The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1914-06-05
TAXES and
TAX RATES

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commission has compiled figures on
the taxation of the state and it's vari-
Gus subdivisions, and has made COM
PARSONS between the years 1912 and
1913. 1t is found that the total amount
levied in taxes for the veal just closed
exceeded the amount for the preceding
year by about 5000, 900. This is an in
crease Of about Z IL per cent. The
greatest relative increase is in the city
n special taxes, by which it is I'M
derstood that the commission has in
cluded as taxes" not only the sums
levied for the ordinary operating ex-
penses of the cities, but the other
sums levied against particular pieces
of property which are specially bene-
flied by the construction Of local i'm
proVements, such as sewers, water
mains, street paving and so forth.
The Herald has insisted and does in
sist that it is utterly misleading to
lump these items, because they do not
belong in the same class. The meth
cd is defended on the ground that the
money for these purposes has to be
paid, that the people have to pay 1t,
n that 1t is necessary to know what
sums are to be paid in order to ar
rive at any satisfactory conclusion
concerning the financial status of a
community. But a statement of in
~debtedness, whether it is to be the in
debtedness to be liquidated this year
or that which is to be paid during a
long series of years, means absolutely
nothing when taken by itself. A man
may owe a million dollars and be in
splendid financial condition, whereas
he may owe nothing and be dead
broke. 1t a nan has neither assets
nor liabilities, he may not be bank
rupt, but he would have difficulty in
establishing a aarge line of credit. The
man who owes a million and owns
property worth ten times that sum
would find his credit excellent.
Indebtedness is not an index of
prosperity or the lack of it. Thou
sands of people are today living in
their own unencumbered homes who
never would have had homes had they
not gone in debt for them. And it is so
with many public Improvements. A
new addition to a city is opened up,
Lots are sold to home builders. Many
of the purchasers are able to make
but small initial payments. They go
in debt for the balance. The indebt-
edness of the people of q city has
thereby been increased. But the
transaction has been a good thing for
the people, provided, always, that the
indebtedness incurred is not on Of
proportion to the earning capacity OF
those who incur 1t. That is the text
These people need the ordinary ia
~cilities and conveniences Of city life.
They need sewers and water mains,
perhaps they need paving. They are
able to pay the price. but they cannot
a it ali at once. Therefore they
borrow money for these purposes,
just as they borrowed money with
to complete their homes. Again
the transaction is a beneficial one,
provided the proper balance between
Indebtedness and earning capacity is
maintained.
Statements of taxation are interest
ing and useful as far as they go. But
correct conclusions as to the financial
condition of a community cannot be
obtained save through a consideration
of the two elements which are in
variably considered in reaching con-
illusions with reference to private
business, namely, assets and liabilities.
1t is to be hoped that the time will
soon come when it will be possible to
make a survey of the state, county by
county, city by city, and nave placed
in figures on the same basis, not mere
ly what each community owes, but
what it has to show for the debt. In
other words, we should hav a state
ment Of the assets and liabilities of
every community, and this, to be of
value, must be prepared by somebody
outside from and u~ninhuenced by the
local community, so that the whole
thing may be on the same basis.
In passing, it may be interesting to
cite a comparison of taxes recently
made. A Grand Forks man and a
Duluth man were comparing notes,
The Grand Forks man called the at
tention of the other to a piece OF
property with which he was familiar,
and on which the taxes had recently
been paid. He placed its value at
$4,000. 1t would take that amount to
duplicate it, and it would earn fair in
terest on that capitalization. His tax
es this year were a little over $42, or
just about percent on the actual
value. The Duluth man owned a
piece of property which he said was
also worth about $4,000. On this his
taxes were a little over $65, or a little
over one and a half per cent of act
ual value. The tax in each case was
the general property tax, no special
taxes being taken into account. Yet
the tax rate in Duluth is lower than
in Grand Forks. This is concrete evil
dence of the fact that a tax rate by
itself means nothing.
The credit of North Dakota would
be immensely better were the provis-
ions of the law followed and all prop
erty assessed at its actual value in
cash. TO do this. without demoraliz-
ing salaries and bond limits, would re-
quire legislation on these subjects, but