316 THE FISCAL PROBLEM IN MISSOURI

National Tax Association’s Model Law provides for progressive
 rates on personal incomes.
Although progressive personal income tax rates may be
desirable, it does not follow that Missouri should adopt
steeply progressive rates. Several states adjoining Missouri
are at present considering the adoption of an income tax,
and until the degree of progression that may be used in
those states becomes known, it would seem to be the best
policy to adopt rates that are only moderately progressive
rather than rates as steeply progressive as are to be found in
any income tax state.
[t might be claimed that, since the local governments
would lose revenue as a result of the discontinuance of the
taxation of intangible property at general property tax
rates, a portion of the receipts from the income tax on incomes
 derived from intangible forms of property should be
returned to the local jurisdictions in which they were collected.
 The principal difficulty is that there is no way of
estimating the yield until the changed rates have been in
effect for some time, and it is therefore not possible to determine
 a rate that would enable the state to compensate
the local governments for the loss of revenue by returning
all or a large part of the income tax receipts from a special
rate on income from intangibles. For a period of several
years it would seem to be a better policy to provide a source
of local revenue the receipts from which would be more
certain and the success of which would not be so dependent
on changes in the administrative machinery. After the
receipts from the income tax levied on personal income from
intangibles can be gauged, a plan whereby a part of the
receipts would revert to the local governments might be
considered.

The Corporation Franchise Tax
As has been explained, this tax is essentially a tax on
corporate assets. Disregarding certain technical aspects, it
amounts to an extra tax on corporate property including
intangibles as well as tangibles. Considering the base for

tFor a discussion of the theory of progressive rates, see National Industrial
Conference Board, State Income Taxes, Vol. II, New York, 1930, pp. 74 f.