The Nonpartisan Leader Newspaper, August 31, 1916, Page 12

LBV L) "~ body’s. attention Property . State Levy on Money and Credlts Now Only a Joke° ‘-hat scapes - ) Only Remedy an Income Tax, Says Head of Commlssmn By Frank E. Packard T has been the practice heretofore when the. state board of equaliza- tion could no longer escape the inevitable — when the - treasury deficit had mounted so high that the main- tenance of the activities of the state was no longer possible without increased revenue—to resort to a flat raise in the assessed valuation. In 1909 the state in order to meet the demands for increased revenue for state purposes increased the assessed valuation by a flat raise f 12 per cent.- The same condition confronted the state board of equalization in 1915 and they raised practically all classes of property 20 per cent. The result of these flat raises is dis- astrous in the extreme. The property already over-burdened with taxes has its burden disproportionately increased while property already escaping with a light burden escapes with a burden relatively lighter. But this is not the worst feature of the make-shift. An increase in assessed valuation results invariably in an increased tax burden. An advance of 20 per cent in the assessed valuation results in the levies remaining much the same as before the raise, and in no event does the downward trend of the ratio of rates equal the increase in valuation. FARM PROPERTY BEARS TOO HEAVY BURDEN = Acre proi)erty, that is, farm real estate, is today bearing more than its Just 3 share of the tax burden. true of city realty. The - same is While it is my- opinion that railroads are not assessed . as heavily as farm lands, yet they bear a heavy share of the tax burden. other public utilities, such as the express companies, large telephone companies, the telegraph companies and the special . car line companies are under-assessed, yet the highest possible assessment would not bring any very large amount of revenue into the treasury of the state as there is no great amount of this class of property in North Dakota. However, these classes of utilities should be much more heavily taxed. Instead of increasing the burden upon prperty already taxed, the problem is to find property which is escaping taxatxon Some - rect. class- of property and to place it upon the assessment llsts In looking around for such property, we - find a very large class whxch practxcally Bl escapes taxation in moaeys and credlts. & That thls class of property almost alto- gether escapes taxation is shown by the folowing table: ; Year Assessed Valuation 1891 2 fini Ll A e e 31,174,117 1892 11,002,656 1,049,463 . 937,640 874,202 593,120 725,522 . .. 834,608 .. 1,055,129 .. 765444 563,211 802,073 720,956 738,897 763,666 - 626145 731,505 . 763,303 ° 879,713 944,688 759,121 734,665 +..663:401 867,164 359,831 “Moneys and credits” in NOrth .Da- ‘kota amount to only one-third as much- as they did twenty-five years ago, if you take the assessment figures as cor- “The fact is nearly all this great while “real” property bears the heav1-» - est burden. -.actual value.. escapes taxation, ESCAPE QOF CREDITS FROM TAX A DISGRACE It ,1‘s . gn asi;oundlng fact that the amount of this property finding its way on the assessment‘i lists has constantly decreased since 1891.: The conclusion is inevitable, and is borne out by the experi- ence of - all taxing ofiiclals and tax experts, that the generdl property tax rate ca.nnot be apphed to_this class of property. - Every state in the.-union and - * practically every civilized cofmtry in the - should be take rate simply drives it into hiding or out of the taxings Junsdxctxon. The second method is that of an income _tax. In my judgment the latter is far superior to the former. Under the mill tax system, the citizen of humble circum- . stances and with little knowledge of securities, invests his savings in high class bonds at a low rate of interest and yet he is compelled to pay precisely the same taz_per thousand dollars. as the- skilled financier who succeeds in realizing ten, twelve or even a greater return on his capital. The Massachusetts income tax on intangibles levies six per cent-upon ' the revenue from all bonds and other evidences of debt. “the property owner who receives ten per cent on his investment pays twice the tax of the property owner who receives " but five per cent. In my judgment, the state of North Dakota should levy an income tax, if it is" constitutional, upon 'all incemes from mtangxble property... The same burden upon the net income from acre property. property should be 1mposed as is imposed upon the net 1ncome from acre property. orcapital* mvested in manufacturing or .. retail busmess In other: words, all taxes: should be measured by the “ability to pay and the same portlon of ;the farmers’. net income h as 1s taken from the income - of :the holder of a bond or a promlssory Tote. ,‘&a“ : < world has endeavored in vain to force WOULD REACH ACCOUNTS the same tax burden upn it that was borne by tangible property. That this class of " propérty, which i ranges somewhere between 300 . and 500 millions in North Dakota, should escape - with a_ tax burden of less than. .$50,000. annually: is- ridiculous: and réflects upon the good sense and dxhgence of the cltl- zenship of the state.. 2 There are two. well recog'mzed methods . of taxing it. One is a flat rate upon:its In lowa we find this rate- to be’five mills and ‘in’ Minnesota three: " The general rule; both in'this country and in Europe, appears to be three mills. In- other Words, a‘larger amount of re.venue " will ‘flow into the tréasury from a three _mill tax -on the actual value of this. property than a 40° null tax.” The larger WHICH BEAR INTEREST “While the income tax would not reach -actual cash ‘on hand, it would "apply, of course, to- teresb-bearmg book accounts. 