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Governor Cooper's Ann Message to the Genera Assembly. Gentlemen of the General Assei In my last message I said: "The economic depression \ exists throughout the country the world at this time, real an< parer.t, can not be looked upon 1 ly. We have now recovered suffic ly from the shock of war to be ab determine approximately the c tions with which we have to Legislative programs and govern tal activities, as well as busi must be adjusted to meet cha conditions. Questions which u ordinary circumstances would b only secondary importance are demanding primary considerate we deal with the situation in a and statesmanlike manner, a g deal can be done to strengthen morale of the people and to stab the unsettled economic conditi This is no time for pessimism no time for wavering of faith or 1 tation. We must meet the issues w confront us with courage and ci dence. There is universal dissatis tion throughout the state with present levy on real and persi property. This dissatisfaction is ' founded, but I believe that we do always direct our criticism to the trouble. The per capita cost of { ernment in this state is not high comparison with other states, difficulty is that the tax is not tributed according to tax paying s ity." The past year has been, one of most trying since the Reconstrucl period following the Confedei war. It is not necessary to discuss many causes which have contribu to our present condition. The f is our whole economic system is i state of chaos. This condition is confined to South Carolina or to s particular section of our counl There has been no improvement the financial depression during year. On November 1, 1921, th "was uncollected, from taxes of 19 practically $1,250,000. Some chai in our tax system is imperative ? that change must be made during t session of the general assembly, i less we propose to make a backwi step. In my previous message I urf upon you the adoption of measu: which, in my opinion, would hi given substantial relief. The rei Justment which began more than year ago was not fully appr?ciai and few of us suspected it would suit in lowering our standard of 1 ing to such an extent that the mi of the actual requirements of a < cent and progressive life would difficult to pay. Burden on Agriculture Under our antiquated system taxation the cost of a relatively i expensive government and its ins .tutions so vital to the life of the pe pie falls heaviest as a rule on tho who are least able to pay; name! the agricultural element and t! owners of tangible property. Oi method of collecting revenue w never a well devised system, but this time its inequalities and iniqn ties are especially emphasized. W have adhered too long to a syste which requires those who need tl benefits of government most to bei too great a burden of taxation. Sout Carolina is predominantly an agr cultural state. All other business i dependent upon the production c our soil. When the farmer is pros jerous, business is good; there is n fear of bank failures and the ghasl ly spectre of bankruptcy is not see In the land. But when our farms fai -ito yield a profit the merchant is un able to dispose of his goods or col lect his accounts, the deposits in ou banks decrease and insolvency knocks at the door of us all. Any tax system which is nol based *on the principle of ability t: pay is fundamentally wrong and is . certain to be a continuous source ci irritation and injustice. If conditions "were different I would present to you several important recommendations. There are many measures I would like to see enacted, but every other question should be subordinated to the one paramount issue of revenue and taxation. We must determine whether or not this state will take Iber place among her sister states of 'this union by adopting a modern sys tem of collecting revenue to pay the necessary cost of government. The adoption of such a system, based up on the principle of ability to pay, will assure the continuity of our social and economic progress. Without its adoption the arrest of our develop ment is inevitable. I have in mind as our ultimate objective the total ab olition of the property tax as a source of government and the substitution of a tax on incomes, inheritances, pe troleum products, occupations, pro fessions, privileged licenses, luxuries and hydro-electric power. The re vision of our law relating to license? for domestic and foreign corporations with the view of increasing revenue from this source, is earnestly ui Income Tax. I wish to elaborate somewha the subject of a tax on inconn have found, somewhat to my surp that there is probably more op; tion to this particular tax than others recommended. The income is not only satisfactory in yiel revenue but it is collected dir? from the person whom it is intel to tax. Its yield is certain and is b upon tax paying ability. It mus borne in mind that the objectioi the present property tax as being just and oppressive can never a; to a tax of incomes. A property falls upon owners of tangible p erty and becomes a crushing bui when paid by a farmer who placed his faith, his labor and mc in a crop which fails to y;eld a pi or upon a merchant when he is able to dispose of his merchandisi a profit. It becomes exorbitant w it asks for payment upon prop? which has been a loss. The propc tax asks a contribution of a man "\ has worked for a year and b awarded with a deficit-debts inst of profirs. ( On the other hand, the income asks noihing of a man who has income; it exacts nothing of him v a small income. It requires noth of anyone unless his or her net come above all legitimate expense: adequate to support the taxpayer oidinary comfort. There is no du cation of burden or injustice in 'si a scheme. The income tax is lev on ability to pay from profits and : from principal, and it can not press the taxpayer as he is now f quently oppressed by the gene property tax. The administration an income tax law should not more difficult in South Carolina til it is in other states, where it has be found practicable and satisfactory I am sure the federal government v ?cooperate with the state in supplyi certain data which will remove ma of the .administrative difficulties, trust and most earnestly urge tl you will enact at this session the come tax bill now on the house cale dar, or substitute for it a bill bas -upon the federal law. It has be conservatively estimated that a mc erate tax on incomes will raise in tl state from $1,000,000 to $2,000,0 per annum. Inheritance Tax. A tax on gifts and inheritanc is an important part of any well co sidered tax system. Its yield and a ministration Las been so entirely BI isfactory that every state in the u ion, with the exception of about fo or five, has .adopted it as a source state revenue. The validity of su a tax is unquestioned. The wisdo of it, it seems to