The news in this publi
cation is released for the j
press on receipt.
The UNiVERSSTY OF NORTH CAROLINA
NEWS LETTER
I Published Weekly by the
University of North Caro-
i lina for the University Ex-
1 tension Division.
AUGUST 24, 1927
CHAPEL HILL, N. C.
THE U.NIVERSITY OF NORTH CAROLINA PRESS
VOL. XIII, No. 41
Editorial lioard: E. C. Branson, S. H. Hobbs. Jr.. L. R. Wilson. E. W. Knight. D. D. Carroll. J. B. Bullitt. H, W. Odui
Entered as second-class matter November 14. 1914. at the Postofficc at Chapel Hill, N. C.. under the act of August 24. 1912.
PERSONAL INCOME TAX PAYERS
FEDERAL INCOME TAXES ANOTHER INTERPRETATION
The federal government realizes
three-fourths of a billion dollars a
year from personal income taxes, but
the number of people who pay federal
income taxes, is relatively few, and
the majority of payers pay only a
nominal sum. Slightly over four
million returns were made for the
year 1926. Less than two million were
subject to a tax after the exemptions
were deducted. The majority of those
who paid a tax, paid only a few dollars.
In the rural states the percentage of
people who made returns was partic
ularly small.
In only five states did a smaller
proportion of the people, file returns
than was the case in North Carolina.
In this state only 1.38 percent of the
population filed returns and only 0.65
percent actually paid a tax. When
the states are ranked on this basis
Nevada leads with eight percent of its
population tiling returns, or about one-
third of the families. California fol
lows with 7.30 percent of its people
having incomes sufficiently ^large to
require the filing of returns. New
York, Florida, Massachusetts and Illi
nois follow, in the order named.
Few Returns in South
Relatively fewer peopfe file returns
in South Carolina than in any other
state, the percentage being 0.87.
Mississippi, with a percentage of 0.96
is second from the bottom. These are
the only two states where less than
one percent of the people file federal
income tax returns.
The average for the United States
is 3.60 of the inhabitants filing returns.
There are eighteen states above the
average and thirty below. Florida and
Maryland are the only Southern states
in the upper group. All of the ten
lowest states are Southern. It is not
surprising that agricultural states
should have fewer taxable incomes
than industrial states, but it is a
little embarrassing that the ten lowest
places should all be held by Southern
states. The agricultural states of the
West, with less industry than the
South,'rank above the Southern states
in income tax payers. The cash crop
agriculture of the South does not
produce many income tax payers.
North Carolina is sometimes com
pared to California in climate, resort
possibilities, and variety of output.
North Carolina has been settled three
times as long as California, yet Cali
fornia has in proportion to its popula
tion six times as many people who file
income tax returns as North Carolina,
and nearly nine times; as many propor-
ionately who pay income taxes. A
relatively large number of income tax
payers is^an evidence of wide diffusion
of wealth, and therefore a desirable
situation.
Tax per Inhabitant
The parallel column in the table shows
the amount of federal income taxes
paid in each state reduced to a per in
habitant basis. It will be noticed that
New York and Florida lead with piore
than twenty-two dollars per inhabitant
each. No other state approaches this
figure, the next highest being Delaware
which pays $11.68 per inhabitant.
Thirty-six of the states pay less than
the United States average of $6.35, and
twenty-three of the stat^ pay less
than an average of two dollars per
inhabitant.
South Carolina also ranks at the
bottom in this particular, paying in
personal income taxes an average of
only 24 cents per inhabitant. The next
lowest places are held by North Dakota
and South Dakota, with contributions
of twenty-five -and twenty-eight cents
per inhabitant respectively. North
Carolina pays $1.13 per inhabitant.
Although more than two hundred mil
lion dollars of federal taxes are col
lected in this state, only $3,178,767 of
this is revenue from taxes ofi personal
incomes. The excise tax on tobacco
and the tax on the incomes of corpora
tions account for the rest of the huge
total. When . ranked on the basis of
personal income taxes per inhabitant,
North Carolina ranks thirty-eighth.
This is a better indication of its rel
ative prosperity than the fact that it is
the fourth state in federal tax col
lections.—Paul W. Wager.
