Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1885-01-09
az he tasabls vaIas Of ri. class Of prop

tain the taxable value Of his class Of prop
erty.
The following extracts touching this sub
ject are OF special interest: "The property
Of a corporation should be taxed precisely
as the property of an individual
1t is necessary to rid the public mind OF
an idea that 3 corporation is better able to
pay than an individual holding the
same amount and character Of property.
A corporation is a legal person and
should be treated by the tax laws like any
other person. There is no season why q
corporation should not list its property pre-
cisely as the same property would be listed
ifewned by an individual
Assuming that q corporation, acting
through its proper officer, has actually listed
all the property owned by it, then the COM
pany pays q tax on its property. We must
distinguish between the property which is
owned BY an individual; the property OF the
corportion is one thing; the property OF n
indivi6ul, who holds q share OF stock, Is an
other thing. A share Of stock is q piece OF
property which is owned by an individual.
The corporation must pay taxes on Its
property and the individual must pay taxes
on bis property. A share of stock is an
item Of property entirely distinct from such
property as is in the possession Of the cor
TO alton.
1t is not taxing the same property twice
il the individual shareholder pays q tax on
his stock after the company has paid a tax
on the property owned by the corporation.
Many false ideas prevail about this matter
and it is important to inculcate clear-cut
views.
When a corporation is dissolved all OF its
property must be sold; its debts paid; and
whatever of the money (realized from a
sale of its property remains, must be divi-
ded between the stockholders. A share of
stock represents and is evidence OF two
things, to-wit: -.
~ The stockholders right TO partici-
pate in such dividends as may be declared
by the company; and,
Oh The stockholders right to receive
when the corportion is dissolved q part Of
the money which may remain after its
debts are paid.
If the right TO participate in dividends be
separted from the right to participate in q
division ofthe corporate property, then we
may tax the one without taxing the. other.
Taxing the right to participate in the dlvi-
dends is not taxing the right to participate
in a division OF the corporate property.
Taxing the stockholders right to participate
in the dividends is not taxing the property
which is owned by the corporation. X
We propose that It's taxable value shall de-
pend on only one of these elements; we
propose that the taxable value Of a share of
stock shall depend only on the amount OF
dividends during the year preceding the as
sessment; we propose a rule OF valuation
which will eliminate both the future divI-
bends and the corporate property; we pro-
pose to abate such a proportion Of the mar
ket value as viii fairly represent the corpor-
a:e property.
rule to accomplish this result is thus
expressed: Capitalize at six per cent, the
aggregate Of dividends declared during the
preceding year; deduct the assessed value
of the corporate property and its debts; di,
vide the remainder By the number Ofshares
of stock; the q~uotient will be the taxable
value Of each share.
The practical working Of this rule viii
be as follows: The dividends of the c. 7.
Company for 1884 aggregated $1,000; its
corporate property was assessed at $4,000;
its debts we're $4,000; the number Of shares
100. Then
The aggregate OF dividends capitalized at D
per cent ...-S -JrOJp
Deduct, corporate property .... .~..~sl00O
Deduct corporate ebtS.--"."."'... " o,OOo lo'V'O
Remainder. ........ ....... 5000
This remainder divided BY the number of
shares QOO) gives $40 as the taxable value
of each share.
Anticipating the objection that this sug-
gestion is somewhat Of a new departure, the
report says:
lift be said that this method of taxing
stock is original, our reply is, that we see
no reason why a new idea should not be C
credited to West Virginia. 1t is high time
that West Virginia should produce some in
telleetual achievement which may challenge
foreign respect. IL has been too much the
fashion in this State to discard domestic
views and to import methods from abroad.
The writer believes that he has intelligently
considered every tax report heretofore pub
Hshed and he predicts that as soon as this
subject comes to be understood, some
method of v~aluing and taxing stocks (sim-
liar to that now recommended) will be
adopted by the several States. 4
I'VE do not say that this method will
squeeze out Of corporations the largest
amount Of revenue; we only say that it is
fair, Just, and viii tend to e~qualize taxa
ton.
BE it remembered that in this day large
enterprises are usually prosecuted BY
means of corporate association and yet the
total State tax for 1882 on the personal
J property of all corporations doing business
in this State railroads exeepted) was less
,han 100000" =
The report concludes by expressing the
( opinion that "a statute embodying the sug
/ u~eStions made By the commissioners will in,
crease our taxable basis more than ten
millions without raising the valuation now
placed on property which is already as
sessed."
DIED.