New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1898-02-23

ana almost always with some degree or success.
ii IL hgh time that policy holders should un-
derstand clearly and precisely how this matter
AFFECTS them personally; that whatever their
company is taxed liz paid by themselves that the
tax Is really upon them personally. and that the
company merely collects II from them and pays
II over TO the State. For mutual company has
no funds except those derived from the pre-
miuins paid In by it's policy holders. The premium
paid In by a member or pocy-holder is calcu-
lated 10 fulfil two purposes: First. 10 pay the
death losses OF the year and also 10 provide n
reserve against the certain future greater losses
as the membership gets older; and. second, 10
pay running expenses. These things cover the
normal cost OF Insurance Whatever is left OF
the premium after providing these things
through the year IL surplus. and is returned TO
the policy holder as an over-payment; or in or
binary. but Incorrect speech. as n 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 insur-
ance just so much more Any tax on life in
surance company or on its premiums IS a direct
tax on the individual policy holder who pays the
premium taxed He does not see the tax. II IS
not intended that he should. II is intended that
he shall suppose that II is a tax on corpora
ton only. and not on him But he pays H. and
no one else. and IL is the States addition to the
cost Of his familys protection.
second matter for your most serious consid-
Grafton is this:
Life Insurance Ought Not TO he Taxed mt All
Taxation ought to bear on the possession and
use OF property. and not upon the loss OF prop
erty or upon the means by which such losses are
distributed
The only moral and humane theory ~ taxa
ton Is the collection Of only such moneys as are
necessary for the proper and legitimate expen-
ditures OF the State. from such sources; that Is
from such persons owning such properties as
ought to bear those expenditures and in the
proportion in which they ought to bear them.
Under such a theory. no one would suggest a
- Hose h.
ed neither as the proper subject matter Of tax
alton. nor as humane basis Of the distribution
OF tax burdens.
To illustrate:
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 It's value which he has just lost or. that 4
mans family should be taxed on the money
value Of his life TO them because he had died
and they have lost that value
Insurance is merely a method Of distributing
the property losses Of those who have lost prop
erty among those who have not lost II. Ii is
effected through contributions or payments.
called premiums
AS house. worth 5000 and on which he has
paid taxes while it WAS in being. has burned. 4
has lost 5000 There is no restoring IT, That
property and It's value gone forever. not
only 70 a. but TO the whole world. To tax A on
that loss would lie an unspeak able inhumanity.
But has insured against that loss, that =. he
has agreed with other hOuseOwners 10 share
their light losses r. they will assume his loss II
%
premiums, assumes MS 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 IL good 10 him.
They lose II 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 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 II has merely been distributed.
is made whole. but the contributors 70 that
suit have taken the loss to themselves. and are
just 50 much worse of. They have lost As
house They have divided up the 5000 loss
among them
To tax A additionally on the $1,000 because It
was returned 10 him would be inhuman II
would be 10 make him lose something in spite of
his own and others efforts 70 avoid loss. II
would be a loss created and inflicted by govern
ment on the occasion OF his escaping from
greater loss. 1t would be a fine on him FOR not
losing.
To tax the other men. who by their premiums
have taken As loss upon themselves and dis
tributed n among themselves. is an equal inhu-
manty. They have made As loss their own 10
save him. To tax them on their loss is an equal
outrage % taxing 4 upon that same loss II II
had remained on him.
II is taxing a loss. and IL is a fine a punish
ment upon men for sharing each others
losses that Il becomes possible for them to be
borne. The group u men forming a mutual in
surance company can together bear losses which
would crush and destroy the Individual But IL
IL as inhIman and tyrannous 70 tax the losses
OF the group as 20 tax those of the individual
which NJ would have - bear but for the action
Of the group.
The only element in the transaction that sug-
gests taxation Of these losses. either - the In
divduai or 10 the group or mutual company. is
the fact that It requires the use Of money 70
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 temptat ton to ignore
the true nature Of the fund. which is simply the
collective losses II the group or company. there
members.
Life insurance differs from fire insurance only
IN the subject matter Of the loss. Instead OF
mans losing his house or other perishable prop
erty. his family loses the money value. the earn
Ing and producing capacity of his life. His life.
its money value what II Will do FOR them. what
il Will earn, IS just "a much property, and their
property, their financial dependence, as is the
house. and the loss OF that lie is just much
a property loss 10 them as that OF his house Is
TO him.
For example: II man. aged 30. is earning
$1,000 year for his family. taking his chances
OF life according 10 the Actuaries table. and as
Stunning money TO be worth ! per cent. the
present value u his life In money 70 his family
Is Sl1pp That Is their actual money property
in his life. That IS the money they lose If he
If. when he dies. the State should openly tax
that family on that loss. on that amount. the
world would stand aghast. Such Government
could not live for no one could I've under H.
Life Insurance Is simply the distribution ~
the loss Of family property In the lives Of nus
bands and fathers. The father while ne lives
by his yearly premiums assumes his share ~
the loss Of those families whose heads have died
during the year. All the fathers who have as
ISOLATED themselves with him do the same thing
They, by their premiums take each family loss
as Il occurs over upon themselves and divide u
among themselves They lose the money value
OF the mans NE ms cad Of his family. The
family Is not financially crushed. for these men
have taken the burden from II. 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 lie just truly the family would have
lost II II these men had not assumed and divided
IL among themselves.
To tax them group or company upon the
loss they have thus ii and suffered Is as