The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-04-13
WILL ASSESS POLICIES
THE STATE TAX BOARD TO STAND By
ITS FORMER DECISION.
Insurance Men Appeared Yesterday
A. j. Beveridge's Able Argument in
Behalf of the Policy Holders.

afternoon by the State Board of Tax Com
missioners. The board agreed to stand by
the previous decision as to the taxation of
such policies.
The policy holders, through their attor-
neys. were given hearing in the afternoon
before the board in the rooms of the au-
ditor of state. The room was crowded with
representatives of various insurance COM
panies, and people who holding policies.
interested in the case. Perhaps the
most distinguished auditor, as we'll as one
of the most interested. was Governor Pin
gree of Michigan. He had drifted in TO see
Governor Mount during the afternoon and
was given a place OF honor next to IN
diana's executive, where he followed care
fully the arguments given. The insurance
men and policy holders were represented by
Albert j. Beveridge, Edward O'Bryan of
Chicago, attorney for the New York Life
Insurance Company. ex-Attorney General
Green Smith and John A. Finch
Attorney General Ketcham made the
opening remarks. stating the position of the
board and throwing open the case for argu-
ment
MR. BEvERIDGE's ARGUMENT.
Mr.. Smith made a few preliminary re-
marks and then Mr.. Beveridge made the
! Taxation is the highest power but one
in the World has sad that the power to
tax involves the power TO destroy. Most
eey0ton rs nav nave come from an mPropef
the unwarranted assertion OF this power
so much that they kept 1t as nearly as pos
were not content to permit the Legislature
10 pass laws on this subject the same as
on other subjects, where either house may
originate n constitution
the people said that such laws must orig
mate exclusively in the popular branch of
the Legislature-the House of Representa-
tives
Therefore when executive officers, hav-
ing in charge the execution of such laws,
propose to place a new and hitherto un-
heard-of burden upon a certain class of cit
liens, not by authority of any express
statute, but by supposed authority, in
ferred from general provision OF a gem
eral statute, the greatest caution should be
exercised. The executive taxing authorities
ought not TO step in where the Legislature
has refused TO tread. They ought not TO
extend the tax laws by implication so as
TO impose new and unusual burdens in the
absence of express authority so to do.
Il say new and unusual burdens because
the proposed direct taxation of insurance
policy values in the manner proposed is alb
Solutely unprecedented. 1t is admitted that
there is no express provision of the statute
authorizing such action your board admits
that this new authority, which it asserts
rests entirely upon implication from the
general provision of the statute, and yet
this very law from which this board now
infers this new and unprecedented power
for years. Is il probable that all the able
and vigilant officers of the past would not
have discovered this power, had it ex-
listed? How happens il that neither our
present attorney general nor his predeces-
| sors, searching out the evaders of taxation
as with fo search light as was their duty
berless readings of the law, the power
which the board now asserts? Is it not
| this board during the last six years-a
| period of abnormal activity in taxation
| ever imagined that this board had a right
| TO do what is now proposed?
THE men l represent are before this
| board in a most respectful spirit. They are
not evaders of taxation. They are men of
is conceded once t& tfe Boards action
without example: | undertake to demon
Strate not only that this action is without
| authority of any law now on the statute
| books, but that ii is forbidden by the law
now on the statute books. This board is
| governed by the present statute and not
| by some statute which the board may think
| ought to be and which hereafter may be
enacted by the only power which has the
| right to lay new burdens upon the shoul-
| ders of the people, namely, the Legisla-
| ture of Indiana. ~ a5
NOT IN THE TAX SCHEDULE
The statute prescribed the form of the
schedule submitted by the assessor 10
| every taxpayer. (Acts 1885, Sec 3d. p. 25)
This schedule enumerates the property the
taxpayer must return. 1t descends into
| minute particulars. But it does not men
| ton insurance policy values; and the pres
! ent schedule is not the. original schedule
! that the Legislature first prescribed-it is
an amended schedule The Legislature has
worked ii over time, and again. And al
though they inserted the minute. items OF
4 m a md hnr a "A NOT frSx n
| important item OF policy values. Would
| the Legislature not have inserted policy
| values If il had intended that policy values
| should be directly taxed, as is now pro-
| poSeu? IS
This board claims the right to insert
policy values under Section 2os, which pro-
| Vides that the board may prepare a more
complete and perfect schedule" and upon
| the assumption that this subject escaped
the Legislatures attention when it pre-
| scribed the schedule set out i'm Section SO
| But the Legislature did not overlook this
subject. The law has at least two
references TO policies of Insurance, as
| of this argument. 1t must be con
coded that IL the Legislature did not over.
look this matter in prescribing the form
/ of tax list, but. having IL IN mind, refused
| to insert il in the schedule. this board can
not insert 1t upon the ground that the
| Legislature overlooked ii.
| This board has no power to tax proper
" located in another State. Even the
Legislature has no such power. Neither
TIE Ndiue pdSh OF a pdld-up pollcy nor the
| surrender value of policy of a company
| OF any other State, is located in Indiana.
The fund constituting those values is To-
Gated in the form of cash at the home OF
the company, or in the form of invest
| ments. wherever the investment may be
And those funds are not brought into In
diana by a policy any more than land In
another State is brought into Indiana
| by deed held by citizen of In
diana. And those funds are taxed within
| the jurisdiction where they are located. In
| the case OF home companies the funds con-
| shutting these paid-up and surrender
| values are taxed in lump to the company
In the case OF foreign companies the funds
are not only taxed by the State where they
are located: but they are out of the jurs-
| diction of Indiana-they are beyond the
limits of Indiana's authority
POLICY VALUES NOT A DEBT.
| You cannot escape this conclusion by
| calling the surrender value of a policy o,
| the value of a, paid-up policy claim, de.
mand or other Indebtedness owing to the
policy holder. AS long as man keeps hi.
| policy the surrender value does not exist
AS long as man keeps his policy he has
! nothing but straight life insurance TIL,
surrender value is called into life only b,
surrendering the policy; but when the
| policy is surrendered insurance ceases anC
| the surrender value becomes cash in
| pocket and is taxed as such. 1t is con.
coded that you do not wish to tax straight
| lfe insurance; and yet long. as a mar
| Keeps his policy that is all he has.
| "A policy Is merely a certificate en-.
| titling the beneficiary or payee TO partici
| pate in a certain fund under certain con.
| dltlons he has no right TO or title i'm those
| funds unless those conditions are per:
the policy: the other Is the death OF the
| assured. And so long as the policy is heIc