The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1894-11-30
ABOLISH TAXATION OF CREDITS.

EDITOR GAZETTE:
In your paper of the 10th Nov. you say
that l attempt in my former letter to defend
the present iniquitous assessment law.
Please let me suggest slight correction
of that statemeas. The present law taxes
the credits of our own citizens, but by the
repeal OF the mortgage tax law does not tax
foreign credits. That is ss much as to say
tic capital is taxed by his creditor, while if
he borrows of foreign loan companies he
pays none. This is an unjust discrimination
! which ought to be abolished. Hence favor
the repeal of all laws taxing credits.
Why should A get money or credit at
or per cent. per annum while B must pay
10? This inequality ought to be rsmedied,
and can be by repeating the laws as afore-
said. There Is only one other way to rem
sdy the injus.ice, viz, by restoring the
mortgage tax law, when tbs foreign lender
can tax our citizens and we shall be where
we were before it's repeal.
Allow me to say that yoSr scheme is not
more favorable to the debtor than the pres
ent law. In fact, it is practically equiva-
lent. Under your plan debtor will be
assessed upon all the property in his name,
and pay tax upon it the same as now. If
he pays, say two per cent. tax on his debts,
his creditor will charge him two per cent
more as interest and there will be nothing
to deduct from his tax or assessment. This
dodge has been tried many times, but an
agreement between the creditor renders it
nugatory. If the rate to lie paid for the
use Of credit were not a subject OF agree
ment between the debtor and creditor, then
taxes could not be shifted, and legislators
might have their own way but as long as
the sacredness and obligations of contract
are respected by the state, the wishes of
g.. legislators will be fruitless.
| For the sake of brevity let me summaries
. the points under discussion, as follows:
When credits are taxed the debtor must,
as rule, pay the tax for the reason that
such AL agreement is usually made between
debtor and creditor when the loan is nego.
tiated, and statutory regulations are power
less to prevent it.
Taxation of credits results in double tax
alton of the debtor unless he is allowed to
deduct from his asses sment the full amount
of his debt.
| But dedu ctions of Indebtedness, even
when guarded by the most iuquisltorial
laws and the ssverest penalties, opens SO
wide door for fraud that not only credits
but millions of dollars worth of real and
personal property escape taxation.
! The operation Of such system in this
state for nsarly forty years proved that 1t
was no benefit to honest debtors but trav.
esty of any proper system of government.
Where credits are taxed and deduction for
Indebtedness allowed, all fairly and s9uarely
done the debtor is still taxed upon all the
real and personal property in his possession
or ownership, just the same, and to the
same extent as though debts and credits did
NOS enter into the computation. When
every solvent credit ia assessed and every
| proper deduction allowed the state can
never get a cent of tax out of tho transac.
ton for tbs reason that debts and credits
must always balance, and nothing remains
as the subject of taxation.
Hence, if under the latter supposition the
state can get nothing, and it does not pro.
mote justice among men, why in the name
of common sense juggle with it any longer
Why not wipe all such laws from the stat
ute books at once, and, as the boys say
quit monkeying with such business?
Some people can never get over thinking
notes of hand should be taxed but why
tax notes? A note is not wealth it may
not represent wealth. At best it may rep
resent wealth in tho debtors possession, but
this wealth has been taxed or is subject tc
taxation. Or it may stand for wealth yet te
be created. In either case it is absurd te
tax the note; in the first place, because the
property for which it stands has been taxed
and in the second place becauss it is taxing
a fiction, a contingency. There is no good
reason for trying to tax credits; let u
bandon the attempt.
T. w. DAVENPORT.