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Our state stands committed to what is known as the general property tax system, which means that all property shall be taxed ad valorem at the same or uniform rate. In the ancient days of the world when all property consisted of tangibles and business was carried on by barter, this was an ideal system and hence it is known as the primitive system, but times and progress have invented new classes and kinds of wealth which cannot be equitably taxed under the old plan. Credits and franchises and choses in action, stocks, bonds and other securities were unknown in the old times, but today are the most valuable part of our property, so any system that was good and useful at one time is entirely inadequate to reach a class or rather classes of property which did not exist at the time the system was inaugurated. It is absolutely necessary then that we put into operation some plan that will reach and deal fairly with all varieties of wealth. The present one certainly does not do this, and the Legislature of 1907, recognizing the impossibility of taxing all the property of the state in a fair manner, exempted from taxation altogether certain kinds of property which had been found to be impossible to reach. Other states have dealt with this same question and one or more are now torn by the conflicting ideas of the general property tax. Not one, however, contemplates allowing credits to go tax free. It is recognized as a fact by all tax experts that absolute equality will never be reached under any system until personal honesty has been developed to a higher degree than has ever existed, but, under a better system, very much can be done to make the burdens of government more easily borne. In dealing with taxation, we must use a certain amount of common sense and give some attention to the personal equation. Our law contemplates the idea that because a tax amounting to confiscation, requires a man to perjure himself every year for the privilege of living in Washington, we should go to the other limit and free these good citizens not only from the burden of falsehood, but also from the burden of taxation. It seems to me that if we can arrange things so that they will not be compelled to lie we have done much and this we can do by simply amending our unwieldy constitution and following the lead of older states who have years ago solved this very vexatious question, to the profit of the commonwealth and the satisfaction of the taxpayers. This has been done by recognizing as a fact the absolute impossibility of taxing all property at the same and uniform rate. When we can satisfy ourselves that money and credits and some other intangibles cannot be reached on the same basis as land and other tangibles, we too will have solved the question. Stocks, bonds and other credits are as elusive to the assessor as the Irishman's flea and no law can be made which will make it available as a tax producer as long as we either exempt it entirely or attempt to tax it at the rate required of real estate.

Its ease of concealment and its ability to move, makes impossible any effort to bring it to the rolls, but a method has been devised that would add much to our treasury in taxes and take nothing of honor from the owner. It is to levy on all this class of property a small specific tax in place of the large general tax. A tax of four dollars on the thousand or four-tenths of one per cent would not be a burden to the owner of intangibles and such a rate would bring to the tax rolls more than a billion dollars of wealth, that never was taxed and never will be under our existing system. The amount so raised (about four million dollars annually) would relieve the tangible property of the state of from one-seventh to one-fifth of its burden, which we will all admit would not be absolutely repulsive to the average taxpayer, but by hugging to our bosoms our antiquated system, going back to the time of Abraham and Jacob, we continue to carry the whole load, while elusive wealth disports itself in freedom. One of the great beauties of the small specific rate is that it is fixed by law and not by any assessor or board of equalization. One thousand dollars of value must pay four dollars of tax, no more and no less, and as the value of money and credits is easy to ascertain, the tax can be calculated by the owner and carried as a fixed or overhead charge. This to me seems a better plan than to exempt entirely a class of property which more often invokes the aid of the courts and calls upon the government continually for protection.

I realize the fact that this matter does not and cannot interest lawyers as much as some other classes of business, the wealth of the average lawyer being of such an intangible nature that the effort of the most vigorous and persevering assessor does not disturb or ruffle his placid security. But you have an opportunity of doing the state a great service in expounding the doctrine of tax reform, for while no one looks to a lawyer for money, a great many rely upon him for counsel and advice, and it is high time we took some concerted action endorsing some plan or system which will bring relief to a very much overburdened people.

