The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-01-21
TAX COMMISSION REPORTS
Recommends Many Changes in the
Democratic Paragon of Perfection.
Greenbacks Cause Treuble-Right to Appeal
Notwithstanding Essential to Maiatain
Equality-Personal Property Deductions.


brought large amounts of property to the
tax duplicate that has hitherto escaped
and is more equitable than any previous
law. 1t needs amendment, and some of the
necessary changes are proposed. To secure
Just taxation of all property the board
calls attention to the greenback. Upon this
point the report says:
Greenbacks are exempted from State taxation
by virtue of decision of the United states
courts that they are government securities, ana
this exemption was doubtless conducive tn pub
lie welfare SO long as our paper currency was
not on specie basis, but now that the govern
ment is maintaining specie payments there re-
mains no reason for exempting greenbacks from
taxation In order to strengthen its credit. 1t IS
both unjust and confusing that one kind OF
money should be exempt from taxa
ton while all other kinds of money
are taxed, and this injustice is strong
temptation 10 many men in possession OF
money TO misrepresent Its character. Indeed {
is notorious that this temptation has proved so
strong that the amount of money claimed to be
exempt as greeEbacks Is enormously In excess OF
the entire greenback circulation. In our opinion
your honorable body should memorable Con-
gress, asking the passage OF bill making green
backs taxable as other money, such as was intro
duced when specie payments were resumed. and
whose passage has been repeatedly urged since
that time, but thus far without success.
After noting the fact that railroad and
other corporations have resisted the col
lection of their taxes, the report goes on
as follows:
In some cases that have come under the notice
OF the board banks and other corporations that
have been before the board on appeal, and have
had proper assessment put on their property,
have, III the succeeding year. obtained from the
local officials an enormous reduction in valua-
ton. 1t would hardly be practicable to require
the State Board of Tax Commissioners to make
the original assessments on the property of such
corporations, owing TO their great number and
the fact that they are scattered over the entire
State. We would recommend, however, that
there be given full power of appeal TO the State
board from the local assessment OF all
erty Of banks. whether incorporated
or not. Such appeal should be allowed to be
County Board of Review or by some limited
number of taxpayers, and the decision OF the
State board should be binding on local officials.
TO order before il the case OF any individual,
firm or corporation whenever it has reason to
believe that the local assessment mas no. 9een
properly made. Such power OF appeal and re-
vision would, in our opinion. furnish an ade-
quate remedy in the comparatively few cases in
which the law might not be properly enforced
and at the same time would leave with the local
authorities, who can best exercise il. If so dis
posed, the power OF assessing such property
where situated.
After stating that the board has secured
q satisfactory equalization OF taxation. It
admits that this cannot be continued with
out great difficulty, and proceeds to make
suggestions regarding the separation of
State from other revenues. which cannot.
however, he adopted until the Constitution
is changed. These suggestions are:
The first is to set aside for the use of the State
a certain per centum of the taxes paid by rail-
roads, together with special taxes on GER
tain other classes OF property, such, for exam
pie, as the saloon license tax, the present fran
chise tax, and possibly an Inheritance tax or q
special income tax The second Is In effect q
from a tax on the income of counties, that is to
say, TO make no direct State levy on property,
but to require each county 70 pay into the State
treasury fixed percentage OF all taxes collected
by ii. Either OF these plans would be feasible,
but a constitutional amendment would prob
ably be necessary to their validity. we have not
deemed it necessary to present any bill for the
consideration OF the Legislature.
/ The board does not favor the idea of per-
hitting corporations to appeal to the
courts unless the court Is given power to
make an assessment Inc board advises
That the date of assessment be made March
instead of April 1.
In regard to the taxation of personal
property the board says:
The board is satisfied that considerable
amount of personal property that should he
taxed escapes taxation on account of the pro-
vision in section So for the deduction OF indebt-
edness from credits. We would recommend that
six. "all demands and claims" item seven,
"a" . deposits wit, with othes corporations"
yiduals," be removed from the list from which
Indebtedness may be deducted, and placed under
the title of 'chattles:" and also that item ten
be amended to read, ''all other amounts owing
me from any person. firm or corporation, except
for moneys deposited with banks, corporations,
firms or individuals" The object i'll allowing
deductions Is to avoid, as far as possible the
effects of the credit system and we think there
Is no good reason why deposits should be treated
as credits of the individual. inasmuch as the
whole theory OF our tax system is that they are
cash on hand We further recommend that the
law should specifically set out and define what
shall constitute bona 1ide indebtedness to be
deducted from credits, as above enumerated.
On the SUI Inject of taxation and supervision
of loan and building associations the
board says:
We believe that the exemption of money so in
vested, SO far as concerns the periodical pay
ments OF shareholders, is properly exempted.
These associations are in effect the savings
banks OF the people. and it is evident that they
are having most beneficial effect in forming
habits economy and thrift. For this reason it is
important that the welfare OF the stockholders,
for whose benefit the exemption from taxation
is given. should be jealousy guarded
by the state. Considering the number of these
associations. the vast sums Of money involved
and the number of people investing in them, 1t
would be difficult to imagine a greater calamity
that could befall the citizens who are struggling
TO secure homes than any extensive failure OF
them. At present there Is no supervision of the
conduct or their business, as Is req ircd in case
OF banks and insurance companies, and yet the
public interest in them is quite as great. We
would, therefore. recommend the creation OF
DuIttu IOr JueiF supervision, as mas Dtcu uOuc
in ndmber OF other States. Each company
should be required TO make a sworn report twice
q year TO the Auditor or State, and that
official, charged with the supervision, should
have discretionary power OF examination at
any time. and should be required to examine the
affairs of any association at once. on demand OF
q limited number OF shareholders. The semi an
nual reports should show what amount or stock
Is paid up. and TO whom such paid-up stock be-
may he a preseribed by the Legislature or the SUI.
pervlslng Official. AS now conducted, pald-up
stock in these associations represents money
loaned TO them or invested In them
for the purpose OF escaping taxa
tlon It Is the property OF capitalists:
believe, therefore. that paid-up stock should be
taxed, and indeed We have ordered IL taxed in
SUCH cases as have come before US on appeal,
when Its character was established by evidence.
But such eases WILL OF necessity, be rare, and
unless some provision is made by which all such
stock can he discovered and brought upon the
tax duplicate, taxing any OF II Is really q dis
elimination. We believe, moreover. that the ex-
tensiye borrowing OF money by building ass0cia-
tons Tor the extension of their business. such as
the sale OF paid-up stock, Is a dangerous pro-
cedure and should not be encouraged by the
State.
The board believes that the system of
county assessors should have longer trial.
as in it's judgment such affairs can be of
great value.
A table is submitted which shows that
there were levied for all purposes for 1891
taxes To the amount of Sl7.510.4 2S.6i, and
that the collections of current taxes for
the same year amounted to Sl5.597, $40. 60,
showing a delinquency of Sl,9l2, 5T.77. A
large part of this delinquency Is accounted
for by reason of the failure of certain rail
roads to pay all or part of the tax levied
against them under the assessment.