ROLL OF HONOR.

The following men, while in the employ of the Board of State Tax Commissioners, answered their country's call and are now in the military service of the United States:

GLENN S. COLE.

HARRY EASTON.

JAY HARRIS.

F. C. KNEIBUS.

F. H. LOUD.

R. A. MCGINN.

JERRY MONAGHAN.

JAS. A. PERSON.

P. H. SHERIDAN.

C. W. TUOMY.

PAUL H. VOGELER.

RUSH H. WHITE.

Z. E. WORDEN.

F. J. ZGORSKI.

REPORT.

The "Board of State Tax Commissioners," frequently spoken of as the "State Tax Commission," is the state board created to supervise assessments and assessing officers.

"It shall be the duty of the Governor on the first day of November nineteen hundred and five to appoint three resident freeholders of this State, who shall be duly qualified electors thereof, and who shall hereafter constitute a Board of State Tax Commissioners, with power and duties as prescribed under this Act, one of whom so appointed shall hold office until the first Wednesday in January nineteen hundred and nine, one of whom so appointed shall hold office until the first Wednesday in January nineteen hundred eleven, and one of whom so appointed shall hold office until the first Wednesday in January nineteen hundred thirteen, and until their successors shall have been appointed and shall have qualified. Thereafter the successors of each member of the Board of State Tax Commissioners shall be appointed by the Governor by and with the advice and consent of the Senate, and shall hold office for the term of six years and until their successors shall have been appointed and qualified." Section 145, General Tax Law.

"Said Board shall elect a Secretary at a salary not to exceed $2,000 per annum, and a chief clerk at a salary not to exceed $1,800 per annum: Provided, That when any person shall have served as Secretary continuously for a period of four years the salary of said Secretary may be increased to an amount not exceeding $3,000. The persons so elected shall hold their offices during the pleasure of said Board." Section 146, General Tax Law.

"In addition to the Secretary and Chief Clerk said Board may employ such other clerical assistance as may be necessary and required to perform the duties imposed upon it by this Act.

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* Provided, That said Board may employ such expert assistance as may from time to time be necessary and essential to a proper exercise of the powers and performance of the duties prescribed in this Act. The compensation of such expert assistance shall be fixed by said Board at such an amount as shall be approved by the Board of State Auditors." Section 153, General Tax Law.

"The members of the Board of State Tax Commissioners shall receive an annual salary of $3,500. The members of said Board shall also receive all expenses actually incurred in the performance of official duties, all of which shall be allowed by the Board of State Auditors and paid from the general fund: Provided, however, That the members of said Board shall devote their entire time to the duties of their respective offices." Act No. 331, Public Acts of 1913.

The "State Board of Assessors" is the body created for the assessment and taxation of public service corporations contributing to the primary school interest fund of the State.

"The Board of State Tax Commissioners created under the laws of this State, together with the Governor, shall ex-officio, constitute a State Board of Assessors, one of whom shall be elected chairman of said Board. The Secretary of the Board of State Tax Commissioners shall be ex-officio Secretary of the State Board of Assessors without extra compensation. In addition to the Secretary, said Board may employ such other clerical assistance as may be necessary and required to perform the duties imposed upon it by this Act: Provided further, That such Board may employ such other assistance as may be necessary, with the consent of the Governor and the Board of State Auditors." Section 1, Act No. 282 P. A. 1905, as amended.

The Board of State Tax Commissioners and the State Board of Assessors, though nominally separate organizations established by different legislative acts, and exercising different functions, are practically one Board, co-operating with and supplementing each other; and are the agencies through which the State works in the assessment and taxation of public utility corporations whose taxes go into the primary school fund of the State, and in maintaining "equality of burden" in the taxation of the general properties of the State.

The work of these twin Boards, its character, extent and purpose, its influence upon general taxation, its effect upon the individual taxpayer, is less generally known, less correctly understood than the work of many other State Boards. There is lack of information on the part of many as to the theory and system of taxation in effect in Michigan, and the legis lation enacted in connection therewith. There is also on the part of some taxpayers a feeling that the "Tax Commission" is an autocratic body roaming about the State, needlessly interfering with assessments and taxation. Because of these conditions, the Board of State Tax Commissioners deems it proper, as in the previous report, to preface the record of actual operations with a brief outline of the taxation system of Michigan, and the powers and duties of the Board of State Tax Commissioners in connection therewith.

