i
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.
SEPTEMBER 9, 1925
CHAPEL HILL, N C.
THE UNIVERSITY OF NORTH CAROLINA PRESS
VOL. XL NO. 43
Etlhorial Boardt IS. C. Branson, S. BT. Hobbs, Jr., L. R. Wilson. E. W. Knight. D. D. Carroll, J. B. Bullitt. H. W. Odum.
Entered as second-class matter November 14, 1914, at the PostofFice at Chapel Hill, N. C., under the act of August 24. 1912
PROGRAM FOR TAX STUDY CLUBS
XI. STATE TAXATION IN NORTH CAROLINA
A. General Fund
Schedule A. Inheritance Tax.
Amount
Class A
percent
Class B
percent
Class C
percent
$10,000 or less
3
7
Excess over $10,000 and up to $26,000
4
8
First $26,000 above exemption
1
Excess over $26,000 and up to $50,000
2
6
9
Excess over $50,000 and up to $100,000
■ 2
6
10
Excess over $100,000 and up to $260,000
3
8
12
Excess over $260,000 and up to $600,000
4
10
14
Excess over $60Q,000 and up to $1,000,000
6
12
16
Excess over $1,000,000
6
12
16
Clas§ A includes children, husband or wife, son-in-law, daughter-in-law,
stepchild, adopted child, grandchild if its parents are dead. Exemptions,
widows $10,000, minor child $6,000, and all others $2,000. Class 13 includes
brother, sister, aunt, uncle, nephew, niece. Class C, all others.
Schedule B. Business or License Tax.
Imposed as a license tax for the privilege of carrying on certain business
es: coal dealer, plumber, pawnbroker, peddler, stockbroker, undertaker,
physician, lawyer, dentist, operate theatre, moving-picture house, circus,
restaurant, hotel, laundry, cigar store, building and loan association, insur
ance company, cigarette and cigar dealer and manufacturer, gara^ etc.
Schedule C. Privilege or Franchise Taxes.
Privilege tax on railroads, chair and sleeping-car companies, telephone
companies, and other public service companies.
Franchise tax on corporations.
Marriage Licenses.
Tax on seal affixed by officers.
Schedule D. Income Tax.
Individuals;
$ 2,600
percent
$ 5,000
2
$ 7,500
2 3-4
$10,000
$15,000
6
On the excess over exemptions up to
On the excess above $ 2,500 and up to
On the excess above $ 6,000 and up to
On the excess above $ 7,600 and up to
On the excess above $ 10,000 and up to
On the excess over $16,000
Exemptions; Single person $1,000, man and wife $2,000, widow or
widower with minor child $2,000, each additional dependent $200.
Corporations:
4^ of net income.
B. Highway Fund
Gasoline tax of four cents a gallon.
Automobile license tax.
Tax on earnings of motor bus dines.
B. Explanation
Since this series of tax studies is de
signed primarily for the study of local
taxation there will be only this one
outline devoted to State taxation and
one following devoted to Federal tax
ation. Therefore, it will be possible to
consider only those features of each
which are of a general nature or which
affect the average citizen.
Everyone knows that the expenses
. of State government have been steadi
ly mounting while, at the same time,
the "use of the general property tax
for state purposes has been discon
tinued. Consequently new sources of
revenue have had to be devised. In
1923 a revenue act was passed which
was thought to be adequate for sever
al years to come, but by 1926 a deficit
had accumulated so that anew revenue
bill had to be drawn. North Carolina
has now definitely gone on a budget
basis, and the present revenue act is
designed to meet the budget appropria
tions for the next biennial period.
The state government now costs about
thirteen million dollars a year. This
total includes both the appropriations
for maintenance, and all sinking-fund
and interest costs. The cost is divided
among the following agencies, and for
the following purposes: legislative,
judiciary, administrative, educational
institutions, charitable institutions,
correctional institutions, public schools,
pensions, miscellaneous state aid, and
miscellaneous bonds. The revenue is
raised from five main sources, namely,
income tax, inheritance tax, license
tax, franchise tax, and the earnings of
the various departments and agencies
of the state.
