Arizona republican., 1915-12-01

Address delivered by Thos F. Camp bell member Arizona State Tax com mission. at the twelfth annual corven- uon ot the Arizona Bankers associa- ton at Castle Hot Springs Arizona November 12th.
 Enc Constitution at present provides that all property unless specifically exempt regardless of its kind or of it's ownership, must be assessed and taxed m the same manner, and on the basis of it's full cash value.
 The revenue laws define Property subject to taxation" and provides un- der the term Personal property for the taxation of all money, goods. chat felS, choses in action, evidence of debt-hoth tangible and intangible. providing, however, for the deduction of liabilities whenever solvent debts arc. assessed"
 The mandatory provisions herein noted for the taxation of bonds. cash on deposit in banks, cash on deposit with other corporations, cash on de- posit with individuals all other credits or money at interest, notes secured by mortgage, other notes. accounts. ash on hand, have never been carried out literally cannot be carried out in practice, and which should not. even 1T 1t could be, be enforced. The grand total of all Of these as assessed in Arizona for the year 1915 is less than lOu,oO0-practically all of which was found in small estates going through probate in the form of cash on de posit'-or less than one-quarter of one per cent of the total roll. which was s420,552.411.90. The amount as sesScd IS but a very small fraction of the tCtal of these items owned by Arizona taxpayers. The bank reports show deposits alone of $34.00O, OOOOO
 The fact is. that q man cannot keep his money on deposit in savings bank if ont of the 9 or i percent interest re- ceiVed. he mas to pay from to 3 per cent in taxes. Hence he either returns a false statement (perjury cOmmitted) or WIthdraWs his money and sends !, out of the state.
 Again. bonds safe enough for sound investment yield from or 515 percent interest. take or 2 percent from that in taxes and the yield is too low. An honest taxpayer cannot in- vest in these desirable securities: one willing to perjurc himself does not return them if he owns them The result in Arizona is that this class of property is never returned for taxa tion.
 Mortgages are or at least can be more effectively reached for purposes of taxation, because they are recorded Not a single mortgage is taxed in Ari- zona. The,- should not be. else every cent so taxed would be double taxation The land and improvements. if there be any. are taxed and then the mort rrs1 crla ,E-I1i.1, stand for and ,,oDraCoo+ rart or the value of the land are also taxed But worse, still the double tax does not fall UrOn the lender, at whom it is aimed. He shifts it to the bor- rover, adding thereto a sufficient amount to cover the risk incident to n increase in the tax rate. So that in the end the land owner or borrower is taxed not only upon his land but also upon the money he borrows, plus the tax risk AIortga ges should not be taxed as property as they in them selves are not property. When the owner Of nroperty mortgages it. he in reality sells an interest in it to tho morjsagee. As in the case of the owner Of bonds issued by a corpora ton. so the owner of the mortgage is wiling to allow the mortgager control of the property and to retain all the profits above a certain amount on con liti"n that the return Of interest on his share shall be secured, and in case that the owner. the active manager of the business. does not make a success of same that he then can take posses sion. The same result could be secured hy partnership contract, but it would he more cumbersome and not so cas- fly enforced The state has simply provided an easy way of carrying out such a partnership by means of a luortga ge.
 Monied capital-in my opinion, the most desirous element that Arizona needs for the development of it's num- orous and varied industries-will not come into Arizona unless it can earn
 S much here as elsewhere, and to do that if it comes. it must evade or shirt the taxes. That it does not come 7s freely as it should is shown by study of the amount of bank capital derosits and the rates of interest True. other and probably more serious causes in our Constitution and Statutes contribute to this latter fiscal condi- ton of the state, but the ever present lear is not in fact. of a burdensome tax has an appreciable effect upon pos scssors of monied capital looking for investments. A bank deposit drawing interest represents an interest in the bank. The depositor is given the se- ourity of the banks capital with 9