TAXATION SYSTEM OF MICHIGAN.

The fundamental principles of our taxation system as now established by constitutional provisions have, except as to the taxation of public utilities, been practically unchanged since Michigan became a State. The first five sections of Article 10 of the constitution embody these provisions :

Section 1. "All subjects of taxation now contributing to the primary school interest fund under the present laws shall continue to contribute to that fund, and all taxes from such subjects shall be first applied in paying the interest upon the primary school, university and other educational funds in the order herein named, after which the surplus of such moneys shall be added to and become a part of the primary school interest fund."

Sec. 2. "The Legislature shall provide by law for an annual tax sufficient with other resources to pay the estimated expenses of the State government, the interest on any State debt and such deficiency as may occur in the resources."

Sec. 3. "The Legislature shall provide by law a uniform rule of taxation, except on property paying specific taxes, and taxes shall be levied on such property as shall be prescribed by law: Provided, that the Legislature shall provide by law a uniform rule of taxation for such property as shall be assessed by a State Board of Assessors, and the rate of taxation on such property shall be the rate which the State Board of Assessors shall ascertain and determine is the average rate levied upon other property upon which ad valorem taxes are assessed for state, county, township, school and municipal purposes.'

Sec. 4. "The Legislature may impose by law specific taxes, which shall be uniform upon the classes upon which they operate.

Sec. 5. "The Legislature may provide by law for the assessment at its true cash value by a State Board of Assessors, of which the Governor shall be ex-officio a member, of the property of corporations and the property by whomsoever owned, operated or conducted, engaged in the business of transporting passengers and freight, transporting property by express, operating any union station or depot, transmitting messages by telephone or telegraph, loaning cars, operating refrigerator cars, fast freight line or other car lines and running or operating cars in any manner upon railroads, or engaged in any other public service business; and for the levy and collection of taxes thereof."

In accordance with the provision that the Legislature shall determine what property shall be taxed, that body has in Section 1 of the General Tax Law declared,

"All property, real and personal, within the jurisdiction of this State, not expressly exempt, shall be subject to taxation."

With the exception of property belonging to the United States, the State of Michigan and that owned by a county, city or other municipal body and used for public purposes, property exempt by law from taxation is mainly that owned by corporations (not secret or fraternal) organized for educational, religious, benevolent or scentific purposes, and thus employed. There are a few statutory exemptions such as those granted to householders, mechanics, soldiers and soldiers' widows. The right to exempt, in whole or in part, the property of any person who, in the judg ment of the Board of Review, is unable, by reason of poverty, to contribute to the support of government, is granted to the local Board of Review.

The tendency in recent years, in the case of tangible property, has been towards substituting ad valorem for specific taxation, until at the present day practically the only tangible property specifically taxed is automobiles. In the case of intangible property, the tendency is the other way, as shown by the present method of taxing mortgages, bonds and other secured debts.

In the administration of the general property tax, the assessment of property has been devised, and is universally employed, as the instrument for distributing taxation among the individual taxpayers. It has no other function than that of distributing taxation, and is the only instrument employed for that purpose; the essential aim being not "value" as such, but the providing of a sure base for an equitable distribution of taxes.

Uniform and equitable assessments, and consequent "equality of burden" in taxation have been the aim of our law-makers since Michigan became a State. The framers of our constitution recognized, that for assessments to be uniform and equitable throughout the State, they must be made on a common basis, and to provide such basis of assessments they wrote into the constitution this paragraph:

"All assessments hereafter authorized shall be upon property at its cash value."

Uniform and equitable assessments throughout the State, however, are not necessarily secured by the use of this common basis of assessment, because assessing officers may honestly differ in their interpretation of the term "cash value" and methods of determining it. To prevent such a condition, and assure a common interpretation of "cash value," the Legislature placed in the General Tax Law this Section:

"The term 'cash value,' wherever used in this Act, shall be held to mean the usual selling price at the place where the property to which the term is applied shall be at the time of the assessment, being the price that could be obtained therefor at private sale, and not at forced or auction sale."

These fundamental requirements, enacted to insure uniform and equitable assessments, have been supplemented with carefully prepared machinery designed to still further safeguard equitable and uniform assessments: a supervisor elected to make the assessments; a local board of review to correct errors in the supervisor's judgment and mistakes resulting from incorrect or scanty information; a county board of review,