296 THE FISCAL PROBLEM IN MISSOURI

State banks pay a corporation franchise tax and are subject
 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 position.
 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 assuming
 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 liability
 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