ... 1676 .80 63 Jackson . 808 1.49 6 Mecklenburg ... ... 1582 .87 65 Surry . 802 1.22 6 Gaston ... 1400 1.00 66 Carteret .. 797 1.60 7 New Hanover... ... 1247 1.26 67 Greene .. 796 1.61 8 McDowell ... 1197 1.00 68 Granville . 782 1.30 9 Rowan ... 1183 .86 69 Tyrrell . 781 1.18 10 Wilson ... 1177 1.26 60 Pender .. 770 1.25 11 Scotland ... 1160 .97 61 Martin .. 766 1.00 12 Richmond ... 1133 1.10 62 Robeson .. 752 .94 13 Iredell ... 1116 .88 63 Pamlico .. 761 1.26* 14 Pasquotank ... 1093 1.03 64 Onslow . 760 1.26 15 Cabarrus ... 1083 .96 65 Washington .. 747 1.17 16 Catawba ... 1068 .81 66 Anson . 740 1.00 17 Wake ... 1064 .86 67 Perquimans . 736 1.60 17 Wayne .... 1064 .96 68 Nash .. 733 1.10 19 Moore ... 1063 1.10 69 Polk .. 714 1.66 20 Pitt ... 1060 1.00 70 Gates .. 708 .75 21 Alamance ... 1032 1.37 71 Jones .. 706 1.15 22 Cleveland ... 997 .76 72 Currituck . 696 1.16 23 Henderson ... 995 1.70 73 Columbus .1.. 688 1.08 24 Montgomery.... ... 992 1.20 74 Burke . 686 1.10 25 Rutherford ... 982 .88 76 Camden .. 685 1.36 26 Stanly .... 979 1.00 76 Bladen .. 681 1.20 27 Craven ... 976 1.26 77 Alexander .. 676 1.44 28 Graham ... 963 1.09 77 Union .. 676 1.45 29 Chowan ... 961 .68 79 Hertford .. 674 1.26 30 Swain ... 961 1.39 80 Warren .. 661 .75 31 Beaufort ... 960 1.28 81 Randolph .. 646 1.00 32 Vance ... 946 .93 82 Northampton .. 639 1.50 33 Davie ... 942 1.02 83 Bertie .. 632 1.36 34 Lenoir ... 922 1.76 84 Stokes .. 627 1.48 36 Rockingham .... .... 920 1.36 86 Sampson .. 612 1.20 86 Davidson ... 906 1.00 86 Chatham .. 609 1.22 37 Orange ... 903 1.10 87 Watauga ... 698 .90 38 Lee ... 897 1.00 88 Brunswick .. 566 .97 39 Hyde ... 896 1.22 89 Caswell ... 661 1.70 40 Caldwell ... 886 1.26 89 Cherokee .. 661 1.00 41 Transylvania ... ... 881 1.32 91 Yadkin .. 552 1.33 42 Alleghany ... 873 .90 92 Franklin ... 546 1.15 43 Person ... 866 1.08 93 Yancey .. 644 1.23 44 Lincoln ... 863 1.26 94 Madison .. 635 1.76 45 Hoke ... 867 .87 96 Avery .. 630 1.72 46 Halifax ... 848 1.32 96 Ashe .. 519 1.34 47 Johnston 847 .90 97 Clay .. 613 2.26 48 Mitchell .... 844 1.00 98 Dare .. 471 1.68 49 Edgecombe .... 835 .71 99 Macon .. 468 1.10 50 Duplin ... 824 1.04 100 Wilkes .. 466 1.48 i The county rate for Guilford is $1.00 outside and $ .75 inside the cities. ♦ Rate for 1921.