The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1880-04-28

property and raxasion-No. ..

-.
In my last have shown tha. notes, mortgages.
debts of accounts, stock certificates, &c. are not
property, only evidences of certain rights in pro-
perty, having no intrinsic value in themselves, and
that double taxation happens in cases where these
occur, often, from their being defined as property
which would not happen otherwise. Since writing
that article, have happened on the following
from writer on double taxation from an American
paper. He says, "To the careful reviewer it is
quite evident that the confusion which surrounds
the question of double taxation is directly trace
able to misuse of terms" This was taxing the
evidence, or debit account of bank depositor. as
property, and again taxing the deposit bank for the
sum deposited, thereby do1bly taxing the property.
Does it not seem clear that the confusion which
surrounds double taxation is directly traceable to
defining that property which is not, and which,
If the property, upon which its only value rests,
were destroyed would be worth nothing. In giving
such definitions Hawaii has followed the example
of enlightened Statesand, as in their case it has
sometimes resulted in double taxation of pro-
perty, both onerous and unjust and NAV add,
here, unconstitutional for it destroys that equality
which is contemplated by contributing ''his pro-
portiona share" In one case involving this prin-
ciple the Supreme Court has so decided.
New York seeks to guard against such unjust re-
suits by requiring the assessor, on the demand of
the property holder (the mortgagor) to give him
receipt for such part of the taxes paid to him. as
Will Offset the taxes on the amount morteaped and
this receipt must be accepted by the mortgage in
payment of so much of the mortgagor's debt-un-
less the mortgagor expressly covenants in the
mortgage to pay the taxes.
CalifGnia's new constitution expressly REQUIRES
the mortgage to pay the taxes, and e1empts the
property of the mortgagor to the amount of the
mortgage. Here is the reply, of the attorney, of
the city of San Francisco to the assessor ON this
subject
San Francisco, March p, 1SSO.-Hon. Alexander
Badlam, Assessor for the City and County of San
Francisco-Sir: Respectfully replying to your COM
munication of the 18th instant with the opinion
that under the provisions of Article Kill, Section
4, of the Constitution of California, "a mortgage
deed of trust, contract or other Obligation by
which debt is secured shall for the purpose of
assessment and taxation be deemed and treated as
an interest in the property affected thereby" and
should therefore, be assessed as an interest in land
and be entered accordingly upon the real estate
assessment roll i. e.: A has called real estate
standing upon the records in his own name valued
at $l,OOO-and b has mortgage on the same for
$500. should be assessed on the real estate as
sessment roll for the value of his land, less the
value of the mortgage, and b upon the same roll
fT an interest in such land to the extent of the
n9tgage, the property to be described in full in
each case. Very respectfully, your obedient SER
want, JOHN LUTRELL MURPHY
Attorney and Counselor for the City and County
of San Francisco
The questions will arise, if these are, not pro-
perty, shall they not be taxed at all If the pro-
perty lying behind them, and on which their value
depends, is taxed, then they should not be- but if
the property is not assessed only in part on their
account, then for purposes of assessment and
taxation," they should "be deemed and treated as
an interest in the property affected thereby should
be entered for assessment, as an interest in the
land and placed accordingly the real estate as
sessment roll.' The details must be regulated by
the Legislature will best serve the interests of
the state which includes all who pay the taxes as
well as administer its affairs.
have alluded to the inequitable operation of the
present rule in some cases, which in returning pro-
perty for taxation does not allow the deduction of
debts due in foreign countries. Since its adoption
circumstances have SO changed as to render it too
broad for present general application.
was consulted before its adoption and consider
ed the reasons for it good and they seem to me to
be so now as far as they apply to the class o.
posed to be chiefly for merchandise imported for
purposes of trade and as all property received the
same governmental protection, it was held tn at it
should contribute equally for it, and that the man
whose goods were protected, should paw for that
protection, though he might be indebted for them
abroad equally with the man who received the
same protection, but owed no debt for his goods
out of the country. That all goods, paid for, or
not paid for, owned by foreign consipnors
ShOuld cOntrlbuta their inst for ha
protection received. So far this rule seems equit-
able in Its operation, but new class of foreign
debts has arisen to which the rule does not apply
or to which its application would work great in
justice. From the lack of capital in the country
to develop its agricultural resources a good deal
has been brought in from abroad. To illustrate
again wishes to start sugar plantation, but
not having sufficient capital of his own he applies
to B-(who has better facilities for raising money
than he has) to raise for him the needed funds.
b not finding the funds in the country, borrows
from abroad $1,000, for A, who at once expends
1t for buildings on his plantation, for machinery,
planting, DC, thereby increasing the assessable
value OF his property not only S10000-but more
probably $4,000, for which he is assessed. As
owes the $4,000 abroad he is not allowed to deduct
from his returns, though the whole, and perhaps
double the amount has already been assessed on
the increased value of AS plantation. Thus B
pays on $4,000, which he has not got and A pays
on the same SlOoOo, or more, which he has got,
making double, or more than double taxation of
the property. Without this money from
abroad, the treasury would only have received the
tax on the comparatively small value of the unim-
proved land. With it, it receives the greatly in
creased tax from the improved estate. besides all
incidental taxes of stamps for contracts and other
papers and things inseparable from the improve
ments Is it not clear that in such cases the opera
tion of this rule is palpably unjust well as opera
ting directly against the introduction of foreign
capital necessary TO the highest development of
the resources OF the country Whilst its applica-
ton to the class of which gave rise to it. is
entirely equitable, this rule then needs modifying
1t Is too broad for in all cases. and the assessor
needs discretion in its application, that under
no circumstances it shall be applied where the re-
suit will be double taxation of property, though it
be in different hands as illustrated above.
note the statement, that some of the States of
the United States have adopted the practice of
paying the taxes semi-annually with much salts
faction TO the taxpayers who find it easier than to
pay all at once. If paid all at once the money lies
in the treasury for gradual use during the year. and
Its seml-annual payment has worked we'll. With
the slncerest desire (no doubt) by the legislatures
of the various States to equalize taxation results
have proved that they have singulary failed to do
So and 1t Is not singular that have not succeed
ed better than others. 1t is perhaps often felt
that there are two parties, government and people
but 1t IS well to remember that there is but one,
and no diverse interests III the state. The dis
burser of the peoples money, who appropriates
one dollar to any private object or to promote his
own selfish ends, is criminal and proves himself
unfit for his trust, whilst the tax payer who would
evade the payment of his just proportion of the
necessary taxes for the public benefit is also Grim
lnal and unworthy of the name of citizen
Our revenue law is imperfect. 1t needs revision
to make 1t work justly, and hope the coming leg
lslature may succeed In improving it. Light is
gained by discussion, and l hope the subject may
be freely discussed for the common good There
are other points which / must pass by, but which
hope may be presented by others. This is no
Irrt NH