Legislative Messages of Hon. James V. Allred, Governor of Texas 1935-1939 Page: 52 of 263
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answer to such an objection is readily apparent. The owner of
a building has a piece of property made valuable only because society,
fostered by the government, has made his property valuable by the
building of a city and the maintenance of a stable government to preserve
his investment. He receives therefore, in terms of benefit, something
which a stock broker, not owning property, does not receive. This
tax, in my opinion, embraces both the principle of ability to pay and of
the service rendered by the government. It blends the two principles
into a coordinated policy that may well receive your consideration.
Even though the Federal Government now enacts an income tax, there
is no reason why the State of Texas should permit individuals with
large incomes to escape payment of part of the financial responsibilities
of the State in which the income was earned merely because the Federal
Government has chosen to invade that field of revenue.
Property Classification Tax Am,endiment to the Constitution
The great burden of taxation weighing so heavily upon the people is
not in fact due to State levies, but rather to combined local taxes, city,
county, school, road district, etc. No real tax relief can come to the
people without an intelligent solution of the problem of local taxation.
It is difficult for the Legislature to deal with this question because
of the limited character of property subject to taxation for the upkeep
of local governments. In other words, the State has a broader base for
properties subject to taxation than local communities. In addition, the
great bulk of local taxes is due not alone to the actual operating expenses
of the local governments but to various contractual obligations, such as
bond issues floated in boom times, which now must be retired from taxes
on properties greatly diminished in value. This Legislature should,
however, make a careful study of the problems of local taxation and, if
possible, begin the operation of a long range program to relieve taxpayers
from these local burdens.
This can be inaugurated, as pointed out at the beginning of this
message, by securing State revenues from other sources and relieving,
to some extent, real estate, farms and homes from a portion of the
State ad valorem taxes.
One of the primary causes of the inability of local government to give
tax relief is the fact that only slightly more than 50c/4 of the taxable
property and wealth of Texas is on the tax rolls. Reliable surveys of
estates under administration in various counties in Texas disclose that
almost 509 of the properties under administration are intangible and
that only 3/( of these intangible properties appear on the tax rolls.
The Forty-third Legislature submitted to a vote of the people Senate
Joint Resolution No. 16 which would have permitted classification of
property by the Legislature for the purpose of levying low tax rates
against a type of intangible property (such as notes, bonds, mortgages,
etc.) not appearing on the tax rolls. It is a matter of common knowledge
that this character of property has neither been rendered nor assessed
because, it was argued, to tax intangible property at the same rate as
other property would operate as a discrimination against investment
This constructive constitutional amendment was defeated. Personally,
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Allred, James V. Legislative Messages of Hon. James V. Allred, Governor of Texas 1935-1939, book, 1939; (texashistory.unt.edu/ark:/67531/metapth3899/m1/52/: accessed June 23, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; .