Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1920-12-15

of incomes and and the relation Of
such a system of taxation to the
present system of taxation of prop,
erty in New Mexico, real and per.
sonal, tangible and intangible tht
taxation of the net income of pro.
ducing mines and all other meth,
DDS and powers of taxation in force
in the state of New Mexico on
which may be recommended for
adoption by the legislature of the
state of New Mexico
''In another section it provides
that the report to the legislator,
may include recommendations upor
all subjects of legislation affecting
taxation.
Income Tax Law Defective.
"As income taxes and mining
taxation were the prime causes for
the commission creation, we have
gone very fully into these matters
It would be impossible in the time
have to more than summarize our
conclusions. AS to the income tax;
we feel that the present law is both
defective and unconstitutional, and
unwise, and advise its repeal. The
recommendation for a personal in
come tax at a flat 2 per cent rate
is advocated and / may say
to you that a complete draft of a
law on this line has been made by
the best authorities we could OBJ
tain. One section of this law reads
as follows: Intangible personal
property exemption. The taxes inn
posed by this act are in addition
to other taxes imposed by law, eX-
cept that money on hand or on de-
post with or without interest
bonds, notes, chooses in action, and
shares of stock in corporations
other than banks and banking as
sociations owned by any individual
or constituting a part of a trust or
estate subject to the income tax i'm
posed by this act, shall not after
the first day of January, 1921, be
included in any assessment roll or
be taxable for any state, county,
district or municipal purposes
Way Out of Difficulty.
This will. we think, finally dis
pose of the difficulty now existing
as to the taxation of intanglbles,
which, as you all know, actually
do escape taxation under our pres
entX system. 1t is both the prac-
ticable and honest way out of that
difficulty. AS to deductions and
exemptions, which are so prolific
a course of discussion in connec-
ton with income taxation. the law
to be suggested is. | am sure, very
clear, reasonable and explicit.
"In respect to mine taxes. the
majority of committee is definitely
convinced that the only proper
course is an ad valorem tax. Pro-
ducing mines are now taxed on the
basis of their output plus the value
of their improvements. We can see
no reason why they should not be
taxed as is all other tangible prop
critics; that is to say, on a basis
of their actual value.
1.-THE constitution provides that:
Takes levied upon tangible
property shall be in proportion to
the value thereof, and taxes shall
be equal and uniform upon sub
jects of taxation of the same class
Basis of Taxation.
zone must conclude that this
provision implies that the value OF
the property shall be taken as the
basis of taxation. II Is on this
basis that all other tangible prop
erty in the state is. or is supposed
to be assessed, but a special min
ing tax law, the one that has of
late been so much discussed. has
provided a means of determining
what the value Of mining property
shall be. a method open to the OBJ
lection that it is not a reasonable
means of determining the value.
The method so designated is the
value of the net output for one
year. Does it seem reasonable to
you. as business men. that that is
a true measure of the actual value
of any property? Taxes on differ
ent mines even will not be in any
reasonable proportion to the real
value of the different mines. Would
it seem to you, as business men and
farmers, that the value of the net
product of your farm this year,
when there Is no or but little prof
it, plus the value of the improve
ments as such, is the true value OF
your farm? Say that your farm
of 100 acres. about half in alfalfa
and half in oats, produced last year
and this year 200 tons of alfalfa
and 100000 pounds of oats. Last
year that alfalfa was worth $4,000
and the oats $1,000; this year they
are worth about $4,000 and $500
respectively.
Suppose your water rent, drain
age assessment. taxes and farming
expenses all amounted to $4,000
each year; would $1,000 last year
or $500 this year plus the present
actual value of your house, barn
and fencing measure the actual
value last year or this year of your
property as a whole? In other
words, If these improvements are
worth, say $4,000. would your farm
be worth merely $4,000 last year
or $4,000 this year? Is the profit
or the loss for one year a fair
measure of the value of the prop
erty, for the market for capitaliz-
ing into a company. or for placing
on the assessment rolls? Is 1t not
only one of the measures that
should be. that must be taken into
consideration to properly arrive at
the value of the property?
Heart of Mine Tax Situation.
"As far as l am concerned this
is the heart of the whole mine tax
situation. l think that the pres
ent law is unconstitutional, mas
much as it attempts to assess one
great class of tangible property on
a basis which is not in proportion
to its value, and unjust because
it prescribes that the main value
OF a mining property--as con-
trasted with all other properties
shall be arrived at through one
prescribed formula alone, whereas
every consideration available is or
should be used in arriving at the
assessable value Of all other tam
oil