314 THE FISCAL PROBLEM IN MISSOURI

be assumed that $4.2 million represents the annual revenue
needed in order to finance expenditures of $3.9 million and to
compensate the state on account of the loss of revenue
occasioned by the change in the general property tax base.
There appears to be no satisfactory answer to the question
concerning the income tax rates that could be expected to
produce the necessary additional revenue. It is by no means
certain that a flat rate of 2% on incomes of 1931 would produce
 twice the amount of revenues obtained from the income
tax in 1928 or 1929, even allowing for improved administrative
 efficiency. Both corporation and individual incomes
vary with different degrees of prosperity or depression, and
any estimate of taxable income is therefore conjectural to
that extent. If the rates for the personal income tax are
made progressive, there is no way of estimating accurately
the increased yield that will result, and the same applies to
the taxation of the income from intangibles at a special rate.
Because of the uncertain nature of the yield from the
income tax, to obtain all the additional revenues needed from
this source would involve an increase in rates that might be
out of proportion to the actual requirements. They would
have to be increased to a level that would make certain the
yield of the necessary revenues, and since no one can estimate
accurately the effect of administrative improvements on the
yield, the only absolutely safe basis for estimating would be
the present degree of efficiency. If the significance of the
variable factors is kept in mind, the only logical solution
seems to be a moderate increase in income tax rates coupled
with some form of tax the yield of which will not be so uncertain.
 In other words, some special form of tax, which need
not be continued after the yield of changed income tax rates
and the effect of administrative changes can be gauged,
might be used to provide a margin of security. A tax that
would fill this need is suggested later.
The following changes in income tax rates would no doubt
increase the yield of the income tax so that 609, or more of
the additional revenues, including the amount required to
offset the loss of revenue resulting from a change in the
general property tax base, could be derived from this tax:
(1) increase in the rate on corporations from 1%, to 114%;