Crittenden record-press., 1911-01-26

credit IL IL could not fioat its bonds at
OF these changing conditions--with th'
tax rate going higher and the yield from
this class OF property going lower-nai
becn that the owners OF this KIND o.
property will not list II for taxation wher
the tax rate takes anywhere from 40 &c
15 per cent OF the income yielded by thai
property. Therefore, more and more ol
ing. ana though such properly forms ev,
cry year larger part OF our tota
wealth. II yields steadily smaller pro
portion Of the total revenue. ana tn,
burden OF supporting the government
falls more and more heavily upon rea
estate and other forms of property thai
can not be hidden.
IL liz In order to cure this injustice ana
the evils attending u ard resulting from
u that the revision is uiged in Ken ucky
The evil has been corrected elseN here
II can be "a here The States OF he
Union are rapidly abandoning this sys-
TEN. No state has ever succeeded In de-
vising "a system OF penalties ana assess.
rents or EQUALIZATION that could compel
this Intangible movable property TO stand
ard bs taxed whcG h. TAX rate amounts
to conhscation of 50 large part of the
income.
How Il Works in Kentucky.
Now let us look a. the situation in
Kentucky TIE sta'c tax is 90 cents.
There you have ai-e.Cy a tax rate quite
as high as some classes of property can
easily stand. But We dc not stop there.
nd"r our law on top Of this Sl-cc mt
state tax must be put the county tax.
which. taking the sto.e over. win aver
age not far from 50 cents. This gives ms
tax rate ~ 81. too high for many. and
the process Of hiding gets well under
way
Nor do we stop here. ON top OF this
state ;aN of 20 cents and the county tax
OF 50 cents there Is still imposed local
tax ra"giug AZ he way from so cents TO
a \. .x1 x.Af
every or 10 cents added TO the rate
more and more properly is eliminated by
hiding or undervaluation. The average
tax rate In cities and towns Of first. Sec
onh. third. Fourth and NTH classes in
Kentucky is about s2.22 This amounts
TO about 81 per cent Of the return from
any 4 per cent investment IL amounts
to little under 45 per cent of the return
from any 5 per cent investment. and IL
yor apply IL TO ; per cent investment,
such as savings account, IL takes near
lv % per cent ol the income. Not even
the widest extremest would propose an
is what we try 10 collect from some
classes OF property. Il Is too much %
expect OF weak human nature. II IL q
stupid defiance of economic laws as well
as of the law of human nature when
any tax takes more than 10 per cent VI
the income from any class OF properly,
undervaluation and evasion will begin.
Tho larger the percentage of income
taken by a tax the greater incentive 10
evasion. differentiation and perjury In
order to escape the burden, until you
reach point where 20 pile further taxes
on a tax rate already high does not
Weld a proportiona;e increase OF reve-
nue.
We Have Tried II Nineteen Years.
We fixed this system i'm the new con-
nineteen years ago. Our inten-
tions were good We acted with the best
light We had at that time. Unfortunately.
however. at the time we adopted II, the
system was being aban ndoned elsewhere.
II Is not yielding sufficient revenue for
progressive state. 1t hampers industries.
II burdens the poor man. II drives capt.
tai out OF the state. or into forms Of In
vestment that do not promote business
activity and do not furnish employment
to labor and do not develop the resources
Of the state.
II is a mistake to suppose that II is the
rich man. only. or chiefly. who has a
cause Of complaint against the presen.
tax system The rich man can take care
Df himself. and does take care OF him
self. He understands the tax laws. or n
he does not understand them himself. he
Is able to employ the best legal counsel
to tell him how 10 so arrange his invest
ments as to be in n safe position when
the assessment time rolls around. IL all
rlse fails. he can move out OF the state
He Is smart enough TO put the greater
that he can easily conceal from the as
SCISSOR. The poor man can not do these
things. II he has been fortunate and
thrifty enough 10 save anything at all
generally Ii hrst takes the form OF
savings account and then Of home.
He knows little or nothing Of stocks and
bonds. If he has a savings account he
must conceal II from the assessor or give
up practically the whole OF its yeild in
taxes. II ne has not saved enough for a
home he still pays a tax on real estate.
for every man who lives under a roof
must pay this tax. whether In exchange
fnr a h.arf fnr
a rent receipt from the landlord. There
II no escaping II. And II the poor man
In Kentucky has tried TO buy home and
has made partial payment on II, ne
finds that the notes representing his de-
ferred payments are also taxed. and the
lender may be trusted to arrange matters
so that the owner OF the property viii
stand the burden OF the tax on those
notes. practically making him pay double
tax TO the extent OF his unpaid purchase
money.
Costs the State Heavily.
l have seen II stated recently that the
assertion that our tax system has driven
capital from Kentucky and keeps other
capital from coming 10 Kentucky is
bald assertion not resting on facts.
have stated before, and | repeat here.
that about three years ago by corre-
spondence and otherwise personally
traced more than five million dollars OF
capital that had been invested I'm Ken
lucky. but had been recently closed oui
and taken from the state because A.
owners found that under more advan.
tageous tax laws elsewhere they could
get greater yields from their investment
This money was not taken from tho
large centers Of population like Louis
Vile. II was taken from small oommun
ties where the withdrawal Of 100000 or
700, 600 meant a rather serious contrac-
ton in the available capital OF the com
nunity.
We Need Outside Capital.
II has not been long since / heard the
very startling statement made by
speaker at a public gathering that we
10 not need foreign capital in Kentucky
am quite sure no editor OF Ken
lucky newspaper will agree to this.
Practically all OF the development OF
he resources OF Kentucky that has
aiken place has been by the aid OF for
,ign capital. II must have been so
We did not have the capital ourselves.
n we do not get II from the outside.
We would not have IT at all. The de.
,elopment now going on I'm Eastern
Kentucky Is almost wholly by means
" outside capital. We need this out
tide capital. We want It 10 come. We
want Il to stand for its fair share Of
he burden OF our expenses II is not
proposed to exempt IL from taxation I'm
rider TO get 1t. but II is proposed to ad.
lust the taxes upon every form OF can't
al that comes with reasonable view
% the profit II expects to Yield its own
re and also with an eve ont FOR tho