me, does not adm of argument. The advisability of tax on inheritance is well expresse in an opinion of H. B. Seager whi he says: "The law properly protects tl owner of property in its full enjo; ment during his lifetime. When li dies, however, the disposition of th property which he preferred to r< tain as his own to the very end, a? sumes large social significance. Th imposition of an inheritance ax i simply the assertion by the state o a right tb share in property left a death under the conditions set fort in the tax law. If the share taken b; the state is moderate, there is ever; reason to think that the heirs wil accept it as a matter of course an< think gratefully of the part that i: left to themselves rather than grudg ingly of the part which they do noi receive. There thus appears gooc ground for the claim that moderate inheritance taxes, increasing from 1 per cent on inheritances from a cer tain amount left to direct heirs even to as much as 20 per cent of very big estates passing ?to collateral heirs or strangers, do not impose a burden that is consciously felt by anyone." The inheritance tax bill passed by the house of representatives at its last session, and now on the senate calendar, will yield large returns at a very small cost, and I earnestly recommend its passage. It is esti mated that this bill will raise any where from $200,000 to $500,000 per annum. It is very probable that had this bill become a law last year the state would have received from this source during the year 1921 approx imately $500,000, and yet, again it ?may be observed, as in the case of a tax on incomes, the levy is placed al ways where there is tax paying abil ity. Tax on. Petroleum Products. A large number of the states have placed a tax, ranging from one to two cents per gallon, on gasoline and other petroleum products, and it has been found generally that this tax yields large returns. In practically every county of the state there is a special levy on property for con struction and maintenance of high ways, and it is, therefore, not unfair that the state should impose a small tax upon petroleum products, for as i matter of fact, the owners of m vehicles receive the greatest bei and pleasure from these imprc highways. The tax on p^troli products should go to the gen fund of the state, and be used * means, of reducing the present 1 upon property. It is not impon that a special tax- be expended f ( special purpose, but it is imporl that^we have a tax system which yield sufficient revenue to carry all of the activities of the state. 1 so-called gasoline'tax bill now on calendar of the senate will yield least $500,000 per year, and I : commend its immediate passage. Occupation and Privilege Licens South Carolina receives a. sma percentage of its revenue from oe pation and privilege licenses tl any' other Southern state. I do think it is necessary to go into a tailed exposition of the principle i operation of this form of revenue has been tried with satisfactory suits in a great many states. It sec to me. that it can be easily justifi Many persons, engaged in professi and certain occupations operate vs out invested capital, but are prote ed in the practice of their privilej professions or occupations by laws of the state, and it is not i reasonable that a moderate fee paid the state for this privilege z protection. A bill will be submit on the subject, and I urge its adi tion. An examination of the laws n in force in the states of Georgia a Virginia, and other states, will ; you materially in arriving at a sal factory conclusion dh this matter, is estimated that from this source may be expected approximat $200,000 per annum. While 1 amount is somewhat small, it v nevertheless cause many persons w are practically escaping taxation pay a reasonable share of the < penses of the government. Whate\ the amount received from this ?oui may be it will certainly aid us in o effort to relieve the heavy burd now resting upon , visible property. Tax on Luxuries. A well considered measure impc ing a tax on luxuries* it seems to n should appeal to every fair mind person. One is not compelled to i tend the movies, or to indulge his a petite for soft drinks. It is possit for a person to enjoy reasonal health and at the same time absta from the use of tobacco. A persi who can afford to pay ten cents for cigar, 25 cents to attend the movi< and six or seven cents for a glass coca-cola, will not be materially i convenienced if a small tax is impc ed by the state on these amusemen and non essentials. I do not mean, < course, to confine the luxury tax/ tobacco and soft drinks and movir pictures. These are only mentiont for purposes of illustration. The la should include all forms of amus ments and luxuries. It is certain! fair to tax a luxury, and by so doin you reduce the tax on the necessity of life. The luxury is usually enjoye by those who can afford it, or b those who are determined to indulg their appetites and desires to the de' riment of their own well being. I either case the argument in favor o this form of taxation applies wit equal force. Hydro-electric Power. I would not for a moment recom mend the passage of any measure cal culated to discourage the develop ment of our'water powers. Naturi has wonderfully blessed South Caro lina in this respect. I commend th< wisdom and foresight of those wh( are devoting their talents and mean! to the development of our natura resources. But since nature has pro vided the chief assets of these devel opments, a small rate per kilowatt hour on the hydro-electric power can certainly be justified and yield con siderable revenue. The main argu ment in the support of other special taxes applies here. Electric current is used in industry to light our homes and offices, because it is cheaper or preferable to the use of other power or method. Its use is made possible by reason pf the water in the stream, which is the property of the state. Surely this state may properly im pose a small tax for the use of its own property for commercial purpos es. It may be argued that the state would receive no revenue from this source, except for the capital invest ed in these developments. This ob jection would apply to any special or other tax. Constitutional Amendment. I wish to again urge the passage of the proposed amendment to our state constitution, which is necessary be fore you may properly classify prop erty for the purposes of taxation. This matter is so thoroughly discuss ed in the report submitted one year ago on revenue and taxation, that it is unnecessary to add anything fur ther here. I have recommended the passage of these measures in order to raise sui Let us Print Your Office Stationery , i Look about your office and see what you need in office stationery. We are better equipped than eyer to supply your printing needs. 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