The Hawaiian gazette., 1882-05-17
4aluaiiait Gazette.
WEDNESDAY. NAY u, lssl
Taxation.

ton more just and equitable, and to avoid any
misconstruction which can lead to double or
unjust taxation. do not know that there is
any difference of opinion amongst intelligent
men about the object of taxation or its general
principles, the former being to carry on the
necessary work of government in the best and
most economical manner, and the latter, that
all the persons and property benefited by il
should contribute their just proportion towards
it. In other words, that all persons and prop
erty should pay uniform rate to defray these
necessary expenses. No law should Be al
lowed to he so construed as to permit double
or unequal taxation, as contrary to the equity
and intent Of the constitution, and violation
of the first laws of Justice
The necessity of taxation, and the principle
upon which taxes should be levied being stated,
the best method Of assessment and collection
remain TO be considered.
Personal taxes are those levied specifically
upon persons and for specific objects, as the
poll tax, the school tax, the road tax. Prop
eriy tax is that levied upon property, and is
usually upon all property not exempted by
law, aud at a uniform rate per cent.
Property is, technically, something tangible
1
purposes Of taxation, it consists Of whatever
has money value in the market, and what a
man is worth is what remains after all his
debts are paid, apd this is the sum upon which
be should pay taxes. Simple property excludes
evidences Of debt, as notes, mortgages, etc, as
these derive their value only from the claim
they give TO the simple property of the debtor.
| If he has none then they are without value
to the creditor. If he has property Of certain
| fixed value, then these evidences are COED, to
the extent Of the value Of the simple prop
erty owned by the debtor Here may be
two methods of taxation, both Of which will
do essential justice TO the taxpayer and
state One would be for the owner Of the
property TO pay the tax upon the whole,
and collect back from the creditor the amount
paid upon his claims The other would be
to deduct these claims from the value OF
his property and pay the taxes on the bal
ance, and for his creditor TO pay the taxes
upon the amount of the debt due 10 him. Both
of these methods would be Just, giving to gov
eminent its full due, and doing justice to both
taxpayers. But for the owner to pay on the
whole of his property, and the creditor to pay
upon debts due to him, would be double taxa
tion to the extent of the debts from owner due to
him, though paid by two parties. The last meth
cd of the two named, is the more common way,
and accords with popular feeling, and perhaps
for that reason, is the most expedient. The
simplest and best of all systems is, think, to
tax all property, wherever found, TO the per
son in possession. 1t is said, the debtor. as
rule, is always in possession, and hence, the
debtor, who is least able to pay, must always
pay, whilst the money lender goes free. This
would be valid objection If it were really
true, but, though apparently true, it is not
Al
property owner, who is the borrower, always
paid the taxes, it would, by an unalterable law
of finance, diminish the interest by the amount
Of taxes from which the lenders money was
freed. So that the lender would net the same,
and no more, on his money; for, whilst he
would receive less interest he would have no
taxes TO pay. The borrower would pay only
the same, for, although he would pay the
taxes, he would pay loss interest.
The relative position of borrower and lender
would remain the same, the former would pay
no more and the latter would receive no more.
This method is the simplest, and entirely
equitable as between borrower and lender and
the state, as it covers all property, which is
all the state can claim, gives to the lender
his due, though his interest is less, yet ho has
not the tax to pay, and costs the borrower no
more, for, though he pays the tax, he pays less
u
render unnecessary any inquisition about debts
or the internal business of the taxpayer, often
reluctantly given. 1t would render unneces-
sary any inquiry of the merchant about the de-
ductiOn of foreign debts, for the whole property
would be assessed, whether paid for, or not.
This method is the simplest of all, doing full
justice to all, and least of all, liable to abuses,
but it does not have the popular approval, be-
cause it is not understood, it is untried. 1t
is the principle upon which Mr.. Preston's bill
in the Legislature of 1850 was based, and that
bill did not receive the Royal sanction; and,
although fully demonstrated that, under the
inexorable laws of commerce, it cannot favor
the lender at the expense of the borrower, yet
popular feeling, sustained by legislative acts |
and Judicial decisions in enlightened lands, |
seem to render it expedient so to revise and |
amend the old law as to correct the abuses |
arising under it, without attempting a new de- |
parture under what seems simpler and better |
method.
1t seems as though there could be no dues- /
ton as 20 what is the simplest and best method, |
and the least liable to abuse from misconstruc- |
ton of the law, but under the popular feeling |
in favor Of the old method, and especially the /
feeling that the payment of the taxes by those |
in possession, usually being the debtors, favors
the creditor at the expense of the debtor, it is |
a question whether it is best to try the new |
system though to the Teasoner its advantages |
may be clearly apparent. The most difficult |
point for the popular mind to realize is, that |
it does not favor the creditor at the expense Of |
the debtor, for the latter to pay the taxes. 1t |
does not realize that money, seeking invest |
ment will accept lower rate of interest if |
there be no taxes to pay, and that what the |
borrower pays in taxes, lie saves in interest, |
al hat t,,NN q L
saves in exemption from taxes, Just as money /
lenders will invest for less in government |
bonds exempt from taxation than they will in |
private securities subject to be taxed So that |
the relative position of debtor and creditor re-
mains precisely the same; the creditor has |
no advantage from one above the other, and |
the debtor suffers no disadvantage in the one /
moro than the other.
The real advantages Of one over the other |
are, that with less opportunity of defrauding |
the state by conceament, it, with equal cert |
ainty, secures to it all of its Just dues. IL af-
fords to taxpayers, lie they creditors or debtors,
a stronger probability of exemption from double |
taxation by misconstruction of law. 1t re-
lieves the taxpayers from the liability of any
iDfuisitorial investigation into their private
affairs, beyond a just statement of all their
property having money value, and comprised
cnleuy III JANUS, tOWn lOtS DuliQlngS, furniture,
goods, chattels, wares and merchandise, ships
at home or abroad, moneys, growing crops.
animals, bonds, etc.
These are real advantages, the method is
simpler and it offers no advantage to one class
above another, but with all its real advantages,
the Legislature may not deem it expedient to
try it, One thing l am sure they will be dis
posed TO do, that is to correct present abuses.
l will repeat, there are two systems, either
Of which will, if faithfully administered, do
justice to the state and all taxpayers, be they
debtors or creditors.
The first aud most common is, for all prop
erty to be valued, including all debts due to
him as part, to the holder, and for him to
deduct therefrom all the debts he owes, and be
assessed upon the balance that remains, which
is his property. The second is, for the holder
10 be assessed for all the property Ia his pos
session, mol including any debts due To him,
and not dedHcting any debts which may be
iue. from him to others.
The second method is the simplest Ii re-
urns the whole property; it makes no returns
If debts due 10 or from the taxpayer If it be
'aid that good debts are property and should
De returned as property, reply that the man
who owes them will not deduct them and return
10 much more, SO that the returns of the ttro
men will be just the same by either method. |
Thus by the first method A. returns
8, 900 in lands and goods, and $1,000 in
,ood debts due to him, equal to $1,000, and