The morning news. [volume] (Savannah, Ga.) 1887-1900, 1898-02-25

merely collects 1t from them and pays II
over to the state For mi tual company
has no funds except those derived from the
premiums paid in by its policy holders
The premium paid in by a member or pol
icy holder is calculated to fulfill two pur-
poses: First, to pay the death losses of the
year, and also TO provide reserve against
the certain future greater losses as
the membership gets older. and second, 10
pay running expenses. These things COW
er the normal cost of insurance. Whatever
is left of the premium after providing
these things through the year Is surplus,
and is returned TO the policy holder as an
overpayment: or in ordinary, but incorrect
speech, as a "dividend' Whatever Is paid
for taxes comes out of that surplus and
makes the return of surplus Just so much
less and makes the cost of his insurance
Just so much more. Any tax on life in
urance company or on its premiums IS a
direct tax on the individual policy holder
who payssthe premium taxed He does not
see the tax. 1t is not intended that he
should. IT is intended that he shall sup
pose that ii is a tax on corporation on
ly and not on him. But he pays II and no
one else, and ii is the states addition to
the cost of his familys protection.
second matter for your most serious
consideration is this
Life Insurance Ought Not to Be Tax
ed at All.
Taxation ought to bear on the possession
and use of property and not upon the loss
of property or upon the means by which
such losses are distributed.
The only moral and humane theory of
taxation is the collection of only such
moneys as are necessary for the proper
and legitimate expenditures of tho state,
from such sources, that is. from such per-
sons owning such properties, as ought to
! bear those expenditures and in the pro-
portion in which they ought to bear them.
Under such a theory no one would sug
gest tax upon peoples losses. These
could be regarded neither as the proper
subject matter of taxation, nor IS a hu-
name basis of the d distribution of tax bur-
denS.
TO illustrates
No one would suggest that because a
mans house. on which he has been paying
taxes, has been burned. he should at once
pay a special tax on its value which he
has just lost. Or, that mans family
should be taxed on the money value of his
! life to them, because he has died and they
] have lost that value.
Insurance is merely a method of distrb-
! uting the property losses of those who
! have lost property among those who have
not lost it. 1t is effected through contri-
/ buttons or payments, called premiums.
! AS house, worth 5000, and on which he
/ has paid taxes while it was in being has
| burned y has lost 5000. There is no re-
storing it. That property and its value
| are gone forever not only to A. but to the
| whole world. To tax A on that loss would
| be an unSpeakable inhumanity.
But a has insured against that loss, that
is, he has agreed with other house owners
! to share their like losses, If they will as
sumo his loss if it comes. While his house
is unburnt he by his premiums, assumes
| his share of the losses of those whose
! houses burn meantime. When his house
| burns they, by their premiums, take his
loss on their shoulders and make it good
| to him. They lose it instead of A, because,
before that, he had, through his premiums,
! been losing his share of their houses which
| had burnt
Their assumption of the loss and giving
A the money in place of his house hasn't
restored the house. 1t hasn't changed the
loss into gain, or into an even thing. The
property is gone. The loss remains. It
has merely been distributed. A Is made
whole, but the contributors 20 that result
| have taken the loss to themselves and are
| just SO much worse off. They have lost
AS house They have divided up the
! $1,000 loss among them.
To tax A additionally on the 5000 be-
| cause it was returned TO him would be in
human. It would be TO make him lose
efforts to avoid loss. It would be a loss
| created and inflicted by government on the
| occasion of his escaping from a greater
loss. 1t would be fine on him for not
losing.
To tax the other men, who by their pre-
miums have taken AS loss upon them
selves and distributed it among them
| selves, Is an equal inhumanitN. They have
made AS loss their own to save him. To tax
them on their loss is an equal outrage to
taxing A upon that same loss if 1t had re-
manned on him.
1t is taxing loss and ii is a fine. pun
| ishment upon men for so sharing each
| others losses that it becomes possible for
them to be borne. The group of men
forming a mutual insurance company can
| together bear losses which would crush
! and destroy the individual. But 1t IS as
| inhuman and tyrannous to tax the losses
of the group as to tax those of the in
dividual which he would have TO bear but
for the action of the group.
The only element in the transaction that
| suggests taxation of these losses, either to
/ the individual or to the group or mutual
company. is the fact that It requires the
use of money to adjust them, and that the
| money is brought into sight. in the hand
| of the adjusting association or corporation.
| and in easy reach OF the taX-gatherer. and
so becomes a temptation to ignore the true
nature of the fund which is simply the
collective losses of the group or company,
| thereby relieving the individual calami-
| ties of its members
! Life insurance differs from fire insurance
| only in the subject matter of the loss In
stead of a mans losing his house, or other
perishable property his family loses the
capacity of his life. His life, its money
value, what il will do for them, what 1t
| will earn, Is Just as much property, and
their property their financial dependence.
as is the house; and the loss of that life Is
lust as much q property loss to them as
/ that of his house is to him.
| For example: II q man. aged 30, is earn
ing 81 900 a year for his family, taking his
| chances of life according to the Actuaries'
table. and assuming money 20 be worth 4
per cent, the present value of his life in
actual money property IN his life. That
! is the money they lose If he dies.
| IT, when he dies, the state should OPEN
| " tax that family on that loss on that
| amount the world would stand aghast.
| Such a government could not live, for no
one could live under it.
Life insurance is simply the distribution
| OF the loss of family property in the lives
| of husbands and fathers. The father, while
he lives, by his yearly premiums assumes
! his share of the loss of those families
| whose heads have died during the year.
| All the fathers who have associated them
selves with him do the same thing. They.
| by their premiums, take each famlly's loss
! as II occurs over upon themselves and di-
vide 1t among themselves. They lose the
money value Of the mans life, instead of
his family. The family is not financially
| crushed, for these men have taken the
| burden from IL. They are not crushed
| for they are many and have divided the
| burden, and the losses do not come all at
| once. But these men have lost the money
value of that life just as truly rs The fam
| lily would have lost IL IL these men hnd
not assumed and divided it among them
| selves
To tax them as a group or company IN
| on the loss they have thus assumed and
| suffered Is az abhorrent to justice and hui
! mainly as it would be to leave the loss on