S,ince 1924 the income of'the United
States Government has been steadily
mounting and the Internal Revenue
Department’s figures for the fiscal year
just closed show that the collections in
the South were greatly in excess of
1926 receipts, while the rest of the
country outside of the South paid less
into the Treasury,
From the Southern states alone the
Federal Government collected during
the fiscal year 1927 $638,284,000, of
which $340,86^,000 was from income
taxes. This was an increase compared
with 1926 of $61,928,000 in total federal
tax receipts, $46,168,000 of which was
from income tax collections in the
South, Of striking significance is the
fact that while the South paid nearly
$52,000,000 more into the federal
Treasury in total taxes' in 1927 than in
1926, federal tax collections in the
rest of the country outside of the
South during this period were approxi
mately $22,000,000 less.
North Carolina led the South with a
a total payment to the Federal Govern
ment of $206,648,000, as compared with
a combined total for all of the New
England states of $181,346,000 and
a combined total for the Pacific
Coast states of $160,231,000. Ohio,
with its vast wealth, paid in to the
Federal Government $147,428,000, or
less than North Carolina by $58,000,000.
The North Carolina payments to the
Federal Government exceeded those of
New Jersey by $92,000,000. Michigan,
with its enormous automobile business
paid $197,993,000, but even that was
less by $8,000,000 than North Caro
lina’s contribution to the Federal Treas
ury.
Virginia came second on the Southern
list with $79,160,000, which was $38,-
000,000 more than Wisconsin paid in
federal taxes and $43,000,000 more
than Indiana. Iowa paid only $12,666,-
000, or less than one-sixth of what
Virginia paid. Massachusetts paid
$114,761,000, or but little more than
one-half of North Carolina’s payments.
Florida, despite all the criticisms that)
have been made against that state,
paid in $44,484,000, which was $8,000,-
000 more than Indiana, $32,000,000
more than Iowa, $24,000,000 more than
Kansas, $16,000,000 more than Minne
sota, seven times as much as Nebraska,
more than twelve times as much as
New Hampshire, more than three
times as much as Rhode Island, and
nearly $4,000,000 more than Wisconsin.
Missouri, paid $10,301,000, or nearly
$4,000,000 in excess of the combined
payments of Connecticut, Maine, New
Hampshire, Rhode Island and Vermont.
Georgia paid $1,600,000 more than
lovva, $7,500,000 more than Wisconsin,
$16,600,000 more than Minnesota, and
$8,600,000 more than Indiana. Ken
tucky paid three times as much as
Iowa and $7,600,000 more than Kan
sas. Maryland exceeded Connecticut
and Maine combined by over $4,000,000. I
These comparisons are not made in
any disparagement of other states or in
vainglorious enthusiasm for tbe'^South,
but merely to show what this section—
at one time discredited and for many
years, receiving less cooperation from
the Federal Government than it de-
served—is doing in the way of material
advancement as expressed through its
payments of federal taxes.—Manu
facturers Record.
WOULD SAVE MILLIONS
The bonded debt of North Caro
lina-state, county, municipal, and
special tax districts—is more than
five hundred million dollars, accord
ing to 'A. J. Maxwell, Chairman of
the State Tax Commission. The
exact amount of the debt is not
known as the data filed with the
state anditor are incomplete and
often far from accurate. Many
counties and special tax districts
do not know the amount of debt
that has been incurred.
According to Mr. Maxwell, the*
weighted average interest rate on
county, municipal, and local district
debt is 6.320 percent, which is much
too high considering the safety of
the investment and the fact that
the bonds are tax free, or practical
ly so.
A large part of our public debt
has been incurre^ by officials with
little or no' experience in handling
bofid sales. T^e issuing unit is often
too small, or too litile is known
about it by the bond purchasers.
The amount of the issue is often
too small to sell at a low rate. Tlie
amount of debt in many counties
and towns is now far beyond the
limit which the legislature has set
by statutory enactment. Often
when interest is due no funds are
available with which to pay it.
Probably worst of all is the fact
that many counties and muni
cipalities are not accumulating
funds with which to retire the bonds
when they shall come due. The
debt will be refunded. It is quite
common to apply income from bond
sales to pay current expenses.