1t might:be" supplemenf‘ed by a mill tax on non-intérest bearmg evidences of debt. It séems: probuble- that from 300 to - 500 thousand dollars” ought to ' be secured at once from tlns source of révenue and - that- eventuallly ion ‘dollars would find.. its" ~Way int tlie ‘public revenues “from the volume o ‘property now in the state. " By: ‘placing onezhal of this in the state treasury and pro-ratmg the remannder to the counhés ‘of the state, somé relief would be. afforded. 1o the state treasury w:thout a-further. increase of taxes upon'the property. already bearing the great tax burden of the state. X Editor Nonpartisan Leader: I clipped from one of the papers the’ other day an item that I thought all of your: readers ought to be interested in, . Here it is: New York, August 7—Accord1ng to the completed appraisal just made, the estate of the late J. P. " Morgan was worth $73,149,000, of which $53,684,918 went to the present Morgan. From what was learned- the presenit Morgan firm has made as - much money during the past two years as the old head of the house made during his whole career as the recognized financial and indus- trial leader of the United States. In brief, as the most conservative - estimate heard this week, the present J. P. Morgan has, within ‘. the past® two years, already more - than doubled his own personal fortune, basing the figures on the $63,684,000 which was left to him by his father. Na, one has ever made money like that in this or any other country. . ‘When a man “makes” fifty-five mil- . - lions or so in two years, when he breaks the world’s record’ for “making money,” his. feat ‘ought to attract nearly every- - money-making ' is important. - We -don’t get just the right bearing on what Mr. g T - useful in a ‘country where - : * transfer their right of "capital: better to Mr. Morgan has “mad_e” in two years can easily be-put out at interest to draw 5 per cent. Mr. Morgan wouldn’t need to be the financier he is to make it do that. Fifty million at 5 per cent will yield two .and a half millions a year, not for just one year, or two years, but for all time—assuming - that the financial system goes on' in the future.as it has in the -past. & It has been estimated that the average income of the head of a family in the United States—the average family income—is "$500 a year. So Mr. Mor- gan’s money—the interest on it, only— would hire * five ‘thousand heads of families,—a whole city ‘of people—a population of perhaps 25,000 souls and bodies, and. not only for one .year, but year after year and generation after generation—for all time, as far as we can see now: They wouldn’t need to be in productive occupation. ' They. could be working to contribute solely to . the' comfort and amusement of the house . of Morgan. They could be supporting a whole horde of retainers in idleness, -.a tribute to the glory and power of theu" lord and master. Great ‘is the power of capital! is used. ' This city of .people will'go on -working to support Morgan’s descendants . and their heirs or those to whom they the power to command thé labor of man- kind by wholesale so that others may hve 2 “in idleness ‘and ease. - But’ how did Morgan “make” this And ; it never dies, so long as only its income ' It is a . : “ mammoth accumulation—of what? Of . .-Morgan has accomplished merely by . - reading the figures. Tt’s 7 change them -inte ' facts: which ‘fit our . eomprehension,” The fifty-odd millions ¥ money ? fort and enjoyment?~ It~doesn’t appear so. Morgan * “made” this ‘money by virtue of an: unusual arrangement with the; agents of. one" faction® of the great nations at war. . They. have paid Morgan a percentage" of the most fabulous outpouring of wealth the world has ever' 'seen. - It -has drained the savings and mortgaged the future _efforts of a whole continent of toxhng men, women and children, : AR -And how did it go to Mor'g‘-&n? Did, “he get it because he possessed unique power to direct expendxtures, ‘because he. had extraordinary knowledge of men and - money, -because he was an industrial = genius, -a “general” of mdust'ry’ Oh; : There-are a thousand men in the - rno! United States with far greater industrial ‘and commercial directing’ genius. The reason xt went to Morgan was just ; thi in-“one. great group. group, uncontrolled by law, an ohgarchy of tremendous power. And Morgan is Is it . a- tnbute to wonderful capablllhes, a reward:for some great dlscovery or service which" Wl“ make_ men’s ‘1abor yield so much more in com- the men we ourselves -have chosen! We Morgan is the head of a great aggre-. gatxon ‘of . commercial and -financial . power. " The people of the United States have' permitted all' their banking and - commercial resources .to be ‘centralized It 5 i private _ing from ‘day to day thewx We laugh at the foolish peoples of the Old World who yield obeisance to their kings. We say “What a pity” and “What a waste” when we hear of annual gifts of-a million dollars or so to. keep up ‘the splendor of -courts and the sxlly pomp and show of royal households. Let us laugh at ourselves! We have set up our own king and our own ‘palaces of power ten times more waste-- ful, ten times more gaudy and ter times more ' foolish than anything the Old World ‘knows. We are still heaping our— wealth at the feet of our king—our financxal and commercial king, the master of our lives. We are still pledging our bodies and minds to his service——and sometiimes our souls, too. We are even selling them into the same: slavery. = What a fuss we make about our littl play "govemments”l about the petty detln 3 ‘of any authority or any ‘power Yielded to talk onsensx What a farce it is when w go' on: toll-. of our real m ters, Under ‘this system ! mortgaging the future of our children— T : l fig- ments of the’bram—-tymg our'own hands