The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1901-01-10

great wealth ESCAPE. Besides the inherent
injustice of this, the state can Ill afford
10 nave those already battling for an in
dependent existence loaded with addi-
tonal burdens, which will sooner or later
transfer many of them into the depend
ent classes. These observations have been
abundantly verified during my two years
of admins tration
a free people cannot afford to permit
such a condition to continue permanently
II 1T Is allowed to, it will result in the
concentration of wealth and power in the
hands OF few and the mass of the re J.
pie viii become dependent 1t is idle TO
urge general retuctton of taxation or to
expect relief from that source The taxes
1or the support of the state government
may be reduced or shifted, but the gen
eral burden will increase from year to
Hlgn CIVILIZATION and high taxes are in
separable. The remedy, therefore is in
the adoption of policy that will distr.b-
ute the inevitable burden more eol;tabIv
and fairly Our general laws govGrni1s
the levy and enforcement of realty taxes
are probably as just and effective as can
pc ne defised; The provisions of the stat
utes hfRe been settled by judicial detarnl-
lnat1cn and 1 deem it the part OF wis
dom to disturb them as little by new
leSIslauon or amendments as is p5ssib e.
In regard 10 the taxation of personal
property, which causes the greatest CON-
plant among our people, and Justly So
the difficulty is inherent in the subject
matter and 1 do not see how that diff
additional legiSi alton. Some of our sister
states have made heroic efforts in this d.
rectior and with the aid of drastic legf--
latlon nave unearthed individual cases or
evasion, but so far as I am advised it
mas resulted in little permanent go5d
FOR the purpose of taxation, personal
pLtopefty naturally falls into two classer,
which may be called visible and invisible
Inc first class, which IS made UP princi-
pally of household goods In the homes of
Inc people, stock and implements on the
farms he fn0 II
Custry, cannot be concealed and there
lore does rot escape the assessor The
second class, which consists in the min
of moneys stock and securities Is read
lily concealable and rarely ever reached
by the assessors eye. To undertake to
tax these radically differing classes of
and valuation is simply absurd, and "a
only result, as it does, In the practi eal
exemption of the latter class. In my
Judgment there is only one remedy for
this evil, and this is to substitute a well
devised system of state income taxation,
III place of the present unjust and ineffec-
tual method of taxing personal prope: ty.
a very moderate income tax would result
IN more certain revenues remove the ir-
Justice and inequality of the pres ent sys-
tenn, relieve trade and production an0 fur
ther the permanent interests OF society
To enact a valid income tax law would
probably require an amendment to cur
state constitution and I shall therefore
not occupy your time with it's further
discussion. :. "a, 5~...s.5 &C., -ls.s
With few well considered amendments
to the statutes governing corporate tax
alton, substantial tax reform in this
state, so long a we adhere to the present
method of taxing personally, can on v
be secured through better ,;ldminfstra ION
and by the faithful and fearless dis
charge of duty by pubic officials. M 0re
has been accomplished in this respect by
administrative methods in the last two
years than had been affected by new leg
islation in the preceding fifteen yealN
A MT, WING
The specific amendments to existing
law relating to taxation that / recon-
mend and urge upon your attention are
as follows: .
Tristan amendment TO the law enact
ed at the last session and known as the
Somerville bill, SO that it will not be
IN the power of an indifferent sec! etary
of state to admit foreign corporations to
the state upon the payment of a mere
nominal sum, as has been done under the
law III its present form. l believe that
the duty Of ascertaining the amount OF
license fee to be paid should be imposed
upon the attorney general with power
given that officer to investigate, and to
require such evidence as i'll his judgment
seems requisite to enable him to detar-
mine the amount of license fee that
should be imposed under the provisions
of the law.
Second Paragraph 1886 of the General
Statutes of 1894, which relates to the as
sessment and taxation of the property OF
domestic corporations, should to prevent
confusion, be amended so as to make its
language conform to the construction
given it by the supreme court in the case
of the State VS.. Duluth Gas and Water
Company, rs Minnesota, page Sc. This
paragraph, as will be seen by the decision
referred to-. provides the exclusive
method of listing and taxing the prop
erty of all corporations and companies
falling within the purview Of that sec
ton, and as it embraces Interpretations
organized under our laws other than rail-
road, mOneyeds and insurance companies,
which are taxed pursuant to other pro-
visions OF the, STATUTE it is a very i'm
portant section of our tax law. The court
by construction and in pursuance of the
requirements of our constitution, elimin-
ated the fifth item in, the section and
holds that the Indebtedness is not to be
deducted from the valuation of the prop
erty and franchises of the corporation;
but even with this important
of the section by construction, it is still
defective in not affording a proper basis
for the taxation of corporate property
Discussing the methods by which just
assessment of the property of corpora
ton, including its franchises, may be ar
rived at and established, the court saws:
II is Well settled that these franchises
although neither visible nor tangible are
property which may be taxed=the same as
! any other property. Hence a very good
| method OF taxing corporations and stock
/ companies Is to list and assess their
| tangible property, real and personal, the
| same as the like property of other per-
| sons listed and assessed and also list
! or market value, less the value of its
| tangible real and personal property
otherwise specifically listed and as
sessed."
If corporation has-no- outstanding
bonds, this method would clearly reach
| every element-of property value owned
| by the corporation, for in the absence of
| bonds, the stock would be, as the court
| suggests, "A business photograph of all
| the corporations possessions and posi-
! bllt1eS; but If the corporation has Is
| sued bonds and raised the capital by that
! means, instead of by the usual method of
! issuing stock, then it may have prop
erty of great value which IS not ex-
| pressed in the value or the stock at all.
In fact, there is at least one instance in
this state with which l am familiar the
| street railway company of the city OF
Duluth, in which the value Of the en-
! tire franchise and assets of the corpora
| ton, other than its real estate and tangi-
| bic personal property, is represented by
| outstanding bonds and these have been
| issued in such an amount that though the
| income or the corporation is large the
earnings are almost wholly required for
the payment of the interest on the bond
cd debt leaving the stock without diyi-
| qenos ana without value. In such A case
| 1t is evident that the franchises of the
! corporation cannot. be reached through
| the assessment of its capital stock The
| section should, therefore, be amended so
| as to require the listing and assessment
| of the outstanding bonds as well as the
| stock; the real and personal property to
be deducted from the sum so obtained
| and the remainder to be subject TO taxa-
| &4or 80 now ,arocorilad g.,