Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1903-01-12
BANK TAX.
Examiner TimberIake Discuss
es Question in His Report.
Gives Facts and Figures Concerning
This Most Important Matter.
Is in Favor of Slight Reduction in
the Tax Rate.

| In his forthcoming report as State
! Bank Examiner, Hon. F. E. Timber
| lake presents the following statement
| in regard TO the taxation of savings
| banks:
The amount of taxes paid to the
State for the year has been $537, 720.51,
as against $780, 33.42, last year-an
increase of $36,9S7.09. The increase in
the amount of this tax for two years
has been $SS,892.5S. This is more than
would have resulted from the increase
in deposits alone, and may be attri-
buted in part to the reduction in the
amount of government bonds held,
which are exempt from taxation.
The increase in the amount of this
tax over that of 1892, the last year
under the old rate, is $172,947.25. This
is an increase of AZ per cent. in the
amount of the State tax, while the de-
posits have increased but 81 per cent.
during that time. No part of this in
crease can be attributed to a decrease
in the holdings of government bonds
as the amount of these holdings is in
excess of that of 1892. This difference
in proportion to increase is principally
due to the provisions of the tax law
of 1898. Previous to that time the tax
was laid upon the average amount of
deposits alone, while now the average
of the reserve and undivided profits are
included herewith Again, the pre-
sent tax rate is five-eights of one per
cent upon investments in the State
! and seven-e ights upon investments out
of the State. AS has already been ex-
planned, the larger part of the in
crease in assets of these banks must
necessarily be invested out of the
State. For this reason, as the pro-
portion of these classes of invest
ments changes, the average rate of
| tax paid increases by force of the law
itself. When enacted, this law was
not intended as measure to increase
the amount of taxes paid paid by saw
ings banks. 1t was designed solely
| for the purpose of encouraging the
investment of their funds within the
State. 1t appears, however, that the
amount of their tax has increased at
least 10 per cent. because of it's effect.
Reasonable and equitable taxes
wisely expended produce good results
while unnecessary and excessive taxes
are always burdensome, no matter how
great the ability of the taxpayers to
meet them. All agree that it is neces-
sary for the State to collect sufficient
| revenues, in the form of taxes, to meet
| the expenses of government, and all
| agree that the deposits in savings
| banks should pay their just portion of
| this amount. Care should be taken,
| however, not to impose upon any par
| ticular class of property more than it's
| just portion of these burdens. Ger
| tairly no on2 wishes to place a pro-
hibitive tax upon savings banks, a tax
| that will embarrass or imperil their
! future, as it is generally admitted that
| they are one of the most beneficent in
| situations of the State.
1t is a most embarrassing RESPONSE
blity for any official of the State to
urge a measure tending to reduce the
revenues of the State. But the States
policy toward these institutions in the
past, clearly makes it the duty of the
Bank Examiner at this time to recon-
mend a reduction in the rate of their
tax for the same reason he would urge
other needed changes in the regulation
of their affairs. Former bank exam
| liners have frequently called attention
to the amount of taxes paid by savings
banks. They have considered the rate
of the tax they should pay, and what
the policy of the State should be to-
ward them in this respect. They have
| always treated the matter fairly and
conservatively. They never have been
influenced by any thought of personal
advantage, as there could have been
no possible consideration of the kind
to prejudice them in favor of these in
stitutions. But they have invariably
| urged that the deposits in savings
institutions, made up as they are prin-
cipally of the small savings of those in
moderate circumstances in life, ought
not to be taxed to such an extent as
to discourage their future accumula-
ton: that the indirect benefits derived
from the teachings of these institutions
entitle them to the same consideration
given our schools and charitable in
stitutions; that if the State desired to
regulate their affairs solely with view
of obtaining the largest possible in
come therefrom, even then lower rate
of taxation would give better results;
that reduction in the rate of this tax
as in 1882, would in time increase,
rather than diminish, the amount col
lected; that the larger portion of near
ly all other classes of personal prop
erty escapes taxation altogether
while every dollar deposited in the
savings banks is found and made to
nay it's contribution to the State; and
that the rate of taxation upon savings
II deposits in this State is higher thar
in any other state or country where
mutual savings banks exist
Since the above reasons for re-
duction in the rate of this tax We're
presented, conditions have materially
changed. These reasons still have
force, but there now appears to be
much stronger and more urgent rea-
son why relief should be granted. 1t is
: in consequence of the decrease in the
possible earnings upon their invest.
ments and the necessary reduction O.
{ their dividends. The question now
is not what dividends depositors ough
to have or ought to be satisfied with
| but what they will be satisfied Will
and not withdraw their deposits. 1t i
, not what taxes the banks ought TO pay