The sun. [volume] (New York [N.Y.]) 1833-1916, 1879-04-07
THREE TAXATION BILLS.
UH.iI SOME or THE INCONGRUITIES IN
IWO or THE MEASURES ARE.

lUO OF fhE uE6othEo AHFs
Trying 10 Revise the System or Assessing Cor
porattons-rhe Rule Of UnIrormIty and
Equality violated InhnrmonIuua ProvI-
sions Pointed Out-TaSes on Mortgages.
Three bills are before the Legislature for
The revision otthc system OF taxation especially
with reference to the assessment Of corpora
tons. One has been offered by Senator Har-
ris. another il the result Of the labors Of the
State Board " Assessors. and appears through
the medium Of the House. while the paternity Of
the third is credited to Assemblyman Strahan.
though it has been introduced in the Senate.
gentleman of this city who has made tho
theory and application Of taxation n study dur
Ing many years. and is recognized as one OF the
highest authorities on this branch Of govern
ment says OF the latter two bills:
4 FUNDAMENTAL ERROR.
"The House bt seems to ombody all tho errors
and vices and follies Of the existent tax laws.
supplemented by still greater follics and errors.
Equality and uniformity Of burden on all inn
mediate competitors is the fundamental prin-
cipal underlying all taxation. This bill violates
this fundamental rule. BY It capital stock Of
all corporations is taxed. after dcducting from
The market value OF the stock the value OF the
real estate owned 10y the corporations the taxa
ton of which is otherwise provided for. Now
lc, us see how this rule will apply ia respect to
two railroads. Tho value OF the capital stock Of
The New York Central Railroad Company is
moro than 800 600 600; its real estate is asses
sed and valued at much lcss than $50 100000.
Tho difference between the value Of the real es-
tate and the market value Of the stock will be-
therefore. $50 900 900. which must bc assessed
either in Albany or New York. IA the cities
wherein are located the principal business Of
fees of the company. Now. the New York and
Eric Railroad Company owns. perhaps. in real
estate t2j 900 600. and its capital stock to-day
is not worth t2O.O00.O00 market value; thcre-
fore the real estate cannot be deducted from
the capital stock and 1t leaves the Eric road.
under the law free from all taxation upon its
capital stock or shares Is the rule OF uni
formity aud equality enforced in this case?
Take another illustration l know Of two gas
companies In this State The capital stock Of
one is worth 100000 the capital stock of
the other is not worth $4,000 The real
estate Of each ia worth about the same
amount. say 100000. These produce about
tho same amount OF gas annually. Now, under
this law one company will be taxed the differ
once between its real estate and capital value.
$500 O1O. and the other taxed nothing. The in.
equality ~ taxation on the shares OF railroad
stock under this bill. arises from the fact that
one corporation Is heavily indebted, while
another S but small amount in debt. There
nr- many roads IN this county which are al
most entirely built on bonds held In foreign
countries and not subject to our taxing power
and their shares have not a dollar Of real value
and the shares Of such roads or the roads
Nenls Ives. except as realty. under the opera
tion ~ this law would be entirely exempt from
taxation. There are businesses which could be
just ~ well done by private individuals "a cor
porations. Manufacturing companies. for in
stance. derive no particular advantage from
having corporate powers, But this law I'M
poses "a burden upon manufacturing corpora:
tons which Is not imposed on or executed
against individuals engaged in the same class
OF mannlqcturng. One newspaper may be
published by corporation and be subject to all
the vrxatous burden OF this bil-lnclnding an
appraisement OF tho good Will ana profits ~ the
concern-while another newspaper. equally
valuable and profitable, owned by n private in
dividual Will be subject only TO such taxation as
Is now irregularly ana to merely nominal
amount imposed upon personal property
WHO PAYS THE TAX oS BORROWED MONEY?
"But the violation oi the rule Of uniformity
and equality Is still more manifest IN tue np-
phcatinn of the law To the case of persons in
debt. This hill permits no reduc!on on a., &
burden Of taxation upon the lender, but let
Us -"e how its operation would be IN point
prev'ut the lender from collecting tho tax
to which he may be- subjected. In the form
Of an increased rate of interest imposed
upon the borrower. Persons do not lend
money for amusement or henevolence. hut ioI
rcmun.rnti0n and un Ter this law there would
he o direct discrimination against the borrower.
IN this country Il would hn a hard rule that peo-
pie eud"Hyoring to acquire property should be
his ohstructon w6uli be. Tho poor man
WHO should borrow $1,000 70 buy $4,000 worth
lender must pay tne tax on that borrowed s. ODO
in the form of increased interest On the basis
OF tho rate OF taxation in this city, that would be
q por cent And On the property that he buys
VIII those s5 900 he has % per cont. more TO
pay L. other words MS taxation ,am9unts
practically to 3 per cent. ButsuppOse Mr.. Asior
buy- that IS. 900 worth of property He does not
have 10 borrow the money and hc only mas TO
hc rule OF equality and against the aspiring
poor man. The people q this State will never
tolerate any such law AS that. As an evidence
Of how fully this fact that taxation inevitably
lals upon the borrower II recognized by the
pighest authorities, take the decision OF Chief
Stat. tax on tho holder OF United states stocks
He said: The right to tax the contract TO any
exiInt when male must operate upon the
power to borrow beiore 1t s exercised.
The tax on Government stocks is thought by
his court 10 be tax on the contract, tax ON
United States
wRoSaING OUR OWN CITIZENS.
The provisions Of this bill affecting corpora
lions are yeIati0us, inquistorlal. and cumber-
monous provisions. Different and contrary
principles q taxation are adopted In me
same hili. In one section. capital Invested
Il banking or other business In this
State by non-residents Is treated as not
following the person, put subject to taxa taxa
Section concerning the business OF Lending
money In another state through an agent. IN
whose hands the securities are held. and VINO
triuyasts the money for the resident Ol tnls
hmta the rule is adopted that personal proper
y and business done in another state follow
~ person and the res dence Of tho owner in
h's state, These provisions are entirely ire
eoniileHe. debt is not property. II + the
eyien'e Of business, or Of TRANSACTION
anl n9thing more. The purchase Of farm
tior the iull value Of it creotes no prom
cry; but this law treats such mort
Ease rs nat properly made by the. decree OF
th" Legislature u the State of New York. eyen
Sl'n the contract is made, by and under the
avs, 9i another State. This bin not only makes
Imaginary property. but after creating i'm
~ NHry property gives that property an i'm
Agnary stas. ior tho purpose Of imposing an
hi'tlrpry eXartlOn upon the man VINO happens
lo.N- IN this State and lends his money Ia an
o. rr state. The amount Of burden which any
eli@ru "i this state may be subjected = under
N rule established by this law will nave no
bounds. except In the imaginative and poetic
eapuHty u the legislator. Until the Legislators
rh9nauye power is exhausted FIAT property
Doe oreatcd and the citizen arbitrarily taxed
o. h!s property conhscated. II Is probable
!iAt iIe United States Courts would sot ASIDE
4 suction ~ the bill rs in violation Of tho
T.. hI Constitution. Ii IL an attempt 10 nsurp
lAr1J4HNuu over business and property IN Other
ffI'N-. Ina Emitted States Supreme Court, IN