Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1880-12-15
Life Insurance Taxation.


Mr. Editor An argument by A. P. Childs,
Esq, Of Bennington, before the joint com nittee
Of ways and means last Friday evening contained
the following points against the proposed life in
surance taxation bill of Governor Page: "No
exigency or military necessity exists for such
taxation in Vermont upon the mutual life insur-
ance companies, which are simply associations of
policy-hoders for mutual protection. We have
no state debt, and the policy of this state has
always been against extraordinary taxation,
which tends to waste extravaganza and corrup-
ton The effect of such legislation would be to
increase the cost Of Insurance. for the tax II i'm
posed, is, in equity, charged against pocy-holders
in the state where imposed. 1t would be double
not single tax; most OF the reserve Of lie nsur
ance companies fully ninety-seven per CENTS
invested upon real estate and government securi
ties, which are already taxed, or exempt by ex-
listing constitutional provisions. Forty years ago
the last vestige OF such taxation was swept away
in Great Britain, and has never been re-imposed
Every nation of the civilized world maintains this
wise policy Sixteen years ago, the matter ably
argued before the committee OF ways and means
of congress. Thaddeus Stevens and George f.
Edmunds were members of said committee and
it was unanimously decided that the income Of
lifensurance companies is not proper subject for
taxation. policy of insurance is not tangible
visible property, and, at the most only represents
an estate in expectancy" that may never be
realized. 1t would be a tax upon thrift and the
evidences OF natural affection, not property
| simply tax upon the policy holders OF this state
largely poor men, collected through the compa-
MES 1t is in the nature of an e1 post tacto enact
ment TO confiscate by annulling an existing con-
tract. No state has so legisated except upon
some real or fancied emergency, and the United
States, not even during the war; resorted TO such
confscation OF the urtiss Of mutual life policy
holders. The imposition of such tax would de-
ter thousands from insuring, and tend To promote
poverty and consequent crime. mortgage
owned by foreign investor in this state is not
taxed Why should the income from mortgage
to secure policy of insurance upon life to pro-
tect ones family from want and misery be taxed?
Life insurance in no sense represents property
in possession or enjoyment; for the use and
benefit OF the holders Of policies it represents
debt obligation; when vested, by maturity, 1t is
properly taxable. There is no such thing, prop
erly speaking, as a dividend upon life insurance
premium; a return to the policy-hoder for over
payment is made, thus decreasing the cost OF in
surance IL interest be higher, or mortality and
expenses lower than estimated, this return may
be exhausted upon reverse of the above expert
ence, and even the required four per cent reserve
of the companies impered. Life insurance re-
moves nothing from the taxable property Of the
state Its beneficence Ia Vermont Is verified by
hundredso OF thousands Of dollars paid in death
claims, shield against pauperism and its twin
ally, crime Wise legislation will foster not him
der, the benefits Of this noble Institution.