Highway Fund
The state highway fund is entirely
distinct from the general fund. The
gasoline tax, the automobile license
tax, and the tax on the earnings of
motor bus lines are its sources of reve
nue. The fund may be swelled tempo
rarily by loans from those counties
which desire their portion of state
highway now and are willing to ad
vance the money. The fund is also
supplemented by a certain amount of
federal aid. Bonds have been sold to
the amount of 65 million dollars and a
further bond issue of 20 million dollars
was authorized by the last General
Assembly. The revenues mentioned
above are expected to be sufficient ’to
maintain the state highway system and
retire the bonds within the life-time of
the highways.
The state has other revenues of con
siderable importance among which are
collections made by the various depart
ments and agencies, corporation taxes,
sale of trade marks, sale of land grants,
tax on seals, fees, etc. For the year
ending June 30, 1924, the commissioner
of Revenue collected $6,560,946.42.
Large collections were made by other
departments and agencies, notably the
Commissioner of Agriculture^ and the
Insurance Commissioner. The Secretary
of State, who.at that time was respon
sible for the collecting of the automo
bile license and gasoline taxes, collected
$7,386,291.27, or considerably more than
was collected by the Commissioner of
Revenue.
C. Questions
How much does your county pay in
state income taxes?
When are income taxes payable? sec.
403, 600.*
What is the penalty for failure to
pay income tax? sec. 600.
When do automobile licenses expire?
When do business or privilege
licenses expire? sec. 22.
What are the duties of the Clerk of
the Superior Court in connection with
the collection of inheritance taxes? sec.
14a.
May a city or county levy a franchise
tax? sec. 89(3).
May a county levy a license tax? sec.
101.
What are the duties of the Clerk of
the Superior Court in connection with
the collection of license taxes? Amend
ment to Revenue Act, p. 94.
What is the state tax on a marriage
license? sec. 90.
What is the county tax on a marriage
license? sec. 90.
What proportion of the citizens pay
state taxes?
Ought the burden of state govern
ment to be more widely distributed?
Are you familiar with the new bud
get law?
Have you studied the 1926 budget
appropriation?
What is the proposed mileage of the
State Highway System? What mile
age has been completed?
Should the school equalization fund
be increased?
KNOW NORTH CAROLINA
N. C. Club Year-BooK
The new 1924-25 Year-Book of the
North Carolina Club is just oft' the
press and ready for distribution to
those who forward their requests to
the Department of -Rural Social-
Economics, University of North Ca
rolina. They go free to North Caro
linians for the asking; a charge of
seventy-five cents is made to those
outside of the state.
The Year-Book contains fourteen
chapters as follows: The Consoli
dated Country School as a Civic
Center, by Paul W. Wager; Local
Responsibility for Local Social Prob
lems, by Miss Elizabeth Branson;
Story of the North Carolina Club,
by Reed Kitchin; Points of Attack
in Our Oommonwealthls Progress,
by Josiah W. Bailey; Business Effi
ciency in County Government, by
Paul W. Wager; The Basis of Tax
ing Land Values, by B. B. Wright;
Freight Rate Discrimination Against
North Carolina, by G. K. Cave-
naugb; Ports and Waterways for
North Carolina, by W. T. Couch;
Non-Voting Democracies, by Miss
Ruth Hunter; Freight Traffic with
the Upper Middle West, by R. B.
Eutsler; Should North Carolina Aid
the Landless Farmer? by Reed
Kitchin; Your Railroads and the Men
Who Run Them, by John L. Cobbs,
Jr.; Tax Problems in North Caro
lina, by C. G. Grady; Does North
Carolina Read? by Orlando Stone.
Does the State need more revenue?
How may it be raised? Should the
state property tax be restored?
♦Section numbers refer to 1925 Reve
nue Act.
D. Sources of Information
North Carolina Mannal, 1926.
Revenue Act,il926.
Report of Commissioner of Revenue,
1924.
Statements of Highway Commission.
State Auditor’s Report for 1924.
FORTY-SECOND IN SCHOOLS
The table which appears elsewhere
shows that North Carolina ranked
forty-second in public education in 1922.
