Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1858-04-09
UNEQUAL AND UNJUST TAXATION.


The existing system of State taxation is admirably
adapted to two objects to contract the commerce oi
the State and to sink the Stale credl'.
The tax OH merchants licences is of all others most
directly and variously injurious to commerce. 10
obge merchant to pay tax on the amount OF MS
sales s simply to his capital every time he turns
it over. In other words the energy, competency and
efficiency Of merchant subjects him in every in.
stance to increased taxation. This can beet be Illus.
trated by an example under the law OF 1856. Two
merchants have each capital Of sl0DO. The first
converts bis capital from goods into money eight
times during the year, his sales amounting to about
S9 600; he pays tar Of s76 that isl 10 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 SlO,SDO he pays tax
OF $685. that s9 10 per cent hs capital. This is
sufficient to exhibit manner Of crampng the en-.
erges Of commerce, that Of taxing superior activity
aud intelligence in proportion to its grade oe1ceence.
But we must frat compare the taxes imposed upon
Commerce with those imposed upon other pursuits
before we realize the manifold inequality and in
Justice of this mode of taxation. The Constitution
of Virginia regards the land tar the normal stand
ard for taxation generally The merchant who turns
over his capital of 81 000 nine times during the yssr
pays tar of S96 or 6i0 per cent such capital.
The farmer who invests 81 600 in land, pays n tax
OF four dollars, or 10 of one per cent. Thua the
merchant pays TwENTY-FoUk TIMLs the amount Of
tax paid by the agrculturist on the sams amount Of
property. And even this calculation over rates The
ftrmers taxes as compared with those Of the mer.
chant, since it is notorious that lands in Virginia
assessed at about onehslf their value.
We must examine still further, in order to sppre
oste the mischief of this system OF unequal
Is direct effect, is to reduce the amount Of custom,
and raise the price Of merchandise. Large psnters
aud other wealthy citizens who consume large sup.
plts become each one his cIn importer, and thus
wealthy class of consumers extend little or no ps-
| tronage to Virginia me'chants md escape entirely
the burden of the license tax, the maximum extent of
which falls the poorer class of consumers, who
obliged to buy in small amounts, and cannot import
for themselves. The tax falls heaviest on those who
are least able to pay it, and the merchant is, TO
great extent deprived Of the more valuable custom
OF the large consumers.
And there ia yet another modeof unequal taxation,
the Chief burden Of which is thrown on the commerce
Of the State. We refer to the tar private crsdit.
All moneys loaned al interest are subjected at least
twice to the same tax imposed on land but once
They are taxed in the hands of the last borrower
we'll in those of every previous borrower or lender
If A loans money on bond to B who loans the same
to C, each one is obliged to pay the came amount of
tar az would have paid had he retained the cash
hand; triple tax is imposed on circulating
money single tax on boarded money. The very
opposite policy s adapted to that which aound udg-
ment would dictate If any discrimination must bs
made it ought be against the hoard and in favor of
the loan; against capital, and in favor Of credit,
for credit s the immediate representative of labor
Instead Of this, credit is subjected 10 tax equal to
that imposed on capital in the frat instance, and in.
crsssng In an srithmetical ratio with every subas
quent extension. Thus. in the example above cited,
capital taxed per cent and double that rate OF
tax s imposed credit. II the money should change
hands three times credit would be mulcted twice. if
four times the tax credit ia guadrupled il fifteen
times the tax on credit consumes the whole
legal value of the credit tsef This is what renders
usury laws indispensable as they TO public vel.
fare and private moras go oppressive to the mercan
tile interests Of the State The usury law and the
taxation of private credit taken together constitute
farcicsl contradiction. The usury law presumes
that the extension of credit necessary incident Of
commerce and of society tsef and the same law
presumes that six per cent is the just value Of the
use of money as ascertained by general experience.
The tax act then nerposes to reduce the nett profit
accruinp to the lender, to 560 s. or per cent
oording 10 the repetition and extension Of credit-in
other words it outs down the rate of interest below
tbe lawful standard and restricts the extension of
credit, which the usury law presumes ought, on the
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 g. III, or II per
cent. That which was in the first instance NAHUM
in sc, is rendered by operation of law mere maium
prohibtun, which is consequently, and often must
and ought to be, perpertsted in defiance OF law. We
do not pretend to state that the ta1atlon OF private
credit in the State of Virginia constitutes the sole
cause of the e,orhnt rates of interest said on com.
mercsl paper But we do assert, without fear OF con.
futatiou 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 legislative suicide
We sdduce the taxation of State credit the further
consideration Of which, and especially OF its permit
cious effect on the commerce of Virgins, we are
obliged to reserve for another article.