Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-05-14
INTANGIBLE PROPERTY
Effect Upon It Of a Personal
Tax Law.
EVIL EFFECTS PLAIN
C0NNECTICUT'S EXPERIENCE
WITH THIS MODE OF TAXATION.
Washington Now Confronted With
Similar Series of
Troubles.
EVIL EFFECTS PLl

Troubles.
| Written for The Evening Star.
| Some years ago when the legislature or
New York had the subject OF taxation UNI
| der consideration. a subject to which the
| greatest students of economics in all ages
| have certainly devoted more time and
! study than to any other, and probably
| more than to all other political problems
| combined, affecting the welfare and pros
| perity of the citizens of their respective
governments, editorial comments were
| made by the press of New York city that
| may not be considered altogether map
! propriate for republication at this time, in
the country's capital. Referring to very
| able report that had been recently made TO
the legislature of Connecticut by a special
| commission, one of the papers commented
| thereon as follows:
No report of special commission has
| attracted much attention that sent
| to the legislature by the tax commission,
| and its recommendations are being dis
| cuSsed with much favor. They are prin-
| cfpally, that the state should cease to at
| tempt to tax debts. notes and bonds. the
| argument being that there is no justice in
such tax, the property on which the
| loan or debt rests pays a tax, and that
| bonds and loans are in sense, intangible.
| The commission points out that only per
| cent of the grand list of the state is made
| up of this class of property, notwithstand-
| ing the fact that Connecticut capital is
| largely invested in loans on property in the
| west, showing conclusively that such tax
| will be avoided if possible. Investors have
! long complained of this system of double
| taxation" The instructive comments of
| another paper follow:
Benefits of Fair Taxation.
'It is fact very well known in certain
| quarters, although it would be almost i'm
! possible to produce the evidence for il, that
| the easy administration Of the law for the
| taxation Of personally in this state has
| drawn hither an enormous amount of that
| class of property. 1t has led many persons
| Of wealth to select this city a place OF
| residence lin spite of the fact that they
often pay higher taxes in the form of rent
| than they would otherwise be subjected tor.
The violation by other states of the
| principle not to try to tax what can hide
| or away has increaSe both the popu-
lation and wealth of this state The bene-
| fit. however, has in measure extended to
! the whole country, for the existence OF a
| great center where evidences OF debt are
| pra ctically secure against governmental
| robbery has lowered the general rate of in
| terest Every borrower in the land may be
| said to get somewhat better terms on &C
| count of the comparatively enlightened
| policy of the state of New York.
THE policy Of the neighborirg state OF
Connecticut has been in several respects
| less judicious; but the shrewd Inhabitants
| Of that community are learning wisdom
| from experience. A commission appointed
| under a resolution Of the general assembly
| has been for some time considering their
| system of taxation, and has just rendered
| a most instructive report. Those who be-
| lieve in the taxation of intangible property
| cannot possibly complain that the legisla-
ture of Connecticut has not beer sufficient
| ly stringent. 1t has provided at one time
| that all taxable property not listed should
| be confiscated; at others that 1t should be
| taxed three or fourfold, or that like penal
| ties Of various degrees should be imposed:
| and the taxpayer has for many years been
| required to make his own return of all his
possessions and swear to the truth of il.
| In spite Of all these measures, the proper
| ton Of personal property to real estate SUBJ
| ject to taxation in Connecticut does not
| very greatly exceed that in New York.
| The owners of such property who do not
| change their residence simply will not re-
| turn it. This is no mere conjecture but
| fact established by evidence that is con-
| elusive.
Disappearance Of Wealth
"In the first place it appeared that in
1855 the amount of property in the shape
Of bonds, notes and money at interest re-
turned for taxation in the state was about
SO 900 900. In 1885 1t had sunk to about
S13OOO,OOO. The inhabitants of eighty -one
towns do not own single bond. Not a
bond is to be found in the rich city OF
Meriden. The 10000 inhabitants of the
| thriving city Of Waterbury by their united
efforts manage to scrape together only $50
in bonds So far as cash is concerned there
was never a community since mankind
emerged from state of barter that got
along with so little. On the LIST of October
1885, the root of all evil had been entirely
eXtirpated in forty-three towns and the re-
mainder got along with only 81. 100000.
about one-tenth of the amount estimated
by statisticians to be used by such a popu-
lation.
of this evidence is not sufficiently CO.
gent 1t can be supplemented. An examina-
ton Of the probate records, made by the
commissioners, revealed the interesting
fact that people in Connecticut, as a rule
have no conception of their own riches
Executors find that their testators have
been ignorant of the existence of from 40
to so per cent of their real wealth. In one
district the search made included every
estate probated during the last ten years
and was conducted with the aid of the
judge of probate. The amount of taxable
property inventoried was $1,000 765: that
which appeared in the last tax list Of the de-
ceased had been assessed at 81 Isl, SCI In
another district seventeen estates regard
ed as representative were selected. They
were irventored a 5000, 900, but they had
been thought by their owners, when living
to be worth for purposes of taxation less
than SAT, 900. 1t has been customary to ac-
cuse Connecticut Yankees of a certain
smallneSs In their dealings, but when We
consider how much poorer they are in their
own judgment than in that of others We
see that it is easy to do them wrong.
Personal Tax on Estates.
when We consider the circumstances of
beneficiaries under trust created by will
widows, infant heirs and such helpless folk
whose property is exposed assessment
through the probate records, We see that a
man with due regard for posteTity cannot
properly die in Connecticut without care
fully arranging his Investments. If he
should happen to be resident Of Hartford
at the time of his death. holding, say, Sloo-
600 in West Shore per cent bonds-wnlca
he would doubtless keep in a deposit vault
in the city of New York, and omit to return
for taxa tion-hiS repre- sentatiyes would find
that the net return from this fund would
be reduced by taxation TO less than per