Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1880-03-03

1 say that the certificate is no more part Of the
corporations property than the note Is part OF my
tangible property. The distinction between Al
| artificial person created by law and the
natural person is just great as the distinction be
tween natural person and another, and 1t exists
in law. The distinction is wide that il cannot be
disputed, nor can it be argued around. You canno:
get out of it T certificate can be sold, or 1t can
be transferred II is property. not the evidence OF
the title, like the deed, for your Tlace Now, what
| is the distinction The majority OF the committee
come in here and tell that it is like deed-thaf
| it shows mans interest in the property say
| that deed is nothing more than muninlent OF
title, that 1t is only evidence OF title, while the GER
tfcate of itself is representative of value. The
holder OF certificate cannot enter into the posses
sion of the property OF the corporation His action
is against the Directors personally Say there IS no
distinction tell you that these distinctions are as
broad III the law distinctions in all other Ia. g.
and it won't do to try and destroy these distinctions
But | come down further, and say
! that if the certificate is the same property that
it represents we tax it to different persons, and
therefore it is not double taxation For the sake of
the argument win admit hat the certificate is TIC
same property, but if it is the same property
it different individual at least that is my
| theory and propose to carry it out. introduced
bill here ing out that theory at the beginning
of the session Ii it is the property and is as
sessei to different person it is not double taxation
You assess all the property OF the corporation to the
corporation itself and the stock to the shareholder
When you do this say that you get rid Of all these
complications on the subject OF double taxation :;
D
| clear as the nose a mans face. So you must
deny both propositions before you can reach the con-
cusion that IL s double taxation to tax the property
to the corporation and the stock - the shareholder
| Now sornu say: 'Why, y 10 compose the corpora
| tion? Don't the stockholders compose the cor
I poration; and if you the stockholder
and the corporation too, it is double
taxation, of course" Well, now let us see A
| corporation, as we all know, can sue and be sued
| 1t has perpetual succession, something that does
not exist with natural persons To all intents and
ard under government, the distinction exists, and
| if deny the distinction in taxation then
| deny the distinction everywhere, and allow the Di
rectors and The stockholders to bring suits in their
| own rames and not under the name which they eau
| sue in the Courts. We must deny them
| perpetual succession. If you deny this
distinction in corporations, il you wish relieve
corpor alton by this distinction from taxation, then
| why not wipe out the other distinction and give
them other privileges. III they have more priv
eges than natural persons let them contribute their
proportion to the Government.
There has been good deal said about the theory
OF the Constitution. | take the broad ground, and
| do not deny and never have attempted to deny,
that the Constitution itself provides differ
ent theory for The taxation OF nat
ural person under circumstances
than the taxation OF corporation. And how did
reach that conclusion! And | say it is just, end
believe can prove that il is just. We all recol-
lect that when the COnstitutio ai Convention as
sembled that it is that corporations ther
unpopular There seemed to be an intent to make
a raid upon corporations but the raid did not so
far as some men feared it would go. 1t was not
necessary to go any further than the Convention did
go. Some OF its particular members perhaps would
have done so, but the good sense and state
ship Of majority OF that Convention gave us
the Constitution in its present form. Now the
Constitution says that where the owner OF land gives
mortgage to his nelghbor that the mortgage, for
the purposes of taxation, shall be considered in
teres i'll the land, and the amount of the mortgage
shall be deducted from the land. The Constitution
further that debts lOna fiIe residents
of this Sta NAV be deducted from mans assess
ment. Now where the Constitution provides that
franchises and stocks of corpora ions shall be as
sessed, they do not provide for any rebate they do
not provide for any subtraction Of the amount of
stock from the property of the corporation. Fur
thermore, the Constitution says: "a mortgage,
deed of trust, contract, other obligation by which
debt is secured, SHALL for the purposes OF assess
raent and taxation, be deemed and treated an in
terest in the property affected Thereby. Except as
TO railroad and other quasi pub ic corporations, in
OF debts secured, the value of the property
affected by such mortgage deed of trust contract or
obligation, less the value OF such security shall be
assessed and taxed to the owner of the property
and the value OF such security shall be assessed and
taxed to the owner thereof in the county, city or
district in which the property affected thereby is
situate. ' Railroad and other quasi-pubic
p0rations." Now / say that the trainers of the
Constitution, if they had intended the deductions
made by this minority bill even provided in
ton s. or If they had INTENDED the deductions pro-
posed by the pending amendment, they would
So and say it is not the theory of the Constitution
that it should be done Now il is said that the tax
alton OF corporations in any other manner from
what YOU do an individual is unjust. Well | DO not
believe it, and l will tell you why From
the DAYS OF the formation OF corporations
in England, doing business by and through
a corporation hes been generally prohtable. Why,
slr, The kings Pnd gReens and m0nsrchS OF Engisnd
when shey s1anted specisi charter to individuals
to enter into business, always retained to
themselves a part Of the profits OF the concern
ns,I naxc t-eriaI To-
charter at those rates. And such practice has
come down to the present day. 4 tax has been
levied upon corporations for the privilege of doing
business in that kind Of way For instance, IN Ken
tucky to-day OF 80 cents upon every SIOO-sharc
is levied to be paid into the State treasury. What
that? 1t is tax on the franchise it is upon
the existence of the corporaton it is tax for the
privilege OF being corpors ton. IL perhaps is
small comparatively, but it admits the principle
We have in the States of Delaware, Rhode Island
and SOME other states, laws that certain corpora
tions shall pay to the State certain per cent of
their gross earnings annually. What is that2 Why,
it is tax upon the franchise; it is tax upon the
privilege of doing business a corporation.
