The Hawaiian gazette., 1880-04-21
Propertx and Taxation.

properly anu AA1AtAOus
Mr. ED1ToR-It is generally admitted that prop
erty is justly subject to fair tax for the protection
it receives from government and that double taxa
ton of the same property IS unjust and unequal,
and it has been a problem in many States, as
property is often defined how to avoid it in some
cases. but it seems to me that the chief difficulty
arises from an incorrect definition of what prop
erty is.
Our Civil Code" defines "real property" to
be all lands and town lots, with buildings struc
lures, and other things erected affixed to the
same.' It defines personal property" to be
. household fur iture, goods and chattels wares
and merchandise All ships and vessels whether
at home or abroad. All mortgages, public stocks
stocks in corporations, and every species of prop
erty not included in real estate"
Now property, personal and real has an Inherent
and intrinsic value in and of ITSELF not dependent
upon extrinsic circumstances or adventitious sur
roundings These modify its value, but it has an
inherent value independent of them all. Lands
buildings, live stock, gold and silver all have in
trinsic values and are property. Whilst notes,
mortgages debts of accounts. and stock certificates
have no intrinsic value and are not property.
They are only evidences of the contingent rights
of the owner, in property, held by some one else.
In case of the failure of the debtor to pay the
owner, his title to the property of the holder can
be made absolute by judgment of the Court, but if
the property be swept away the notes, or other
evidences of debt are of value, but if the notes
burned it does not affect the value of the prop
erty. To tax the property then to the possessor
and the notes, mortgages, and debt to the holder
creditor is to tax the property twice though in
two hands and indirectly. One thousand dollars
of property is not made 5000 by the fiH or con-
tiHgeRt title being held in two hands. An amend
ment to the Revised Statutes of New York to pre-
douba the of
mortgages, that the mortgagor make true
statement to the assessor of what the incumbrance
is, and paying his tax, shall receive on demand
receipt for that proportion of tax fairly repre-
sented by the interest of the person holding the
mortgage or lien. The receipt shall constitute
an offset to much of his Indebtedness on the
property, as will equal the amount of the tax
receipted for" If the mortgagor be under agree
ment to pay all taxes thereon, the provision will
not apply"
The objector says, notes, mortgages and stock
are bought and sold if they are not property what
are they reply they are evidences of the claim
of the owner or holder and of value as q lien on
the property of the debtor. They are not prop
erty but valued for the property to which they
give contingent right. Of stock certificates a
writer says the simplest definition is that they
evidence of ownership of portion of an entire
property. If man have 10000 shares, out of 100,-
900 he owns one-tenth of it" This whole class
of securities, to wit: notes, mortgages stock cert
| fcates, debts of accounts etc., are not
| property, as declared in our statutes and
| the statutes of some other countries but
merely the evidences of certain rights IN prop
erty and if the property itself is taxed then these
should not be matter who is the holder, any
than a man should be taxed for his properly and
again for the title to it. The double taxation in
these cases is largely due to calling these eyi-
! dences of rights property.
For want of sufficient capital in this country
double taxation is peculiarly liable to occur in
another form. Large sums borrowed from
abroad, usually through agents, and in the assess
Sf rfx,f fprta al,f
not allowed to be deducted To illustrate: A..
starts plantation; b. borrows from abroad of G.
| $4,000 for A. who expends it in purchases and
! improvements. A. is taxed for these in full, and
not allowed to deduct anything for his debt to b.
because it is real estate. B. is taxed on AS note
for $4,000, and not allowed to deduct his debt to
| C. because he lives in a foreign country. Thus
the $4,000, of property, is made to pay twice.
First A. pays on the property; second, b. pays on
AS note, as property. Whereas it is clear enough
that there is but $4,000 of property, and if this
was destroyed the note would not be worth the
paper on which it was written
| In this case B. should have been permitted to
deduct his debt to c., due abroad. A. paid on the
! Sf0,000, created III the country by borrowing out
of the country, without which there would have
| been no $4,000 to tax-whilst the Treasury col
lects on $4,000. Most clearly unjust as we'll as
bad policy, dscouraging foreign capital from aid
ing in developing the resources on which the ma
terial prosperity of the country depends, and
which it lacks capital to develop itself.
Our laws need modifying. Double taxes, during
| the past year, have been paid on hundreds of
! thousands of dollars, under the last head, where
! foreign capital has been brought in to aid the
enterprises of the country, as well as under the
first head. Double taxation in any shape, directly
| or indirectly, should be made unlawful, as it is
unquestionably unconstitutional, and the law
should be made clear that the assessor, possess
| ing ordinary sense, need make no mistake in his
! powers and duties in carrying out the equitable
intent of the constitution and so clear that it
would only in extraordinary cases be necessary to
appeal to the Courts to decide what is right. The
equal and Just assessment of taxes in the valuation
| of property requires rare Judgment with unques-
toned integrity. If it were possible to modify
| the present system to secure this, it would be
grand point gained. The revision of our tax
| system should be committed to the best minds of
| the coming Legislature, nor should they ignore
| the suggestions of good business men who have
made finance their study through life. Of course
! the Minister of Finance and Attorney General
would take prominent part III such revision, but
it should not fail to be done and it should claim
the attention of the Legislature early in the
Session possible. Yours DC,
S. N CASTLE.
If the taxation of mortgages were given up, the
borrower would quickly find that he was the one
relieved, and he would have no occasion to ask
deductions from the value of his property and
the country would find that capital from abroad
would thus be attracted here. But we must look
| to Divine Providence-not the Legislature-for
assessors ''of rare Judgment and unquestioned