The index number on the basis of
which the states are ranked is arrived
at by combining the rank of the states
in both academic and financial ratings,
according to the well-known method
devised by Dr. Leonard P. Ayres. The
rank is on the basis of (1) average
length of term in days, (2) percent of
total enrollment in high school, (3)
average value of school property per
child, and (4) current expense per
child enrolled in school.
Average Term in Days
The average length of term for all
the states was 164 school days. Rhode
Island had the longest term, 196 days,
and South Carolina the shortest. 111
days. The average for North Carolina
was 139 days and our rank among the
states, including the District of Colum
bia, was forty-second. Our average
term is 26 days below the average for
the states of the Union.
Enrolled in High School
In the percent of all children en
rolled in school enrolled in high school
North Carolina ranked forty-eighth.
Only 6.2. percent of the children en
rolled in school in the state were enrolled
in high school, and only South Carolina
with five percent ranked below our
state. In California 27.1 percent of
all children enrolled in school are high-
school pupils. The United States aver
age is 12.3 percent, or nearly two-and-
a-half times the average for North
Carolina. North Carolina’s high schools
are now turning out graduates by the
thousands, where ten years ago they
were counted by the hundreds, but in
high-school enrollment only one state
is below us, or so three years ago.
Value of School Property
In value of school property per child
enrolled North Carolina ranked forty-
third with forty-seven dollars invested
in school property for each child in
school. The average investment in
school property per child enrolled
for all the states was $129, or more
than two-and-one-half times the aver
age for North Carolina. In 24 states
the average investment is more than
$160 per child enrolled. Our rank in
this respect seems rather low in
view of the fact that we now have 60
times as much school property as we
had in 1900. Manifestly other states
have been investing in school houses.
Current Expenses
The fourth item on which the states
are ranked concerns current or operat
ing expenses per child enrolled. In
this respect North Carolina ranked
forty-second, spending an average of
$21.62 per child enrolled in school. The
average for all the states was $54.85,
or more than two-and-a-half times the
average for North Carolina. Nevada
spent $106.76 per child enrolled. Georgia
spent $16.14 per child and ranked last
of all the states in this respect.
Not Discouraging
The above information may come as a
distinct shock to those of us who may
have been blinded by the recent prog
ress of the state along educational lines-
North Carolina has made progress, very
rapid progress, even though our present
status and rank are not so praise
worthy.
In 1910 we ranked last of all the
states in public education. Slowly but
surely we had displaced seven states,
all southern, by 1922, and by the pres
ent time probably two iffher states
have bowed their heads to North Caro
lina. If true, there are still five south
ern states that rank ahead of us in
public education.
The Explanation
The main explanation for our un
seemly low rank lies in the fact that
North Carolina is predominantly a
rural state, more rural than all the
other states except four, and as every
one knows, rural schools in North Caro
lina, while they have made progress,
grade far below urban schools. The
essential contrasts between urban and
rural schools in North Carolina were re
ported in a recent issue of the News
Letter. The educational problem of
this state is the problem of rural edu
cation. Our city schools will compare
favorably with the average for all
the states, but our rural schools rank
far below our urban schools. Since we
are predominantly a rural state, we
will never attain a high rank in public
education until rural schools compare
favorably with urban schools. Progress
in rural education lags in North Caro
lina. Give the country child the op
portunities the urban child now enjoys
and North Carolina will show up well
among the states of the Union in pub
lic education. —S. H. H., Jr,
NORTH CAROLINA SURPASSES
In the discussion of the relative
merits of North Carolina and Florida
as progressive states, Natural Re
sources adds the following interesting
matter:
It is five years since the United
States, the war over and industry in
possession of a military discharge,
reached a too-sanguine peak of do
mestic production resulting in a re
action and readjustment that had the
color of a great industrial depression.
