Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1858-04-10
Uneauai and Unjust Taxation.

Unequal and Unjusi Taxation
The existing system OF State taxation Is
admirably adapted to two objects; to CONTRACT
the commerce of the State and 10 SILK th'
State credit.
The tax on merchants licenses is OF all
others most directly and varlousIy injurious
to commerce. To obligc merchant to pay
a tax on the amount of bis sales, Is simply 70
tax bis capital every time he turns 1t over
10 other words, the energy, competency and
efficiency of a merchant subjects bin IN eve
nv instance to increased taxation. This can
best be illustrated by an example under the
law OF 1856. Two merchants have each a
capital of $1,000. The first converts his cap
ital from goods into money eight times d.
ring the wear, his sales amounting to about
$4,000; be pays a tax of SO, that is Clio
per cent on his capital. the other merchant
turns over the same amount OF capital nine
times during the year, his sales amounting
to about $40 500; he pays tax OF $50, that
is 9 Clio per cent. on his capital. This is sui
fcient to exhibit one manner OF cramplng
the energies of commerce, that OF taxing su-
peror activity and Intelligence in proportion
to its grade Of excellence.
posed upon commerce with those imposed
upon other pursuits. before we can realize
the manifold inequality and injustice OF this
mode of taxation. The Constitution OF |lr-
GINA regards the land tax as the normal
standard for taxation generally. The mer-
chant who turns over his capital OF 81 ,OOO
nine times during the year, pays tax OF
500, or clio per cent, on such capital. The
farmer who invests 81 900 10 land, pays q
tax of four dollars, OF 10 of one per CT
Thus the merchant pays twenty-tour times
the amount Of tax paid by the agricultural
! ist on the same amount OF property. And
even this calculation overrates the farmers
taxes as compared with those OF the merchant
since it is notorious tina; lands in Virginia are
assessed at about One-half their value.
We must examine still further in order to
appreciate the mischief of this system OF an
equal taxation. lis direct effect, is to reduce
the amount of customs and raise the price
of merchandise. Large planters, and other
wealthy citizens who consume large supplies
become each one his own importer, and thus
O wealthy class of consumers extend little or
no patronage to Virginia merchants, and es-
cane entirely the burden Of the license tax, the
maximum extent Of which falls on the poor
er class of consumers, who are obliged to buy
in small amounts, and cannot import for them
selves. The tax falls heaviest on those who
are least able 20 pay it, and the merchant IL,
to a great extent, deprived of the more valu-
BILE custom of the large consumers.
And there is yet another mode OF unequal
taxation, the chief burden Of which is thrown
on the commerce of the State. We refer to
the tax on private credit.
All moneys loaned at interest are subject
ed at least twice to the same tax imposed on
land but once. They are taxed III the hands
of the last borrower, as we'll as IN those oil
eyery previous borrower or lender. II a
loans money Oh bond to B, who loans the
same to C, each one is obliged 70 pay the
same amount If tax as \ would have paid
had he retained the cash on hand; triple tax
is imposed on circulating money; a single tax
on boarded money. The very opposite poll
cy is adapted to that which sound Judgmen
would dictate. If any discrimination must
be made, it ought to be against the hoard
and in favor of the loan; agalnst capital, and
in favor Of credit, for credit is the Immediate
representative Of labor. Instead Of this,
credit s subjected to tax equal to that im'
posed on capital, 10 the first instance, and III
creasing in an arthmetical ratio with every
subsequent extension. Thus, IN the example
above cited, capital is taxed 10 per cent.
and double that rate Of TAX Is imposed on
credit. II the money should change hands
three times, credit would be mulcted twice;
if four times, the tax on credit Is quadrupled;
If fifteen times, the tax on credit consumes
the hole legal value of the credit ITSELF
This is what renders usury laws, (lndlspen-
sable as they are to public welfare and pr
yate mOrals) so oppressive to the mercantile
interests Of the State The usury law and
the taxation Of private credit taken together
constitute farcicsl contradlctiCn. The usu-
~ law presumes that the extension OF credit
is q necessary incident of commerce and Of
society itself, and the same law pTesumes
that six per cent. is the Just value OF the use
of money as ascertained by general expert
ence. The tax act then interposes to reduce
the nett profit accruing to the lender, to 5.OU,
5, 4 or per cent according 20 the repetition
and extension Of crcdIt-in other words, 1t
cuts down the rate of interest below the law
ful standard, and restricts the extension OF
credit, which the usury law presumes ought,
on che contrary, to be encouraged.
What is the consequence? The money.
lender, in order to obtain nett profit OF Elk
per cent, must charge the borrower at the
rate of 8, 10, or y per cent. That which
was in the first instance malum In sc, Is
rendered by operation of law mere malum
prohibitun, which is consequently, and often
must aud ought to be, perpetrated 10 def
auce of law. We do not pretend to state
that the taxation of private credit in the
State of Virginia constitutes the sole cause
of the e1hor bitapt rates Of interest PAID on
commercial paper. But we do assert, with.
out fear of confutatiOn, this is one cause OF
the evil, and that every principal cause OF
the same commercial obstruction may be
traced to similar instances Of unjust taxation
in Virginia and elsewhere.
Last in the list of this species Of leglsla-
tive suicide, we adduce the taxation Of State
cledit,--Rich. Enquirer.
Lost Captain Found.
The New York correspondent Of the Boston
Journal, states that some three years ago, the