Report of the State Tax Commission of Arizona Volume 2 (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1914 Excerpt: ...easily calculated that the mine could produce so much net profit for, say, 20 years. Then by the use of actuary tables the present values of all the annual dividends could be calculated and the sum of them would be the present value of the mine. This has been worked out quite carefully by Mr. H. C. Hoover in his classical work on The Principles of Mining. If the same engineer should examine one of the vertical mines which was yielding the same annual profit and could find but two or three years of ore in sight, he would be forced to one of two conclusions; either to fix the present value of this mine, based upon the two or three years ore in sight, or else to make a guess far into the future, and say that this or that mine in his estimation, would last 5, 10, 15 or 20 years. This it is impossible to do, and the owner of a mine, if he chose to be technical, could without doubt upset such an assumption as being arbitrary in the extreme. The other school claims that the value of a mine should be based by taking as the primary facts its annual production and the profits arising from that production, and that the value of any property In its ultimate analysis really is based upon the profit that it can make. It therefore demands that the mines shall be assessed, using these figures as a basis. If a mine lasts for five years, then it pays taxes for five years, if it lasts twenty years, then it pays taxes for twenty years, and the states loses nothing by the transaction. The claim is made that inasmuch as taxes are paid annually the question of valuing a mine for the purpose of taxation is radically different from that of valuing it for the purpose of sale or purchase, or consolidation with other mining properties. It is, of course, assumed that if two mines are t...