Arizona republican., 1915-12-01

trlbUtiOn to the support of public charges, but rather the case of the
 average citizen who is undoubtedly
 willing to do his duty as a taxpayer.
 If he owns taxable securities. money
 on hand, etc, he has no alternative but to evade taxation or pay an un- reasonable and confiscatory tax. The
 result of every drastic tax law is to
 drive capital and people out of the
 state where same are enforced. After
 all, the purpose of a tax law is to ob- tain revenue, not to annoy and harrass
 the citizens; and a tax which would drive capital from the state is an un- wise tax and should have no place on the statute books.
 Tn considering possible remedies for the admittedly unsatisfactory outcome of our taxation of intangible property. we find that there are two opposing schools of thought. Representatives of the one school have urged that most, if not all, classes of intangible property should be exempted from ! taxation upon the ground that it is impossible to tax them with a reason able approach of equality or certainty. They contend furthermore, that credits and most classes of securities repre- sent merely lllItS or eNlUGnC6S or OWL ership of tangible property which is already taxed either in this state or in other states where it happens to be located. To tax this tangible property, and then to tax the evidences of own ership in it. is declared to be double taxation: and, since the tangible prop ertv k always assessed at it's situs. it is considered unjust to levy a second ta | sentatives cf the other school contend. as they have always done, that the evil of double taxation is not so serious as alleged: and that it is unjust that per sons who draw large incomes from in tangible property should enjoy full protection under the laws of the state hand vet contribute nothing to the sup port of public charges. They admit that there is much evasion of the pres ent tax upon this class of property. but contend that the true remedy is to strengthen the existing law and inn prove the methods of administering it. Representatives of the first school urge that all forms of intangible prop erty be exempted from taxation. Even if such exemption were desirable, which is very doubtful. I hold that it would he unconstitutional. Representa-
 tives of the second school do not seem
 to realize that a tax of 112 to per cent upon the full cash value of good
 securities is equivalent to a tax of from
 30 to 50 percent of the income received
 by the taxpayers. On securities yield
 ing per cent. such tax takes IS to
 36 per cent of the income. These rates
 are eXhOrbitant in themselves and are
 so excessive that they are virtually un- colIectible except from the most help
 less or ignorant taxpayers. Outside of
 our American states, no civilized gov
 ernment in the world-saVe in times of
 war-thinks of leVying such heavy
 taxes upon property so mobile and as
 readily concealed as money, credits
 and securities. Here and there a
 widow, an eXecutOr of some estate, or
 some person ignorant of methods of
 evading the law, may have to submit
 to our present tax upon q full valua-
 ton: but no one else thinks of sub
 hitting to such taxation. Personally.
 I have been unable to find a single ad-
 vocate of this plan who considers that
 he himself ought to pay a tax amount
 ing to one-half. one-third or even
 one-sixth of his income. and am forced
 to the conclusion that the state should
 iipN NOllli'Ci any Ollt Np GO Sp-
 The conclusion of my investigation of
 this subject is substantially this: The
 attempt to tax money, credits and se-
 curities at the same rate as other
 classes of property has everywhere
 proved a failure. In all American
 states the result has been that the
 assessment of this class of property
 decreases either absolutely-as in the
 in AriZ at a
 or relatively as wealth and population
 increase. No exception to this general
 rule can be found, so am forced to the conclusion that our present laws are at this point fundamentally wrong. Upon the other hand, it appears that several states have met with reason able success in administering a uni- form tax of moderate amount upon property of this class: and the con- clusion seems inevitable that if Ari- zona would tax this class of property on a plan similar to that now in op- eration in Minnesota, Pennsylvania and Maryland, a revenue WoCld be obtained with much less friction and ] hardship and the present evasion prac- ticed by both the taxpayer and those 1 officials whose duty it is to enforce 1 the present. law would be eliminated 1 The rate of tax which should be inn i posed on property of this class has 1 been the subject of much and careful | consideration. l believe that in this
 matter we should be guided by the eX- 1 perience of other countries and states | in taxing the income from this class 1 of property That experience shows 1 that a direct tax exceeding 6 per cent 1 of the taxpayers income is regarded as
 q heavy burden and that as the rate
 approaches 10 per cent it leads to eva sion. The rate most generally in use ] in states where such a tax is imposed
 is mills or $500 on the 5000 valua- 1 ton.
 With a small fixed rate, it is my be- 1 lief that the average citizen of Ari- zona will cheerfully submit to taxation upon this class of property. There are doubtless in every community some persons who will try to evade any tax. l however reasonable it may be; but I i cannot and do not believe that they | represent the attitude of the average 1 citizen The experience of other states 1 having iE force such a law points to 1 the same conclusion. Herewith some
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