New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1912-04-24
THIRTEENTH ARTICLE
Taxation of Money and Credits.

! Taxation or Money ana CredltS.
.. (Continued)
In 1911, as explained in the preced-
| ing article, a somewhat radical
change was made in the method of
listing and assessing money and
credits in this state. For more than
so years Minnesota had been trying
to reach such property for purposes
of taxation with the same machinery
and in the same manner as we taxed
tangible personal property. Our ex-
perience was not materially different
| from that of other states and cOun-
tries that had followed the same meth
ods-at no time did we ever get more
| than a fraction of such property on
| the tax rolls. Neg. ,-
Two causes have largely cOntribut-
ed to our failure to reach this class of
property for purposes of taxation
the intangible nature of the property
and the high rate of taxation that pre-
vailed in most of the taxing districts
of the state.
Such property, known as intangible
personal property, can be easily con-
cealed, because, unlike live stock or
manufactured goods, or the goods and
wares of merchant it is not suscep-
| tible to the touch or eye Of taxing Of
fcials and cannot be appraised with
the same degree Of accuracy as tan
gible personal property. For this
reason we are compelled to rely
, largely on the declaration of the
owner as to the value of his property
fof this character.
Experience in this and every other
state has demonstrated that when
tax rate consumes more than 10 FER
cent of the income from this class q!
property it will not be voluntarily
listed for taxation. The tax rates
vary in different taxing districts of
per cent to more than ten per cent
the average for the state this year
being nearly three per cent. This
means that in some districts the taxes.
on credits would amount to more tba2
the entire income from such property.
while the average rate in the state
would consume from 40 to 60 per cent
Of such income. Under such condi-
|tions the natural tendency is to Goa
ceal such property from taxing o.
! ficials, and perhaps justifiably SO, for
no man should be expected to CON
tribute more than half of his income
for support of government"
| Realizing the difficulty Of reaching
this class of property for purposes of
taxation under the prevailing system,
the Legislature, in 1911, passed law
Imposing a fiat rate of three mills on
the dollar on such property. 1t was
felt that a low uniform rate of taxa
ton would result in placing a large
amount of this class of property on
the tax rolls that had heretofore en-
tirely escaped taxation. 1t was con-
tended that the average man desired
to be honest and that a low rate would
hermit him to make a truthful return
of property of this character that he
Knight own without the fear of having
most of it's income confiscated for
taxes.
/ The results the first year under the
new law have fully justified these
conclusions. The assessed value OF
this class of property returned for
taxation in 1910, under the old law,
amounted to less than fourteen mil
lion dollars, while in 1911 the amount
listed for taxation under the new law
! exceeded one hundred and fifteen mil
lion dollars, an increase of nearly $50
per cent in one year. In 1910 the
assessed value of this class OF prop
erty represented only 40 per cent OF
the bank deposits of the state. while
the assessment of 1911 amounts to
33.S per cent of such deposits.
Notwithstanding the low rate the
total tax derived from this class OF
property in 1911 was but slightly less
than in 1910, g. OF the sc counties OF
the state showing an actual increase,
while 50 of the GA cities and villages
of the state having a population OF
5 OOO and over made substantial
gains in revenue over 1910. Not on
" is the increase a very gratifying
one, but the returns show conclusiveiy
that the tax is much more equitably
disturbed among the people than it
was under the old law.
It is confidently expected that the
assessment this year will show con-
| siderable increase over last year. The
nurpose of the law is now better I'M
derstood by both the people and the
taxing officials than it was a year