296 THE FISCAL PROBLEM IN MISSOURI 
State banks pay a corporation franchise tax and are sub- 
ject to the income tax in addition to the general property 
taxes on real estate and bank stock. The general property 
tax on bank stock is assessed to the shareholder, but in 
practice the tax is paid by the bank, and for all practical 
purposes the distinction between the shareholder and the 
bank need not be considered in analyzing the burden of bank 
taxation. Since banks chartered by the state are subject 
to two taxes that the national banks are not required to pay, 
it follows that they are in an unfavorable competitive posi- 
tion. In other words, their tax burden at the present time 
is excessive as compared with national banks. 
The difference in the total taxes that are assessed against 
national banks and state banks may be illustrated by assum- 
ing the case of a banking institution with a combined capital 
and surplus of $1 million, deposits of $10 million, loans and 
investments of $10.6 million, and a bank building the true 
value and book value of which is $400,000. The last two 
items are assets, and the first two comprise liabilities in the 
bank statement. In practice there are other asset and lia- 
bility items, such as reserves and contingency accounts. 
The items stated, however, are sufficient for the purpose of 
illustration. If itbeassumed further that the bank buildingand 
shares are taxed at a rate equivalent to $1.50 per $100 of true 
or book value and that the net income of the bank is $100,000, 
or 10% of the combined capital and surplus, the general 
property tax on the bank will then amount to $6,000, and 
the property tax on the shares will amount to $9,000, on 
the basis of 100%, assessment of the capital and surplus less 
the value of the real estate. If the bank is a national bank, 
no other taxes are assessed, and the total state and local 
taxes paid amount to $15,000. 
On the other hand, if the bank is a state bank, it is assessed 
$1,000 for the income tax, in addition to the property taxes. 
Also, as a state bank it has to pay a corporation franchise 
tax of $500, on the basis of the assumed bank statement. An 
unusual provision in the franchise tax statute provides that 
for the purpose of this tax bank deposits shall be regarded as 
left for safe-keeping. In other words, $10 million would not