The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1898-02-28
INSURANCE.

aVOlu unpOpular1ty. States have no in
come except from taxes What they give
to one has to be first taken from others
by taxation. They have nothing of their
own to give. In order to indulge this free
alton must be increased. But increased
taxation OF the voter endangers the po-
Htical aspirations of those responsible for
the increase. So to crafty their con-
project, and at the same time not to
offend their constituents who. are voters,
legislators are put under strong tempta-
ton to tax somebody who doesn't vote
for the benefit of those who do. At
tention is at once directed to corpora
tons, which are only "soulless" person.
alities, whose funds are in plain sight and
easy to reach. and against which 1t is
easy to excite such prejudice as to make
many people blind to all questions of
justice or propriety and careless Of those
VINO really compose these corporations, or
where their funds come from and what
they are held for. Not session of a
Legislature passes in any State but more
or less measures for taxing or increasing
the taxes on life insurance companies are
brought forward, and almost always with
some degree of success,
1t is high time that policy-holders should
understand clearly and precisely how this
matter affects them personally; that
whatever their company is taxed is paid
by themselves; that the tax is really upon
them personally, and that the company
merely collects 1t from them and pays
1t over to the State, for a mutual com
pany has no funds except those derived
holders The premium mp paid ID in by w mem mem
Der or policy-hOlder is calculated to full
I'LL two purposes: 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, to pay running expenses. These
Things cover the normal cost Of insur-
after providing these things through the
year is surplus and is returned to the
poncy-holder as an overpayment, or in
ooaaddlh1arys but Incorrect speech, as a
comes out of that surplus and makes the
return or surplus just so much less and
makes the cost of his insurance just so
much more. Any tax on a life insurance
company or on its premiums is direct
tax on the individual policy-holder who
pays the premium taxed. He does not see
the tax. 1t is not intended that he should
1t is intended that he shall suppose that
1t Is a tax on a corporation only and not
on him. But he pays it and no one else,
and II IS the States addition to the cost
or his family's protection
A second matter for your most serious
consideration is this:
Life Insurance Ought Not to Be
Taxed at ALI.
Taxation ought to bear on the possess
sion 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 the 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 theory no one would sug-
gest tax upon peoples losses. These
could be regarded neither as the proper
subject matter Of taxation nor as a hu-
name basis of the distribution of tax
burdens.
To illustrate: f~E fe
No one would suggest that because a
mans house, on which he has been pay
ing taxes, has been burned, he should at
once pay special tax on its value which
ne has just lost Or, that a 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 dis
tributing the property losses of those who
nave nave lost property among those who
contributions or payments, called pre-
miums. .
AS house, worth $4,000, and on which
he has paid taxes while it ts0 was in being
no restoring It,. That property and its
value are gone forever, not. only to Adult
to the whole world. To tax A on that
loss would be an unspeakab1e 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 assume 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
take his loss on their shoulders and make
1t 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 property is gone. The loss remains.
1t has merely been distributed. A is made
whole, but the contributors to that result
have taken the loss to themselves and
have lost AS house They haze divided
up the $4,000 loss among them.
To tax A additionally on the 5000 be-
cause 1t was returned to him would be
inhuman 1t would be to make him lose
something in spite of his own and others
efforts to avoid loss 1t would be loss
the occasion of his escaping from a
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 distributed 1t among
themselves. is an equal inhumanity. They
nave maze "A loss their own to save
him. To tax them on their loss Is an
equal outrage to taxing A upon that same
loss II it had remained on him.
1t is taxing a loss, and 1t Is a fine,
punishment upon men for so sharing each
others losses that 1t becomes possible for
them to be borne. Inc group of men
forming a mutual insurance company can
together bear losses which would crush
and destroy the individual. But 1t Is as
fnhuman and tyrannous TO tax the losses
of the group as to tax those Of the indi-
vidual, which he would have to bear but
for the action Of the group.
The only element in the transaction that
taxation of these losses, either to
the individual or to the group or mutual
is the fact that 1t requires the
use of money to adjust them, and that the
money is brought into sight, in the hand
of the adjusting association or corpora
ton, and in easy reach of the tax
gatherer, and SO becomes temptation to
ignore the true nature of the fund which
Is simply the collective losses, of the group
or company, thereby relieving the indf-
vidual calamities of its members.
Life insurance differs from fire insur-
ance only in the subject matter of the
loss. Instead of mans losing his house.
or other perishable property, his family
loses the money value, the earning and
capacity of his life. His life,
it's money value, what it will do for them,
what 1t will earn, is just as much prop
erty, and their property, their financial
a ia the house, and tho Ines