A _tax_ is a contribution levied on persons, property, incomes, or
business, for public purposes.
SOME USES FOR TAXES.--The _National Government_ requires money to
support the army and navy, to pay the salaries of government employes,
to pay pensions, and to finance other activities carried on by the
nation.
The _State Governments_ require money for the expense of their officers,
and to support their various institutions, schools, universities,
asylums, and penitentiaries.
The _counties_ require money for the building of bridges, the trial of
criminal cases, the salaries of officers, the relief of the poor, etc.
_Cities_ must pay for police and fire protection, care of streets, etc.
_School districts_ contribute to the support of the public schools.
The money required for all these expenses is raised by taxes, licenses,
fees, assessments, and fines.
STATE AND LOCAL TAXES.--The amount of tax paid by any individual to
state and local governments depends upon the value of the property which
he owns and the tax rate. In many places the adult male citizen pays a
poll tax.
The tax levied on property is called a _property tax_.
The tax levied on persons is called a _poll tax_. This is sometimes
called a _capitation_ (by the head) _tax_.
Sometimes a man’s income is taxed. This is an _income tax_.
After the amount of money to be raised by tax is decided upon, a man,
called the _assessor_, examines each piece of taxable personal property
and real estate, and places a value upon it. This is taken as a basis
for proportioning the tax among the property owners.
A _tax collector_ is one who collects the taxes. He is sometimes paid a
salary. Sometimes he gets only a percentage of the money he collects.
The _treasurer_ receives and takes care of the money collected by the
tax collector. He is paid a salary.
THE TAX RATE.--Sometimes the rate is fixed by law or by vote of the
citizens. More often the lump sum to be raised is named, and the
assessor determines the rate.
When the assessor is to determine the rate, he proceeds in this way:
First, he assesses each piece of property, usually not at its full
market value. Then he determines the total value of all the property in
his district. Next, he divides the total tax to be raised by the total
value of the property in his district. The result is the _rate of tax_
on the dollar.
USE OF THE MILL IN TAXES.--When a tax is apportioned, it is usually
found that if a few mills are paid on each dollar’s worth of property in
the district, the aggregate amount is equal to the whole sum of tax
needed. Consequently, we often hear of tax levies of so many _mills_ on
the _dollar_, as, 2 mills on the dollar, 5 mills on the dollar, etc.
The denomination of our money system called the _mill_ has practically
its only use in the levy of taxes.
Assessors make use of a table like the one given on the following page.
This table is based on a tax levy of 9 mills on the dollar.
The following tax rates are equivalent: