The Hawaiian gazette., 1881-08-10
Taxation.

beg 20 present some thoughts upon the subject
even nj the risk Of repeating what have before
said some OF the defects cannot be remodied with
out legislation OF the action Of the Supreme Court
hut Others can and should be; they we're intro
duoed without Legislation, in their working they
have been found TO contravene both the Constitu-
tion and laws, and if So they should not be
continued
Constitution is defined to be, "a system Of
&" fundamental rules, principles, and ordinances
d" for the government Of State or Nation. In free
g stats the Constitution is paramount to the
= statutes or laws enacted by the Legislature
limiting and controlling its power. In the
United States the Legislature is created, and IFS
powers designated 10y the Constitution. 1t fol-
lows that any law which in practice is found to be
inconsistent with any principle Of the Constitution
j. void. and is declared 50 by the court, occa-
SION, or nullifed 10y legislation. II also follows
that any law admitting Of two interpretations or
constructions, one of which, in practice would be
Inconsistent with any principle of the Constitution
must be interpreted 50 not TO conflict with it
nov the principles Of the Constitution demand
equality in the distribution Of the pUblic charges,
that an should be taxed alike 70 meet them. If
therefore any rule OF law is found, in its applica-
tion. 10 operate unequally upon one more than
another fueu II a fhlt ltI liAl oHeN ~ laws ~
should be nbrugated and If n la7. II should be
rgmedied al the earliest possible moment by re-
r-.sal or the court The wrong has n remedy, and
Il should be applied at the earliest moment Begis-
laturs are failible and in making laws do not al
WAYS see Just what their operation Will be neither
do executive officers empoweled by Law TO make
rules within the law, always see the bearing they
may have In their application 10 existing laws
Now the rule bv which debts due TO foreign
creditors cannot be deducted, like debts due III the
Kingdom. from the returns made Of property 10 be
taxed. was made 90 meet n specific class OF cases,
and when applied TO another class did great IN
justice. by bringing upon the taxpayer double
OF treefod tax, snd IN the very nature OF Its APP
piicaiion, might bring a much heavier one sun;
lis application. if as general rule, has no h1ed
limit and should never be applied as general
rule. A note worth $1,000 but with a high credit
might borrow for b ssJ0.0JO-the latter might eN-
pend the whole IN valuable improvements ana De
taxed uuon S50.O00 whilst A would also be taxed
under this rule on that sum besides his SlO,UJV-
but in cases like those, whose supposed existence
gave rse TO the rule IN lo0l' q 90 oI slochs, .!
rnads bought on credit and receiving Government
protection like all Others, 1t would give 10 the
troasury only its just dues for that protection
The property tax first imposed was i of 1 per
cent hen =. The practice then was 10 assess as
uroperv every species usually so designated as well
a. all solvent debts, whether OF book note or
mortgage but allow the assessed party TO deduct
from the aggregate all debts due from him TO others
the balance remaining, being the sum of all hls
tr1uarfv 10 be assessed. The rule OF 1867, was
adopted TO cover cases Of the kind above men
essential justice TO the tax payers ana Government
the assessors complained that the mortgages De
inc mostly held in honolulu, the deduction Of the
mortcaged estate. left 20 t,in the work OF assess
neut hut gave 10 the Honolulu assessor the com
rfnsation which should be theirs, and the COM
plant seemed 70 be just. The law OF 1876 was de-
SIGNED 70 remedy tins seeming wrong or equallty.
II made all real estate assessabie IN the dis.rlct
where situated irrespective OF any lncumbrance
which there might be upon II and the word mort
cage. was dropped from the definition OF property
and .' unsecured debts substituted IN It's place;
o. qr0f double fHrafiUH oil the same properly HoI'
II che estate must be taxed III Its district, then 10
Tax tn mortgage also whose only value lay IN the
conditional and preferred title 1t gave 10 the estate,
would be a double taxation of the same property.
Under the former practice Of deductmg the mort
rsne the estate paid taxes only ON such pornon as
remained. after the mortgage and all debts were
deducted, the mortgage paying lhe rest ms :
according 10 the law just passed III the State OF
Massachusetts. II is the general practice now IN
California under the new Constitution. money Is
quoted IN the papers Of to-day. " Money fO' mort,
rngfs aH cite real estate, f1es 0 tf eg"ofd"ttfa
u % -s- rsHf beilg equal 10 o ~ the OOlTOiref.
rrbis and the new Massachusetts law corresponds
exactly with the former practice here In both
rsses the tax is paid by the lender but who shall
,itiuotelv bear It, usually depends on private ar
rnnement between the parties, that Is, II the es7
So raid the taxes instead of the mortgage II would
1,sv 50 much less interest, and vice versa-Ihe
r-ctice here before the law OF le16 and the pres
- 1lractice of California and the recent law OF
Massachusetts, is simpler than the practice here
now under the law of 1876. Whilst the former prac-
sioa did annie Justice 10 the government there Was
- liability Ct injustice 20 taxpayers. Under
80 law of 1876 the Taxpayer Is not required TO re
Turn secured debts property, for the reason that
tie property, upon the debt secured, beng gen
sll, ,.al estate Is IsgHired. by the same law, TO
nav the taxes. This was INTENDED 70 prevent
double taxation by the payment on both the prop
erty and the security and whilst II mas done SO IN
.,,,s-iec cases IN others. numerous, the law
r,r,hilitinr the deduction OF anything from real
f4fe ral,tes. for debts due 10y the owner, has un-
slynidahly led 10 double fgrnff0H, contrary 10 the
intention Of the law, ana III NlolAtloh OF inc equity
isns- ~ the constitution. The deduction of uebts
from he inventory of property Is allowed TO the
amount Of the value Of The personal properly, Out
n tbe debts exceed TINS amount, nothing can be
deducted from the value of real estate as an Offset
III aauble taxation. under tins law, Is necessary
rsult for Just what the debts exceed the personal
property. for example, A. has real estate Nalueo ~
siaiOl0 and personal property valued at S2o,O00.
lfeo,res b S550O00 but has gwen IS no securlty-b-
must return his unsecured debt OF SS0OV. a. re,
surns ms real estate ut SlUOOOO and his personal
,,-,r.srty nj ~g5000-but he deducts from MS uept
sl,a01 The value OF his personal property but can
nj deduct ANYTHING from the real estate value, he
fber-i1re pavs ON $4,000 and h pays ON ms $50
~ Prior 10 1916 A. would have deducted his
,-sole debt Of $4,000, and paid tax upon Stow
,rbilsi r. as now pays on MS S5OOOg-at present
there Is double payment on SZ5OVO. IN the ABOVE
casa law. which cannot he executed, without
violation Of the principles of the constitution must
j. snrnustitufional-bu although tins Is self evil
dent and although, 4 Is k1ioirH 10 nave unJusuy
"a tsuronefifutiOnally wronged lnOlNlOual TAX
sr lf thousands of dollars II cannot be set aside
lifbouf a decision of the court or legislation, but
NE sfil b. executed-continuing the intilchon
~ its wrong on individuals. Not SO, the RUE III
ncf to foreign debts. That is not the creature
- The law or the constitution, but IN us operation
3yerss to the latter. and the power, that created
il should annul modify IT, 50 that II Woulu cease
=, do che individual wrong, which II mas oOne nor
,,ben the wrong y kH0rR, Is Il suinclelt reason
F,r is continuance. and the continued wong done,
f I4ssri 10 T. done. to individuals that Its abro-
s.sio-l NAV hv the fraud feared from individuals
f,rinr some loss to the government is the tear
that some loss may accrue TO the treasury from
dishonesty OF persons a reason why the govern
mont NAV continue TO pcrpetrate G1oifH wrohg
--non innocent persons ~ CONFIRMATION OF Tue
r,-snciples of the constitution 10y which II Il gov
,-rned Ii the treasury should suffer all the pos
Isl. ires which j. fears from individual dishonesty
+f,ere Il not a prubability that 1t woUld equal IN
snlo1iut the loss which individuals have suffered,
fron the unconstitutional operation Of tins Iule,
and cannot feel that It is not as wrong Tor the
government 10 efraud individuals as II IS Tor IN
sliviouals 10 defraud the government ms rue
should De- altered OF modified Gf once, ana the law
sbopld be amended set aside, as soon as possible.
The simplest and best law Is TO tax properly
herever found. to the person IN possession as IN
s.,aueed mo the Legislature OF looO, by MI fres-
~ r, the next simplest, is 10 restore the practice
~ IL ,Egs Trior 10 1876. and If need be- 50 to amend
me law as 10 conform ii TO the practice.
F,issruyrd debts leaves all secured aetfs out OF
The list OF property 20 be returned, without limlta-
HHa