The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1919-03-11
INCOME TAX LAW
FAULTY ASSERTS.
TAX COMMISSION
H. H. Steele Declares It Penalties
Our Own People and
FavOrs Outsiders
ASSAULT ON COOPERATION
Makes It Impossible for Farmers
and Others to Benefit
From Our Statutes

Tax Commissioner H. H. Steele
fears North Dakota will derive little
satisfaction from it's new income tax
law.
II am in favor of an income tax as
the most just distribution of the tax
burden, said Mr.. Steele today. can
income tax is the best method of
squaring with the maxim Of taxing
according to the ability to pay. But
the North Dakota law has been so
amended as, to permit some of those
best able to pay to escape, while the
burden on some Of those least able
to pay is increased.
Unfortunately, t he committee
which had in charge the revision of
| this bill did not choose to take any OF
the taxation officials of the state, with
possibly one exception, into their con-
fdenCe. The tax commission as a
body, was ignored, and Prof. w. G..
ioylance, the leagues so-called tax
expert was given free hand. AS
result we have an income tax law
which will prove far from saticfac-
tory.
Was Good Bill
"The income tax measure, Senate
ELL 81, as introduced into the recent
session was a comprehensive law, its
provisions being copied largely from
the federal income act, into which was
incorporated a provision of the Wis
consin statute, providing for state
Mr.. Steele.
There are three distinct features
in tais Bill as related to the amount
Of the tax to be paid. In Section2,
the bill distinguishes between the
kinds of income. making 'unearned
income which it defines as any in.
come derived from rents Of lands or
other property interests, notes or sim
liar obligations, dividends or shares
of stock or other interests in any
bushes or industry and from any
sources other than the labor Of tho
person received the income; Second,
earned income, which is defined 10
mean any income received as wages
salary or fees for personal services
The rate of tax upon earned in
come is one-half of one per cent on
the first thousand dollars of net in
come, and it increases at the rate Of
One-half of one per cent for each
additional thousand. The rate upon
earned income in one-half of the
amount Of tax upon earned income.
Section 10 Of the bill provides for
flat rate of three per cent upon the
total net income of every corporation,
ing bushes wsithin the state, except
that foreign corporations pay the
three per cent only upon that part
of their business which arises out OF
transactions within the state.
This law is to first 60 into opera
ton upon the income Of the taxpayer
received during the year OF 1919. The
first returns to be made hereunder
will be required after the 31st day
of December, 1919. The returns will
be required in the same from as that
cxacted by the federal government.
RoyIance Requested Change
AT the request of Prof. Roylance,
the league tax expert, the joint COM
lnittee Of the house and senate
amended this bill so as to exempt
from it's provisions all incomes receiv.
ed as interest accruing on mortgages
upon North Dakota lands. 1t further
provided for the exemption from its
provisions of certain foreign life in
surance companies. Under these two
amendments, it is estimated that more
than half the tax that would have
been paid under the law as introduce
ed will be exempted under the act, as
1t was finally passed by the legisla
ture.
The demand for an income tax law
was largely from those Residents Of
the state who felt that interest upon
mortgage loans and other investments
should pay in tax small percentage
of the amount of income from such
mortgages, but under this law as it is
now upon the statute books, a great
percentage Of the income that it was
urged should be taxed is exempted,
and the burden of the tax that will
be derived from this law will neces-
sarily come largely from the farmers
who grow large crops and professional
men who have small amounts of taxa
BILE property and yet large income.
.-.- Tax on Business
The law would also reap cOnsidera
Bile income from businesses of the
state which also have considerable
tangible property, such as merchants,
excepting that the taxpayers under
the provisions of this bill are permit
ted to turn in, in part or all Of the
payment of the income tax, their per-
sonal property receipt, which shall be
received as money upon the income
tax. Therefore, II merchant is as
sessed 5000 for income tax and he has
paid more than that amount in person
al property tax, he will not be requir-
ed to pay upon his income.
The advocates OF an income tax
law believed that such at act would
require a reasonable tax from the
money loaned and the person who
lives upon the income from property
heretofore. acquired, but 1t would seem
that this bill, as amended, to a large
extent releases this class of property
and places the larger per cent OF tax
from this source upon the people who
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