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sufficient for the collection of a personal property tax; it must conform to scientific principles. An examination of the rates in the various cantons furnished the key to the problem.

In the first group the tax ranges from 40 to 70c per $100 and is much less in the smaller estates.

In the second group the rate is varied, which results in the varied success of the tax. Where the rate is high, from $1 to $1.20 per $100, the returns are meager on that class of property which can evade taxation, but the returns are much more complete where the tax does not exceed from 40 to 60c on $100.

The third group, owing to its economical and financial position, is not compelled to raise as much revenue as in the second and fourth groups, and the tax does not exceed from 30 to 60c on $100. The result is that little tangible property seeks to avoid taxation.

In the fourth group the tax ranges from 80c to $2.00 on $100, and the result is all but a complete failure. All property that can evade taxation escapes and in contrast with the other three groups, the revenue is very small.

To summarize, the experience of Switzerland is that, where the tax does not exceed 50c on $100, the returns from a given amount of property are much greater than the returns from the same amount of property on which the tax ranges from 50c to $2, returns decreasing as the tax increases.

Prof. Bullock, to whom we are indebted for many interesting facts in connection with the Swiss system of the personal property tax, says: “Swiss experience shows that, with good administration and a moderate rate of taxation, personal property can be taxed with reasonable success. It also demonstrates that the most Draconian laws and rigorous administration are powerless to reach the great mass of personalty when the tax rate exceeds the bonds of reason and moderation. In Switzerland this fact finds general recognition; if American states would take it to heart they could speedily solve the most difficult problem in the whole realm of taxation.”

THE MINNESOTA EXPERIMENT.

However, we do not need to go to Switzerland, Baltimore or Pennsylvania to study the minimum tax on intangibles. In 1910 the Minnesota Legislature placed a three mill tax on monies and credits. Prior to that time taxing officials, including their most able tax commission, despaired of listing any considerable portion of this class of property. In 1910 the assessed value of monies and credits included in the three mill tax law amounted to $13,919,806. In 1911, under the new law, the amount returned for taxation was $115,676,126, an increase of 731 per cent

over the preceding year. With three of the 86 counties of the state estimated, the assessment of monies and credits this year is $135,034,476, an increase of 16.7 per cent over 1911. Based on the population of 1910, the per capita assessment of this class of property was $6.70 in 1910, $55.73 in 1911 and $65.06 in 1912. Compared with bank deposits the assessment of 1910 represented only 4.2 per cent of such deposit, while in 1911 it equalled 33.8 per cent and in 1912, 42.3 per cent. In North Dakota in 1912 monies and credits were assessed at $734,584, while bank deposits aggregated $70,302,584. While Minnesota secured under her three mill law the assessment of 43.3 per cent of bank deposits, North Dakota secured a trifle more than 1 per cent of bank deposits. Not only is much more property listed under the three mill law, but the burden is much more widely distributed, and hence, more ably distributed among the people. This is shown in the large increase of the number of people assessed. In 1910, 6,200 people were included as paying taxes under this item. In 1911 the number was 41,439 and in 1912, 49,949.

For convenience in comparing the different items for the three years, we give the following tables :

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Notwithstanding the low rate of taxation, the amount of revenue derived from the three mill tax on money and credits in 1911 was nearly as large as that of 1910, when the rate averaged over 28 mills. The total tax on this class of property in 1910 was $379,754.58; in 1911 it was $347,028.38, a decrease of $32,726.18, or 8.2 per cent, compared with the preceding year. Excluding Minneapolis and St. Paul from the statement, the balance of the state made a net gain in revenue from this source of $71,505.85 in 1911 over 1910. Of the 86 counties of the state, 68 showed a gain and 18 a loss in revenue compared with 1910. In the 64 cities and villages of the state having a population in 1910 of 2,000 and over, 53 gained and 11 lost revenue.

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The heaviest decrease in the cities was in Minneapolis and St. Paul, but this decrease was more apparent than real. For many years a custom prevailed in both of these cities of first fixing the aggregate assessment to be made against the more wealthy individuals, firms and corporations, and then making an arbitrary division of the assessment among the items of the personal property list, without much regard to the actual value of the property included in the assessment. The amount was probably less than the assessed figures indicate. For this reason the Minnesota Tax Commission is inclined to think that the loss of revenue in these cities from this source in 1911 compared with 1910 was more apparent than real.

CONDITIONS IN NORTH DAKOTA.

