NEED OF A STATE TAX COMMISSION IN COLORADO 97 



check local extravagance through fear of higher state taxes and the 

 lack of necessity for state boards of equalization, it is open to the 

 objection that it might emphasize too forcibly the interest of the 

 taxpayer in the county expenditure. It is claimed also that desir- 

 able expenditures in progressive communities would be checked by 

 the addition to the local taxes of a penalty in the shape of an increased 

 state tax. If improvements were not checked, progressive communi- 

 ties would be taxed for the benefit of unprogressive. 



The results of this plan of separation of state and local taxation 

 will be watched with interest. It does not go into operation in 

 Oregon till 191 2, so that as yet nothing is known of its practicabiHty. 

 The novelty of the plan will delay its adoption till its success or 

 failure is estabhshed. Opinion against it seems to be developing. 

 In the Quarterly Journal of Economics (May, 1910), Professor Bullock 

 vigorously attacks the plan. 



The general property tax has failed as a means of taxing intangible 

 personal property because of the attitude of the pubHc toward the 

 vigorous enforcement of the law. The reason why pubhc opinion 

 does not condemn the evasion of the tax on money, credits and 

 securities is to be found in the sense of justice. The general property 

 tax presumes to tax all kinds of property at the same rate, and assumes 

 that by this means the burden will be equally distributed. However, 

 it is impossible by such a tax to distribute evenly the burden between 

 all classes of property. A tax rate of i§ per cent on the value of real 

 estate can be borne without serious difl&culty, but a tax of Hke amount 

 on money, credits and securities works grievous injustice. The 

 tax on real estate is capitalized and subtracted from the price by the 

 purchasers and in consequence the burden is not felt. But in case 

 of securities the tax must, as a general rule, be paid by the owner, 

 and hence his income from investments of this kind is greatly reduced. 

 As money, credits and securities do not generally yield a return of 

 more than 6 per cent, a tax of i| per cent on these kinds of wealth 

 is equivalent to an income tax of 25 per cent — a most unheard-of 

 thing. The British income tax at the present time is 12 pence in 

 the pound, or 5 per cent. The experience of civihzed nations in the 



