278 THE FISCAL PROBLEM IN MISSOURI

urban community having a true value of $10,000 and that
B owns securities of the same value, which are taxable at
general property tax rates and the income from which is
taxable under the Missouri general income tax. Let us
further assume that both A and B receive a net return of 69,
on their investments before taxes, or $600 per annum, and
that the state and local tax rate on property is $2.50 per $100
of assessed valuation. Whether the owner of the real estate
will be overtaxed as compared with the owner of the securities,
 assuming that both will be reached for the general
property tax and the income tax, will depend primarily on
the percentage of true value at which the two kinds of property
 are assessed for the general property tax. As has been
seen, the average ratio for real estate is approximately 55%,
while such intangibles as are reported are assessed at a much
larger percentage of true value, in many cases at 100%. If
the taxable securities are assessed at full value, $250 will be
levied against them on account of the general property tax,
reducing the net income to $350. On the other hand, if the
real estate is assessed at $5,500, the general property tax will
amount to $137.50, leaving a net income of $462.50 before
the payment of the income tax. It is clear that under the
assumed conditions the owner of the securities would be
overtaxed as compared with the owner of the real estate.
This example, while purely hypothetical, serves to show
that, if intangibles are reached for the general property tax,
the tax burden will be greater than that on urban real estate.
It serves further to indicate the excessive burden of the
general property tax on securities that yield a rate of return
as high as 6%, which is the apparent reason why by far the
larger part of intangible property is not reached for the
general property tax.
Although the intangibles that are reached for general
property taxation in Missouri are no doubt overtaxed as
compared with tangible property in general, it does not
follow that intangibles as a group are in fact overtaxed as
compared with real estate. On the contrary, if the larger
part of intangible property, as appears to be the case, is
reached only by the income tax, if at all, while taxable
tangible forms of property are taxed at general property tax