Another very important thing to do in reforming our system__s to provide for the separation of the sources of the state and local revenues. Under the general property tax the state levies a direct tax upon all the taxable property within its borders, which taken with indirect revenues from other sources such as corporation license fees, taxes on insurance companies, inheritances, express companies and so forth, goes to make up the amount necessary to run the state government. Under the plan suggested the state would tax for its own benefit all inter-county property such as railroads, telegraph, express, private car and sleeping car companies and continue to derive revenue from the same indirect sources it now does. The amount so raised added to the four million dollars from the specific tax on money and credits would be ample to pay all the expenses of

state government and leave the local property to pay local taxes only. One of the good results to be derived from this system would be to remove the necessity of depreciating value to avoid state taxes. Under the present plan every assessor tries to protect his county by reducing the value, with the necessary result the valuation is low and the rate is high. This is not a good advertisement for any state, especially one in process of development. A prospective investor does not listen to the story of low valuation, and the high rate is a fact that is its own proof. With the separation idea as apart of our low this would all be changed and each county could exercise a home rule in taxation that would be advantageous. Home rule, however, should not extend to the power of exemption. The right to exempt property should always be reserved to the state, otherwise one county would bid against another to attract investment by exemption, but home rule should mean that a county could spend as much or as little as it pleased and make its valuation and its rate in proportion to the amount needed for county government. This whole scheme of reform, as has been said, necessitates an amendment to the constitution and the quicker we can have it done the better it will be for the taxpayer.

I cannot close this paper without quoting the opinions of two of the greatest of our tax experts on the General Property Tax. Dr. Richard T. Ely says:

"I have first to remark that the one uniform tax on all property as an exclusive source of revenue or the chief source the main feature in direct taxation-has never worked well in any modern community or state in the entire civilized world, though it has been tried thousands of times, and although all the mental resources of able men have been employed to make it work well. I have read diligently the literature on finance to find one example. I have made it my business, in my capacity as Tax Commissioner, to visit typical states and cities, and to make inquiries in person of citizens as well as officials interested in the administration of the laws, and the result has been abundantly to confirm all I have said about the impracticability of the one uniform tax on real and personal property."

In his "Essays on Taxation," Prof. Seligman of Columbia University and President of the National Tax Association, comments on our system as follows:

"The general property tax as actually administered is, beyond all doubt, one of the worst taxes known in the civilized world. Because of its attempt to tax intangible as well as tangible things, it sins against the cardinal rules of uniformity, equality and universality of taxation. It puts a premium on dishonesty and debauches the public conscience. It reduces deception to a system and makes a science of knavery. It presses hardest on those least able to pay. It imposes double taxation on one man and grants entire immunity to the next. In short, the general property tax is so flagrantly inequitable that its retention can be explained only through ignorance or inertia."

A thousand more quotations from most eminent authority could

be given, but this is enough to show you the conclusions of students who have given a life work to taxation trying to justify the primitive system. It cannot be justified. It is out of date and obsolete and fit only for the scrap heap of wornout theories. Let us use our best effort to discard it as soon as possible and join the other states which have successfully worked and settled satisfactorily this great question.



Mr. President, and Members of the State Bar Association: While the subject which has been assigned to me is essentially prosaic, it is one upon which the laity as well as the members of the legal profession are entitled to exact information. I shall endeavor, therefore, to avoid all merely rhetorical phrase and express what I have to say in simple, direct, untechnical language.

In 1906, Judge Rudkin read a paper at the annual meeting of the State Bar Association at Everett on the court's work, but that paper, clear, succinct, and admirable as it was, as applied to the court as then constituted, now stands in need of revision.

The Supreme Court of the state of Washington, as now constituted, consists of two departments, in effect, two co-ordinate appellate tribunals, but they are by no means, either in law or in actual operation, independent of each other. There is a constant and increasing effort on the part of the judges to make the work of each department the work of the entire court, so far as this can be done, and still secure the reasonably thorough and expeditious disposal of the immense volume of work which the creation of the two departments was intended to attain. One of the means to this end is the requirement that the chief justice shall be a member of, and participate in the hearings and deliberations of, each department. Another is the reassignment of the members of the court to the two departments prior to the beginning of the October term of each year, when two members of each department are transferred to the other. This insures that intimate knowledge of the work of the other department for the prior year, by at least two, and usually three members of each department, which could only result from a personal participation in that work. A third is the reading and checking with approval or dissent by each member of each department of every opinion written by each member of the other department before it is filed. The purpose of this is to keep each member of each department in thorough touch with the current work of the other department, and avoid, so far as possible, conflict or seeming conflict in our own decisions. When such a conflict develops, a rehearing is called for or a request made to the parties to submit the case to the court en banc on briefs. The question involved is then reconsidered by the entire court, and the conflict is reconciled either by overruling or a modification of one of the opinions in aecordance with the views of the majority.

I assume that you are all familiar with the general rules of the court touching the preparation of the docket for each session, and the assignment of cases for hearing. Twenty-four cases are

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