We nave in our Constitution to-day provision
that an income tax may be laid upon persons or
corporations, or either. We can levy an income
tax upon corporation and not upon the person.
The Senator from Sacramento himself, this morn
ing in defending the insurance bills gave as one OF
the reasons why he is in favor of it. that it leves
an income tax upon insurance corporations Now
do not hear he is in favor of levyng an income
tax upon persons who have an income of S. 900 and
over.
Mr.. JouYsoN-The Senator will remember that
expressed myself in favor Of an income tax last
Friday, and also that proposed income tax in
the committee and it voted down.
Mr.. SATrERwIIrE is what am drivi q at
The Constitution provides for an income tax and
the Senator says is not unjust say it is double
taxation, in the sense that the gentlemen define the
expression "double taxation" / am in favor Of it.
nevertheless. IL is the theory of the Constitution.
say that the Constitution permits the Legislature to
levy q different tax upon corporations than it does
upon individuals when it comes to an income tax
Mr. BAKEn-Do you believe that the Constitution
provides for or permits double taXation2
Mr. SA1TERwHITE at permits double taxation OF
property the same year-yes, do. 1t permits the
taxation of the property twice the same year,
but not to the same person. Now, another reason
why the Constitution is just when it says different
tax may be levied upon corporations than upon in
dviduas. say the corporations have greater priv
ileges than the persons Having greater privileges
than natural persons, it is right that this State
should make them contribute more. What are
these PRIVILEGES? One is perpetual succession.
What did the Governor of this State say when he
was canvassing this Statef He said that his part
nershp in running Steamships formed corporation
for convenience-because if one died it would not
be necessary that his estate should go into the
Probate Court that the corporation would save his
estate from going into the Probate Court, and the
business could go on. There is one conyepience
Here is one great benefit and great advantage that
the corporations have Ihat Is not an that is only
is the part of the sovereignty of the State Itself
the right of eminent domain: the corporation can
take my property for its use No other power on |
earth but the sovereignty OF the State can take my
prop rty for its use There is man in the State
of California can come up to me and say have got
to sell my property to him at its appraised value.
The corporation for the purposes Of the business in
which it is engaged, may exercise the right of en- |
inert domain one OF the powers of sovereignty |
itself Having these great powers and these grea5
nfiyileges | say th.t it is nothing but |
inst and right that they should be /
taxed diff ring from natural person, and how
Won avoid the distinction Give the privileges |
that the corporations have and then you destroy the
distinction and your argument is good. Then do |
not talk to me about unjust taxation. Hold the |
corporations down to the rule that you do the |
individual person The argument won't last. The |
Constitution under which now acting cannot |
be successfully attacked upon that principle To
the language Of the Governor of this State, they
able to standit What does he say !? Why, the gen. |
trnan says, that you must not, because one man |
is more able to stand taxation than another, |
YOU should not heap it upon him The |
Governor himself says We should levy income |
tax upon persons having an income exceeding S. 000
Why? Because they able to stand it. agree |
with the Governor; they able to stand it. The |
Governor is right 1t is good doctrine. 1t is the |
doctrine OF the Constitution. Now l acknowledge, |
Mr. President that 1t is perhaps the study OF lie
time for man to become expert on this subject OF
revenue and taxation. acknowledge that we all |
have crsde ideas about them. Perhaps none of our
theories are exactly Just But excuse for arguing
a all. for advancing ideas IL |