The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1886-08-10
32. HONOLULU, TUESDAY. AUGUST 10, 1886
Dauaiian 0azette.
TUESDAY. AUGUST 10. 1886.
Taxation.
[conttaued.I
pv unN G n nAcrrr
Taxation.
BY HON. s. \. CASTLE.
[ [ContiHaed.]

retain the definitions of real and personal
property adopted in 1882. l think they
have been wise in so doing 1 consider
them simpler than those offered in their
stead; less liable to misconstruction and
breach of the law and constitution, in their
application, by reason of misconstructions
in leading to double taxation, which / be
heve is conceded by all parties to both be
unlawful and unjust. The definitions Of
property in the amendment offered, do not
differ essentially from those of the laws
prior to 1882, and as / before said, all pro
nounced property by the law, was valued
in the returns to the assessors, but the
person assessed was allowed to deduct
from this amount all of the debts which
he owed otthin the Kingdom. Mortgages,
solvent notes and credit book accounts,
had all been included as property to be
taxed, but it was evident that any debts
which the man owed and which must be
paid from this property, would diminish it
just the amount of the debts to be deducted,
and SO they were deducted. This method
continued many years, and while it was
adhered to, gave general satisfaction, as
far as l know. The first departure was
made think, in 1874 or rs, when certain
holders of mortgages and stock certificates
were assessed upon them, and the mort
gagged property, and the property of the
corporation was also assessed, and the
payment was reclaimed as unlawful, double
taxation, which was so decided by the full
bench of the Supreme Court. There was
also ground for complaint in that nearly
all of the large mortgages, notes, and ac
counts were due from non-residents of
Honolulu, to its residents, and this gave
to the Honolulu assessor the commission
for these paper values returned in his dis
trict, while the country assessor did the
assessing OF the estates without pay, to
the extent of the deductions made on ac-
count of these debts of the owners. /
discussed this subject through the papers,
as its readers will remember, and lawyer,
the peer of any member of the Hawaiian
Bar, by reputation, one day said to me, you
are wrong, "If mortgages and notes are
not property what are they? They are
bought and sold" 1 replied, "They are
the evidences of the creditors claim
upon the debtors property, to an amount
equal to their face" Subsequently, he
fully, and you are right Others still as
assented to the principle.
Chief Justice Harris said, 'The best way
to assess, is to assess property wherever
you find it, to whomsoever has it in pos
session" Then you are sure of getting
all tie property, and the Government have
no claim on any more AS illustrated in
my last, A and B have $4,000 each $780,
600 in all, they are assessed for this, upon
$4,000 each. A borrows $1,000 of B and
now A has $4,000 and B only $1,000 and
AS note for $5,000 The amount of prop
erty has not been increased, but $1,000 of
the $4,000 has gone into AS hand and B
holds A's note to show that he has claim
for $4,000, of the $4,000, which would re
duce it to $4,000 and raise BIS again to
the same sum- Under the former method
of assessment A would return $4,000, de-
duct $1,000 for his debt, leaving $4,000 to
be taxed. B would return SIS, 600 note and
$4,000 cash, equals $4,000 to be taxed. If
A had been assessed for $15, 900, and B for
$4,000, it would have been double taxa
ton upon $4,000, of the $25,000, which
would have fallen upon A. He was taxed
for $4,000 when he really had but $4,000,
B paid upon $4,000 which was right, but
$4,000 of it represented by the note was in
AS possession and should have been de-
Quoted from AS tax Under the present
lava would have been assessed on SIS,
000-and B on $4,000, representing the
whole $4,000, but B would pay to A, TO
be endorsed on his debt to B the taxes
which A had paid on the $4,000 Thus the
Government would have received the iohoLe
OF its dues on the 600 of property, from
A on S15,000-from B on S5,000-while B
would refund to A the tax on the $1,000
paid by A, for B, to the Government So
the treasury gets its Just dues, and it falls
on the parties in its just proportions.
When the law of 1882 was passed thought
it was progressive, and that Judge Preston
deserved great credit for his work; doubt
less experience will open the way to some
improvement in its execution, but it should
be most carefully and wisely handled, lest
any change should be for the worse and
not for the better. The San Francisco
Bulletin, some years since, said upon this
subject of double taxation, applied to mort
cages, "The English, after years of discus
sion, first fought and corrected this sys-
tenn of double taxation by decreeing that |
mortgages should not be taxed" The Su-
preme Court of California followed, in its |
decision in the case of the Hi5ernia Bank
The Legislature of Massachusetts, in its |
session of 1880, after years of discussion,
have settled the question by passing Chap
ter 304, entitled s.An Act to relieve prop
erty from double taxation
The Act of 1876 was intended to stop |
any double taxation here, and secure to
assessors of the out districts the proper
commissions for the labor of assessing, but
by strange misconstruction in execution,
it resulted in imposing upon Us double
taxation for five years more, or until the
Act of 1882 went into effect The present
code was presented by Attorney General