The weekly Floridian. [volume] (Tallahassee, Fla.) 1867-19??, 1891-10-17

A Popular Falacy Knocked Sky.high
by Logical Argument.

A Popular Falacy Knocked Sky.high h
by Logical Argument.
To the Editor of the FLoRID1AN:
Just before the assembling of the legiela.
,ure an article appeared in Florida news
paper propounding a rather curious prob
lem for the members of that august body
to figure on, which, it is needless to say,
they did not have time to give attention to.
1t was something like this:
Jones buys land worth $4,000 from
Smith, paying Smith 81 600 cash, and Civ
ing his note for the balaLce The whole
value of money aud land is $1,000, but
alter the sale Jones is assessed for taxa ton
on the land, valued at So 600, while Smith
is assessed ON the $1,000 Jones has paid
him and on Jones' nofe for 81 900, making
50 1000, and tOge her they pay taxes ON a
valuation of 81 1000, instead Of $4,000, the
original value OF the Aand and the money.
"1n other words" says the article, 81 900
is taxed twice" And't the argument is :
"As Jones pays interest upon the ST 900,
would it not be just aud equitable
that he should only be taxed upon the
amount of money he actually invested ?"
This argument would be exceedingly
plausible il it were not that its author lost
sight Of the fact that when Jones executed
his note for $1,000. due on the land, he
created that much additional property, to
be added to the value of his 81 900 cash,
and Smiths $2,00) worth of land, making
in all $4,000, on which the two are re-
>pectvelY taxed. His note is
property, otherwise Smith, who
owns it, would not be taxed
upon it. 1t is based on Jones credit
which in turn is based on the land in
Jones' posses ion. While Jones' might
have given the note without mortgaging
the land, if Smith had consented thereto,
still Jones' credit was worthless based on
his ownership Of the lan1. It is there.
fore ..Iopes' credit whicl::- is Ata xae' a, in
Smiths hrnds, until Jones can create
other property to take the place of his
noIe. Jone-' credit was not taxed before
the transaction, because he had not used
It. AS soon as he puts it into tangible
shape, so that Gin Smiths hands, it uid
be taxed, he created new property to that
amount.
Let us see. At the end of one yeal
Jones has realized in crops out of the
land 81, 900, which he pays to Smith and
destroys the note. How do they stand
now?
Jones is tax ID on his land .$2 90
Smith is taxed on the III 'ney Jones
has pail him for the land ..... 200
1OtdI. S1 " "
This Jones. by simply anticipating with
his note) the 81 900 he has made out OF the
land, and substituting for his note the &C
lual money so made, has created an addi-
iional 81 900 subject to taxation, and the
assessment, is correct, because Jones has
the land (wor,h $4,000 and Smith he's the
money $4,000 Jones has paid him for it.
Is there anything intquitable about
that?
Suppose, as suggested by the author OF
this problem, that Immediately after
The transaction Smith had been taxed
AS stated, on the $1,C0) cash
Jones had paid him, and also on Jones'
note for $1,000, while Jones was taxed on
the land at its full value, less the debt due
on it, What becomes of the other 81, 1000
10 value which the land represents? And
why tax Smith on the note, If Jones
escapes taxation on half the value OF the
land he possesses? Smith gets no benefit
from the land. He has only Jones 81 900
in cash, unless the note isproperty, and
taxable If the note is not property until
it is paid, Smith ought not TO be taxed
upon it. 1t is property, therefore Smith is
Justly taxed upon it. Where did 1t come
from? 1t did not come out Of the land,
tor the crops were not made by Jones out
of the land, with which, a year
later, he could pay the note and
destroy it. When, after realizing on his
credit and paying his note, Jones is in
possession of his So, 600 worth of land,
paid for, do we hear him complaining be-
cause he is assessed for taxat on on it's
full value? Does Smith complain be-
cause he is taxed on SO, 600 on the money
he has received from Jones for the land?
The sum of the values they pay taxes on
is $4,000 after Jones pays his note; Is
there any reason why it should be less
before the note is paid? Jones can not
or should not complain, for he is in pos
session Of property (the land) out of
which he is to create 81 900 with which
to pay his note.
The fact is, that Jones was really worth,
at the time he bought the land, as much as
Smith. He had $1,000 in cash and 81 600
in crt dit. Using his credit be created
ST. 900 in property with which, and the
81 600 cash, he bought Smith's land. AS
soon a. he created that $1,000 worth OF
property somebody should have been
taxed upon it. He did not keep 1t, but ex.
changed Il with Smith for the land. And
he was iustly taxed upon the value ne re-.
ceived 10 exchange for 1t, while Smith was
Justly taxed upon the $1,000 cash and
Jones' note. EQUITY
Torr;l,Io h1ood noison. a body covered