These and many other weaknesses
of the existing order will be reme
died if the state adopts the most
excellent suggestion of Mr. Max
well to have a state bond and sink
ing fund commission as the clearing
house and controlling body to pass
upon all bond issues, to negotiate
sales, and to look after interest
payments, sinking funds and other
essential matters. The necessity
for such a commission is beyond
debate. It should be provided at
the earliest possible moment.
4. STATE BOARDS OF EDUCATION
According to authorities on school
administration, the state board of
education, like the city board, should
be a lay board representing the larger
educational policies of the public,
delegating the professional side of
education and the administration of
its general policies to its appointed
executive official, the state super
intendent of public instruction or
commissioner of education, and to the
heads of the several higher educational
institutions, if any, under its super
vision. The board should be composed
of from five to nine members appointed
by the governor by and with the
consent of the senate, the term of
office to be five to seven years, one
member to retire each year, or two
each biennial period, thus perpetuating
the board’s policies and giving it stability
and 3 degree of permanency. Vacan
cies should be filled by the governor.
The appointment should serve without
remuneration except for a reasonable
per diem and actual traveling and other
necessary expenses. The maximum
number of days for which such per diem
may be paid should be fixed by law.
Powers of Board
The general powers of the state
board should include the following,
keeping in mind that the state board
is a legislative body, the state super
intendent of public instruction or the
commissioner of education acting as
its executive officer;
1. To know the educational needs
of the state and to determine its educa
tional policies so far as authority is
conferred upon it to do so by the
constitution or by acts of the legisla
ture.
2. To have ' general oversight and
control of the public-school system of
the state as may be determined by law,
and of other schools in so far aa
charged by specific legislation.
3. To select the chief state school
officer, who becomes its executive
head; to determine his powers and
duties; and the function of the state
department of education under his
direction.
4. To adopt the necessary* regula
tions’ and set up standards for educa
tion in the state relative to compulsory
education, school buildings, schoiol equip
ment, courses of study, qualifications
of teachers, physical education, medical
inspection of children, school records
1 and reports, etc.
5. To have general control over
such educational institutions as the
state schools for the deaf and blind,
industrial reform schools for boys and
girls, and educational work in state
reformatories and penitentiaries, and
state hospitals.
6. To have general regulatory control
of or to establish cooperative relations
with all teacher-training institutions
conducted by the state.
7. To act as a board of control for
the state library and historical col
lections.—U. S. Bureau of Education.
TEN PERCENT WASTED
More than half a billion dollars, or
more than one-tenth of the total of
expenditures of local governments in
the United States, represents waste,
and could be saved each year without
diminution, either in quality or quan
tity, of governmental services now
rendered, according to the National
Industrial Conference Board, 247 Park
Avenue. New York. The Conference
Board gives this figure as its minimum
estimate of the amount of the public s
money which is dissipated annually
through faulty government organiza
tion, lack of coordination, inefficient
budget policies and, in some cases,
sheer extravagance.
There are, as revealed by an investi
gation made by the Conference Board,
about three-quarters of a million separ-
I ate local taxing and spending units in
the United States, which operate in
dependently and whose aggregate ex
penditures have risen ffom $1,844,000,-
000 in 1913 to $5,829,000,000 in 1926, or
from $19.10 to $60.62 per capita of
population. Constitutional or statutory
restrictions on tax rates or the amount
of bonded indebtedness that may be
incurred, the Board finds, have fre
quently proved ineffective. vVhere the
tax rates alone are restricted by law,
the law often is nullified by increasing
the bonded indebtedness; where both
bonded indebtedness and tax rates are
limited, increase in floating indebted
ness has been resorted to. Definite
results, however, the Conference
Board, declares, have been achieved
where the details of tax levying and
borrowing, and in some cases even of
expenditures, are subject to the super
vision and control of central bodies;
such as county boards in Oregon, Okla
homa and Ohio, or state commissions,
as in Indiana, New Mexico and Massa
chusetts.
Such centralized control of city,
town, country, village, school district,
park district and other local govern
ment finances, already the object of
experimentation in a number of states,
is the most significant development in
the evolution of a general policy forf
regulating and integrating the here
tofore largely haphazard procedure of
raising and spending public funds, in
the view of the Conference Board. The
Board bases its belief on the results of
detailed studies of the fiscal problems
in a number of individual states, par
ticularly those of New Mexico, Indiana,
California, Illinois, Delaware and New
York. "Wherever such detailed studies
are made in states which have no system
of centralized control—and most of the
states have none—it is found that mil
lions can be saved annually by better
organization and improved budget
policies without curtailment of the
functions or services rendered by the
respective governments.
