Crittenden record-press., 1911-01-26

Svision Of the tax system that II origi-
mates largely In the desire Of banks 10
Germ himself about the banks in this
matter. The tax on banks does not stop
there. There Is such a thing as incl
dence OF taxation. which In commci
load OF on the next fellow. II bank
has TO pay a high rate of taxation IL
gets II back from the borrower. III that
borrower is a retail merchant he gets
II back from his customer III the bor-
rover is the owner o: real estate who ~
putting money into houses. he gets II
hack from his tenants, who may he poor
men. In the end, the tax will be borne
by somebody else than the bank. The
bank will continue to earn dividends for
its stockholders
tax on a bank has not an unfavorable
effect. The unfavorable effect of IL h
upon the community. however as "A
whole. Rather than stand too heavy a
load or taxation the banks VIII reduce
their capital and surplus, as many or
them have done In Kentucky. Under the
law or this State, the amount that can
be loaned by a bank 20 any one indvld-
ual or Arm or corporation Is limited to
a nxed percentage of the capital and
surplus OF that bank. The result there-
fore OF reducing the capital and surplus
OF banks is to reduce the amount OF
credit that can be given and to restrict
the banking facilities Of our large mer-
camille and manufacturing establish
ihtutS. nlS mas gone 80 ltT lnbt Intft
is not large establishment in the State
to-day that can procure from it's local
banks a sufficient line of credit TO carry
on its enterprise. Nor is there In Ken
tax We put on capital and banking de-
posits single institution or any group
OF institutions strong enough to float
really big financial enterprise.
A FarsicaI Result.
Contrast with this the fact tina; for
1910 there were listed In the State Of
Kentucky for taxation bonds to the
amount OF only s. 1886. out Of total
seven-tenths OF one per cent Add TO
bonds the amount listed of stocks and
money and they all amount to less than
10 per cent OF the total. and without
mortgage notes (Which can't ESCAPED to
less than per cent OF the total. This
Is absurd. but II Is true. No man will
presume TO say that this Is more than
an infinitesimal part Of the bonds ac-
alton under the State laws as they
stand or this meagre amount nearly
one-haf was listed In Jefferson County.
How II Could Be Better Done.
There are ways OF deriving revenue
from these classes OF property that es-
cape II Kentucky under our present sys-
tenn. Let me illustrate. We attempt. as
have shown. 10 tax savings deposits
yielding three per cent by the same
method and at the same rate that we use
in ta..ing any other form of property
which pays fifteen or twenty or twenty
FIVE per cent and which Is fixed and visi-
BILE In its character. The consequence Is
that practically no savings deposits are
given In for taxation. In the New Eng
land States savings deposits are taxed
at rates varying from some thirty To
forty cents This tax is paid by the
bank. and the bank adjusts II with the
owner of the savings deposit The State
is certain OF the revenue. since Il Is
content to take reasonable percentage
~ h
and II has no difficulty In collecting a.
II Is not forced to attempt to find this
property In the hands OF the individual
holder
Can BE Brought Out.
II may he urged that lowering the rate
on property Of this character will not
bring II out for taxation We can only
point TO the experience OF other States
In this respect. Human nature is pretty
much the same everywhere Most men
would rather be honest about their as
sessments III they can he so without sur
fering confiscation. The change Of rate
on this class OF property has multiplied
the revenue from II many fold In the
State Of Maryland within recent years
and made possible the reduction OF the
State tax rate TO l6 cents
Our Remedy in Kentucky.
But We are not at liberty IN the State
Of Kentucky 10 adopt any OF the meth
DDS that have afforded relief 20 other
States. because Of the res;rictioa y"
upon our Legislature by the constitution
NJ the State We are tied hand and foot
10 the general property tax system.
l do not believe In criticlsing withou.
4 remedy IL Is not propose
that there should be any sudden and
radical change Of the revenue system
upon the adoption OF the
proposed amendment to the Constitution
OF the State. II the Legislature proposes
the amendment To the constitution an.
the people ratify 1t at the polls. the re-
cult nj N that roipf will ha
the Legislature is put in position
where ~ can begin the work OF revising
our tax system. The amendment does
not mean must. IL means may"
IL is wise the Legislature will revise
slowly The government must go on.
Revenue must be had Revision must
be cautious. II should preferably be as
sisted by tax commission gathering in
for the Legislature 10 act
upon. II should be along a consistent
line designed TO end in n system under
classified. certain property being taxed
for State purposes, and for State pur-
poses only; other property for Municipal
purposes and for Municipal purposes
purposes and for County purposes only
all property being taxed at some rate for
some purpose and for one purpose only
that rate being as fairly as possible ad-
justed TO the normal income from prop
erty OF that class and collected by the
method that will yield the largest re-
turns
That Is the proposition In a nutshell.
II IL not theory II Is being successfully
done. Fourteen States have now so
shaped their constitutions that they may
10 II. And at every step Of the progress
from the old method to the new.
work would be in the hands OF H.
chosen representatives Of the people.
The Goal To Be Reached.
The formulating OF the new system
and the working out OF Its details shou
be done most cautiously. hut always
with view to finally reaching a point
where the state would raise Its entire
from one class of property:
the Counties from another class OF
and the Cities from still an
other. Under such system. when com
pletely in effect. farming lands would
be taxed only for local purposes They
should not pay cent OF tax for State
purposes. No kind OF property taxed for
State purposes should be taxed for local
purposes. and none taxed for County or |
city purposes should be taxed for State |
purposes.
BY this separation of sources OF revenue |
We avoid that piling up OF one tax rate
on another which makes the burden so
heavy in Kentucky. and by this classify |
ing OF property according to Its capacity |
Tor standing . tax proportionate to the |
Income IL yields. We remove the inoen-