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<br /> Yield based on 1954
<br /> 1954 gross 1954 1954 Recommended gross receipts under
<br />Class Hication receipts rate yield maximum rate recorilmended rate
<br />Retail merchants $27,750,000 3U ~~102 , 696 35~ $ 97,025
<br />VVholesa1e merchants 8,371,000 21~ 17,578 20~ 16;742
<br />Professional 1,461,000 1.08 15,779 80~ 11,688
<br />Contractors 2,646,000 42~ 11, III 30~ 7,944
<br />Personal services 1,405,000 76~ 10,678 50~ 7,025
<br />Business services 129,000 3?rt 479 30~ .387
<br />Repair service 547,000 3?rt 2,024 30~ 1,641
<br />Amusements 243,000 90~ 2,191 90~ 2,191
<br />Manufacturers 47,114,000 D~ 61,248 D~ 61,248
<br /> $223,764 $205,891
<br />
<br />It is observed from the above that the new recommended maximum rate "[QuId have yielded
<br />$205,891.00 in 1954 for the number of license tax payers included in these classifications,
<br />which is an ~~ount $17,873.00 less than the amount actually yielded under the 1954 figures.
<br />This amount could have been made up by the addition of about 2i% to the volume received
<br />from total property taxes. Five percent (5%) increase in property taxes based on last
<br />year's fiGuros TIould yield an additional $31,650.00, or almost twice the amount of loss
<br />from the suggested rates in the above table. Ten percent (10%) increase in the amount of
<br />yield in revenue from real and personal property taxes would yield approximately $63,300.00,
<br />or almost four times the amount of loss incurred by the new suggested rate of taxation.
<br />It should be remembered that a 5% increase in the revenue derived from real and personal
<br />property would still leave Martinsvil1e in next to the lOYfest bracket of property taxes,
<br />and in fact it would leave Martinsville near the bottom of bracket #3. In othcr VTords,
<br />1ftartinsville, oven yrith a 10% increase in its real and personal property taxes, Tfould be
<br />ridiculously lov! as compared with other Virginia cities that compare in population with
<br />Hartirnville. We believe that while the change suggested by the new rates would not
<br />greatly alter the amount of revenue derived from licerne taxes, it will tend to reduce to
<br />some extent those unreasonable high rates which have become irksomc to a large number of
<br />citizens TIho do not like to feel that they are being imposed upon troavise. It is not to
<br />be denied that a good many small businesses, and some that cannot be classified as small,
<br />have found it economically wortht:lhile to locate their shops and plants outside the
<br />corporate limits of the Ci vJ of l:Iartinsville because of the amount annually they 'iyere
<br />required to pay to the city as a licerno tax. We believe the new suggested rates will
<br />yield a fair license tax to the city vrithout being considered burdensome by those who pay
<br />it. It may be that the future rlill make necessary revision of these rates up or down,
<br />if adopted, but ne believe they should be tried. We believe there will be a better
<br />feeling of fair treatment if the suggested rates are adopted.
<br />
<br />In arriving at our suggestion, we have of necessity considered to some extent the tax
<br />figures available T;hich indicate in most irntances the "value added" feature of each group
<br />included in the table, but we do not feel that fairness can be established merely by an
<br />arbi trary "value added" approach. He believe you must consider marv other things, some
<br />of vThich have been mentioned in our discussion in this report, in trying to fix a fair
<br />license ta.x structure.
<br />
<br />(4)
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