The times. [volume] (Richmond, Va.) 1890-1903, 1901-10-11
TAXING SHADOWS.

TAXING SHADOWS.
The Chicago Chronicle refers to the
attempt to tax stocks and bonds as az
attempt ITO tax shadows Our reau-
orc will recall that we have used thus
expression on several occasions 10 the
game connection. It is slgnlhc;lht
EXPRESSION and an apt illustration. Inc
mistake which the lawmakers OIL var
4 .-inia have made in framing their tax
law is that they have not Distinguish
cd between substance and shaoo"'
The property is the substance; me eV'-
dence of ownership or the evidence Oh
debt on the property is the SHADOW.
au,l,e poinr to which attention should
especially and persistently be Greet.
ed saws the Chronicle, rs ihat Tue
:ttem,n to find this kind CT propetSS
for taxation must necessarily fali ioF
two reasons: First. because the great
bulk of such property is easily con-
ccaled or can be found only by the
most Extensively inquisitoriai methous,
and. second, because the taxation oI
evidences Of debt if il could be reduced
to practice would be monstrousiy IN
just"
The Chronicle concludes its remarks
With the following illustration:
IL 4 man buys i farm partly on
credit, giving notes secured by moi
gage for. say. two-thirdS OF the waite,
lle paws the tax on the farm. III the
seller of the farm is taxed on the notes
and knows he calinoJ escape he VIII
surely add The probable amount Oh the
tax. with something over TO make a
sure thing OF it, to the rate OF interest
or to the price Of the farm IL there IS
an effective usury law TO prevent nm
from adding lit TO the interest. Thus
The purchaser pays both taXes-the
tax on the farm and the tax on Inc
notes.
This is rather hard on The purchaser
the poor debtor whom those who
insist on taxing notes seek to favor.
This poor debtor has 10 pay the tax on
the farm and the tax on the notes be-
sides, while his farmer neisllbor, who
is not q poor debtor, but OWNS his farm
clear Of incumbrance, has TO pay i TAX
on his farm only.
Thus the rich man. whom the far
ners and other advocates of taxation
of evidences of debt are forever chaS-
ing after escapes just the same IL the
evidences are found and taxed as he
would il no attempt were made TO
tax them at all.
Then why not abandon this futile
chasing after shadows once for all and
rest content with taxing the substance?
Let us give another illustration. We
will suppose that Farmer Jones and
Farmer Brown own adjoining farms,
each assessed at $1,000 and taxed each
$50 a year for State purposes. We vii!
suppose that Farmer Jones has also
cash surplus of 81 600, upon which he
pays an additional tax of 81. The taxes
for 1899 are all paid. A year passes,
and in the meantime Farmer Jones has
loaned to Farmer Brown his cash sur
plus of $1,000 and Farmer Brown has
given him his note. secured by a mort
gage on the farm. Farmer Brown takes
his thousand dollars, which he has bor-
ro.yed from his nei2ihbor, and invests
it IN $1,000 worth of farm machinery,
or live stock. The assessor comes
around again and assesses the two
farms at $1,000 each, but, instead of
assessing Farmer Jones on his thou
sand dollars in cash. which he had The
year before, be assesses Farmer Brown
on $1,000 worth Of farm machinery and
fine live stock, as The case may be-
Now, can any reasonable man say that
the ought also to assess Farmer Jones
on the mortgage which he holds? Has
any additional property been created?
Is it not perfectly plain that the asses
sable property in this case was :ile
thousand dollars in cash and that This
has been changed in form Surely :1,erc
has been no additional property be-
cause mortgage has been put on the
place. The mortgage simply stands
for a debt and nothing more. and. rs
we have said and as The Chicago paper
says, it is just as reasonable TO tax tie
shadow Of n house after the house has
been taxed as to tax mortgage on a
piece of real estate.
We so father and say that what is
true of mortgages is true also of all
forms Of obligations. and we say that
1t is absurd and unjust and monstrous
to call these evidences of debt prop
erty and levy 4 tax upon them. If the
State wants taxpayers TO be Just and
honest in giving in their lists, the State
should set the example by being just
and honest in framing her tax laws.
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