Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1893-02-13
THE USING sill.


against that msas.re.
A. l.. Perry. Esq, Of Ganiiasr. WAS the
only person who appeared before the COM
mittce on taxation Thursday evening in
opposition to the listing hill. Owing TO
hack of SPACE ii was impossible to print his
remarks Friday morning, Mr.. Perry said !;
The presence of listing bill be fore the
Legislature would seem to invie, some dis
eassioa of the principles underlying taxa
iion.
A tax levied on real estate. as manafae.
turing establishments. stores and houses
for rental is no, ultimately borne by the
real estate owners, but falls, in the end, ON
the public as buyers, consumers and
tenants.
No corporations or individuals will buy
or build manufacturing establishments,
stores or houses for rental, unless their
calculations are based upon getting the full
interes, value of their money invested, in
addition 10 such burdens as taxes, insur-
ancc aud the like.
IL the owner of manufacturing cstah-
lishment occupies it himself. the price Of
the articles manufactured is enhanced by the
tax ON the plant as one OF the expenses of
production. Ii the owner lets II TO another
the tax finds its way into increased reni, and
the occupant in turn rcnumerates himself
by Increased price for articles produced.
Likewise the owner of u stare pays the
tax in the first instance, the tax increases
the rent, and the storekecpcr charges more
for his goods, thus fixing the tax on the
consumer. "a" who hires house pays in
the rental the same tax as n" who owns
and occupies one of equal value. "A"
may have its value in money. IL taxed
upon the money he pays tax upon both the
house and the money, which is unjust, for
he has no more property than n"
Under the taxation of real estate, a man
pays tax proportional 10 his mode of liv
ing. lie pays a tax on the house he occu-
pi,s. whether he owns II or not, and rs
consumer on everything he buys. Living
in an expensive house and in style he pays
u large tax, living chcaplv a small tax.
Thus a man in measure becomes his own
assessor. What cause of compliant then
has the real estate owner, II he gets the full
interest value OF his money! He may make
unwise calculations and bad investments,
but such contingencies bear even heavier
on the holder of bonds and mortgages.
Thus if il were true that the bond and
holder escapes taxation, IL would
he equally true that the owner of real estate
in the end escapes taxation.
A law designed to meet the ono, must, to
he consistent. be designed to meet the other.
The fntility of such cnactments MS the list
ing bill is seen when We consider what
would be the result Of an effective enforce
meut of tax On all bonds. notes and other
evidence of debt, everywhere.
As an effective tax on real estate, occu-
pied by others than the owners, raises the
rentals 50 an effective tax on bonds aud
evidence of debt, everywhere, would raise
interest rates. In the one case the tax falls
borrowers of money.
The rate of interest on money invested
in securiiies of equal dcsirabiity and value
is governed by the law Of supply and de-
mand. When any burden as a tax is laid
on such securities the interest rates will
rise Just enough to cover the tax.
A city in good standing riay sell its bonds,
which rs a matter Of fact are not taxed, at
par, with per cent. interest rate. Make IL
certain that such bonds will be taxed say 2
per cent, and there will be no bnvers un-
less the rate s I; per cent. or the bonds sold
below par, making the same result.
But the law would not be effectively on
forced everywhere. Such laws in the State
of Maine effectively, or partially executed
would not neccssarialy raise the rate of in
t.rest, though it might in certain cases. II
effectively enforced within our borders, II
would not prevent citizens of other states
taking our municipal bonds and lending
money to our citizens at the market interest
rates, and they would pay.
In other words, the competition Of out
ride capital would keep the interest rate
where it is. without adding the tax. while
our own citizens If they took such bonds at
par, at per cent. interest, must pay per
cent. tax ont of that 4 per cert., nakrg
snhstansli.lly an cnormous income tnx Of 30
per cent. upon them, an unjust an iniolef-
able c1t1rtion.
II the law was partially executed, which
would inevitably he the case, not only ont
side capitalists, but eyading capital lists
within the State could still take bonds and
notes without tax, leaving conscientious cit
izcns TO fall victims to law, which in its
practical wording would, as 10 them, be an
income tax amounting TO confiscaiipn.
If public requirements demand an income
tax, lt il bear iis true name, AMI be levied
on all alike. The present law regarding
taxation of personal property is not better
enforced because the common sense of the
community rejects it.
A strange law, indeed. which, aimed at
the equalization Of taxes, effects It's ol,po,
site. Aimed at the capitalist ami elfec.
t,x,I. ,p{araol al. nti.- IA sl,f. h,r al
debtors, and which. partially enforced, be.
comes transformed into an enormous in.
come tax on conscientious holders of per
sonal property, leaving capitalists, owning
an equal amount in real estate, and others
who evade the tax. to draw the full interest
value of their money, free frJiD its opera.
ton.
The wealthier citizens are. generally
speaking, yoluntarially the heavier tax
payers, being greater buyers and consumers,
but the arrogant assumption that the citizen,
who, by lifelong in'Iustry. economy and
self-denial has accumulated n competence
owes the public anything. or is under more
equitable obligations 70 the community than
the shftiess, lille fellow. who has spent his
life as pendulum bptwetR the rumshop
ani the Jail who has been an expense 10
The county in life an iills paupcr's grave
al lis death, might inil"c'l br questioned.
cur methods Of t3zsiion arise from ncces
siiy. a reycBnc must be raised. and If
man has no property he cannot directly IHy
lis just proportion of public burdens, mn;
the methoi devised by the taxation of rea
estate is to assess and collect Of those who
have the means TO pay leaving those tim
assessed from necessity TO he reimbursed ~
natural economic laws by which such take
are difFused. on the principles Of equity
among the different members Of the com
munity.