Recovery, according to census
figures having to do with manufactur
ing interests producing a volume of
production of $5,000, or more a year,
was practically complete at the end of
1923. In that year, the last for which
figures are available, the total pro
duction was $60,450,000,000, only 2
percent less than the amount charac
terizing the year of post-war ex
pansion But as compared with 1921,
the year of depression, the increase in
production in 1923 was 38.6 percent,
and the total as compared with 1914
showed an increase of 162 percent over
the value of manufactures produced in
1914. It is therefore certain that
when figures are available fur the year
1924, it will be shown that industry has
reached a level higher than that at
tained when the whole war-riven world
was looking to the United States for
the goods immediately needed to repair
the damage.
The South’s share of this revival
shows 1923 manufactured products to
have had a value of $9,461,688,000, an
increase of 37.6 percent over 192L and
68 percent greater than the values of
products produced in the great manu
facturing states of New England. And
in this section, North Carolina, with a
production of $961,910,699, an increase
of 43.1 percent over that of 1921, leads
all southern states with tlie exception
of Missouri and Texas.
Just now it is the fashion to point
to the unexampled prosperity of
Florida, its growth and even the sup
posed menace its pulling power to
immigrants and capital creates for the
other states of the south and east. It
has been published, for instance, that
40,000 people have recently left Atlan
ta alone for the state whose advertised
prosperity is disconcerting even the
complacency of southern California. It
may be well for North Carolinians to
look at the comparative facts as given
in the census regarding manufactures.
Florida’s manufactured products, for in
stance, were in 1923 $188,268,384 in value.
North Carolina’s were $979,667,812.
Florida manufacturers employed 66,038
wage-earners; North Carolina 173,687.
Florida pa'd in wages $52,366,618;
North Carolina wage-earners received
$127,643,821. Add to these advantages
in industry and profitable employment
an even greater agricultural supremacy
and the challenge as a resort center
now being emphasized, especially in
Western North Carolina, and the
“boom” in Florida leaves this state
interested only as it suggests its own
greater possibilities.—Durham Herald.
HOW STATES RANK IN PUBLIC SCHOOLS
For the Year Ending With 1922
The following table, from State School Facts, Vol. 1, No. 24, prepared by
Dr. Frank M. Phillips, shows the educational ranking of the states of the
Union for the year 1922. The index figures cover four items: (1) average
length of term in days, (2) percent total enrollment in high school, (3) average
value of school property per child enrolled, and (4) current expense per child
enrolled.
The index number for California, which state stands first, is 117.65. Missis
sippi is last with an index of 40.09. North Carolina is 42nd with an index of
47.69, only 7.60 points ahead of the state ranking lowest, and 26.41 points below
the U. S. average which is 74.60.
North Carolina ranked 48th in 1910:
1922.
46th in 1918; 43rd in 1920;
and 42nd in
Rank State
Index
Number
Rank State
Index
Number
1
California
. 117.65
26
Rhode Island
77.98
TsJ’pw .Tprspy
97,07
27
Pprinsylvanin
3
Ohio - ■ ■ ■
96.98
28
North Dakota
73.33
4
Indiana
96.63
29
New Hampshire ...
71.04
6
Washington
96.3]
30
Delaware
70.73
6
New York
94.02
31
Missouri
69.48
7
Nevada
93.99
32
Vermont
68.60
8
Michigan
92.17
33
Maryland
68.06
9
Montana
91.08
34
New Mexico
67.64
10
Arizona
90.76
36
Maine
65.46
11
Wyoming
86.66
36
Oklahoma
64.21
12
Minnesota
86.08
37
Texas
67.18
13
Nebraska
86.47
38
West Virginia
56.91
14
Massachusetts
86.24
89
Virginia
64.66
16
Iowa
84.86
40
Louisiana
54.43
16
Illinois
84.31
4i
Florida
63.79
17
District of Columbia.
83.98
42
North Carolina
47.59
18
19
Utah,
83.15
43
Tpnnp.sspp.
44 77
Colorado
83.02
44
Arkansas
44.67
20
SouthjDakota
82.91
46
Kentucky
43.66
21
Idaho
81.79
46
Alabama
42.94
22
Connecticut
81.76
47
Georgia
42.09
23
Oregon
79.71
48
South Carolina
41.12
24
25
Kansas
Wisconsin
78.67
. 78.38
49
Mississippi
40.09