HOME BEAUTIFICATION
Forsyth county has recently staged
a home beautification campaign, which
has apparently been highly successful.
The movement was launched and en
couraged by the home demonstration
agent of the county. Prizes were
awarded to the winners in the contest.
In commenting on the enterprise the
Winston-Salem Journal says, “The
interest in home improvement that
exists in the county is shown by the
large number of rural residents who
have entered the contest.
“The feature of improvement empha
sized in this contest is the care and
adornment of the grounds around the
j homes. Some very fine results have been
] achieved in this contest. The spirit of
the enterprise has radiated throughout
the county and many a rural family
has taken an added interest in having
prettier home surroundings though not
entering the formal contest. That is
always the way when a laudable move
ment is started. It has a wider in
fluence than may be expected or ap
parent at first. j
“Substantial prizes are offered the
first five winners. But as is always
the case, the gains aside from any
prize won are the more enduring and
valuable. A yard around a home that
is of prize-winning character is worth
much more than the handsomest prize
that might be attained.”
FEDERAL INCOME TAXES FOR YEAR 1925
Percent Filing Returns, and Per Capita Tax l
In the following table based on Statistics of Income, Federal Treasury
Department, the states are ranked according to the percent of the population
which filed federal income tax returns for the year 1926. The number in each
state which actually paid taxes is not given, i but is usually considerably less
than half of the number of returns.
In the parallel column the amount of federal income taxes paid in each
state is reduced to a per capita basis.
These statistics deal only with individual income taxes; they do not include
the income taxes paid by corporati-ms. U. S. average, 3.60 percent of the
population filed individual income tax returns, the average tax being $6.36 per
inhabitant.
For North Carolina only 1.38 percent of the population filed returns, the
the average tax being $1.13 per inhabitant.
Paul W'. Wager
Department of Rural Social-Economics, University of North Carolina
Percent
Percent
of popu-
Tax paid
' of
popu-
T.ix paid
Rank State
Intion
per ir-
Rank State laiion
per in-
fihnij
habitant
filing
habitant
returns
returns
1
Nevada
8.00.
$2.31
26
Vermont
.2.71.
2.60
2
California ...
7.30.
8.88
26
Nebraska
.2.60.
1.26
3
New York,...
6.74.
22.59
27
Indiana
2.69.
2.43
4
Florida
6.03.
22.04
28
Idaho
.2.34.
34
5
Massachusetts 6.35.
9.91
29
South Dakota ...
.2.51.
28
6
Illinois
5.04.
9.12
30
Maine
.2.47.
3.46
7
Washington .
4.99.
1.74
31
Arizona
..2.36.
1.27
8
Connecticut .
4.75.
8.61
32
West Virginia...
.2.19.
1.30
9
Wyoming
4.61.
1.12
33
Louisiana
.2,14.
2.03
10
Michigan
4.40.
7.76
34
Texas
..2.10.
1.89
11
Rhode Island
4.29.
8.67
36
Iowa
.2.08.
1.28
12
Maryland
4.24
7.46
36
Kansas
.1.89.
1.23
13
New Jersey .
4.19
9.00
37
New Mexico
..1.88.
46
14
Pennsylvania
3.98.
7.74
38
North Dakota ..
-.1.83.
25
16
Wisconsin....
3.88.
2.39
39
Oklahoma
..1.78.
3.01
16
Delaware
3.84.
11.68
40
Virginia
..1.51.
1.20
17
Oregon
3.77.
2.07
41
Kentucky
..1.49.
1.32
18
New Hampshire ..3.63.
2.70
42
Tennessee
-.1.42.
1.27
19
Ohio
3.47.
4.68
43
North Carolina....
1.38.
1.13
20
Colorado
3.44,.
2.73
44
Georgia
..1.21.
1.14
21
Utah
3.19.
1.31
46
Arkansas
.1.10.
76
22
Missouri
3.13 .
4.10
46
Alabama
.1.06.
93
23
Montana
2.86.
86
47
Mississippi
. .95.
66
24
Minnesota....
2.73.
2.35
43
South Carolina..
. 87.
24