It seems clear to the officials having to do with the administration of revenue laws that the uniform ad valorem tax is anything but uniform and that it works a hardship to the owner of tangible property. Theoretically it might seem that the tax burden would be fairly distributed by attempting to tax all property uniformly, yet, as a matter of fact it does not produce equality and there is no hope, if we can judge the future by the past, that it ever will justly distribute the tax burden. Little, if any, revenue is received from mortgages in North Dakota, although they are required to be assessed at their full value in money. Experience shows that the borrower often pays the tax which is ever levied in a higher rate of interest. Would it not be better to impose a lighter rate or a registration tax, such as has been adopted by New York and Minnesota, on this class of wealth, rather than let it escape taxation altogether. There are many ways of reaching taxable property other than by a uniform ad valorem tax if enough latitude is but given legislative and administrative officials. In Pennsylvania, West Virginia, New York, Maryland, Washington, California, Wisconsin and many other states, the attempt at uniform assessment has been abandoned and property is classified, and various rates and various kinds of taxes are applied to different classes of property. The general property tax, the income tax, the inheritance tax, and licenses and fees are employed; one scheme of taxation is peculiarly adapted to one class of property and another to another; one rate will bring returns on one class of property but absolutely nothing on another class, so the rates are varied.

The fear of those who advocate the uniform ad valorem tax is that tangible property, as well as real estate, will bear an unjust share of the tax burden. This fear has kept in vogue an antiquated tax system, which was sufficient in the days of our fathers when nearly all property was tangible. The effect of this system

is that real property, according to the United States Census of 1910, bears 83 per cent of all of the state and local tax of this country. The experience of those states and countries which have adopted the classified tax system is that, instead of increasing the burden upon real property, it more nearly reaches all classes of property with some portion of the burden of taxation and relieves land from its burden to just that extent.

In North Dakota the legislative and administrative officials are held hard and fast to the uniform ad valorem tax by a clause in the State Constitution. The 1911 legislative assembly passed a concurrent resolution repealing this section and providing for classification. It is before the present assembly and if passed will go to the people for ratification in 1914. This proposed amendment is, in the judgment of this commission, adequate to meet the situation and we earnestly urge its adoption by this assembly and its ratification at the polls in 1914.

THE PENDING CONSTITUTIONAL AMENDMENT.

The following is the concurrent resolution as it passed in the last legislature:

UNIFORMITY OF TAXATION AND CLASSIFICATION

OF PROPERTY.

Concurrent Resolution Amending the Constitution of the State

of North Dakota, Relating to Uniformity of Taxation and Permitting the Classification of Property for the Purpose of Taxation and Relating Further to the Assessment and Tax

ation of Certain Public Utility Companies. Be it Resolved by the House of Representatives of the State of

North Dakota, the Senate Concurring :

The following proposed amendments to sections 176 and 179 as amended by article 4 of the Constitution of North Dakota of article 11 of the Constitution of the state of North Dakota, is referred to the legislative assembly to be chosen at the next general election in said state, to be by the said last mentioned legislative assembly submitted to the qualified electors of the state for approval or rejection, in accordance with the provisions of section 202 of the Constitution of the state of North Dakota:

(Amendment.)-Section 176 of the Constitution of the state of North Dakota is amended to read as follows:

Section 176.—Taxes shall be uniform upon the same class of property including franchises within the territorial limits of the authority levying the tax, and shall be levied and collected for public purposes only, but the property of the United States, and

of the state, county and municipal corporations, shall be exempt from taxation; and the legislative assembly shall by a general law exempt from taxation, property used exclusively for school, religious, cemetery, charitable and other public purposes and personal property to any amount not exceeding in value two hundred dollars for each individual liable to taxation; provided that all taxes and exemptions in force when this amendment is adopted shall remain in force, in the same manner and to the same extent, until otherwise provided by statute.

VIEWS OF U. S. SUPREME COURT.

That the classification of property for purposes of taxation is upheld by the highest legal as well as the highest economic authority is instanced by the decision of the United States Supreme Court in the case of the Pacific Express Co., vs. Siebert, 142 U. S. 339 :

“This court has repeatedly laid down the doctrine that diversity of taxation, both with respect to the amount imposed and the various species of property selected either for bearing its burdens or for being exempt from them, is not inconsistent with a perfect uniformity and equality of taxation in the proper sense of those terms; and that a system which imposes the same tax upon every species of property, irrespective of its nature or condition or class, will be destructive of the principle of uniformity and equality in taxation and of a just adaptation of property to its burdens.'

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