Evening star., 1902-05-01
PERSONAL TAX LAW
OBJECTIONS TO IT'S RE-ENACT-
MENT STRONGLY STATED.
Specific Instances Of How the Tax
Works Injustice Upon Prop
erty Owners.

10 the Eultof OF Inc Evening Star:
Under the present law in many states a
tax is levied on evidences of value in addi-
tion to the material value itself, and this
fact works great injustice upon holders
of stock bonds, etc. AS an illustration: If
resident of Michigan acquires by pur-
chase, say one million dollars of stock in
a New Jersey corporation and the one
million dollars paid for the stock was ex-
pended In the erection of a manufac curing
plant in New Jersey the state of New Jer-
sey would assess taxes upon the tangible
evidences of value; in other words, on the
real estate, buildings and machinery. When
the investor accepts the certificate of stock
he secures simply receipt written or print
ed upon paper reciting that he has invested
such an amount of money In this enterprise
and is entitled to be known as the owner
OF the million-dollar share in the said en-
terprise. In other words, the certificates
of stock are simply evidences of his owner
ship in some real thing. These certificates
have no intrinsic value, except so much per
pound for old paper; but under the Michi-
gan law, and notwithstanding the fact
that the real value of one million dollars Is
assessed and taxes collected thereon in
New Jersey, the Michigan resident will be
again assessed and taxes collected upon
these receipts or certificates, although they
may never have been carried into the state
OF Michigan, but perhaps are resting in the
safety deposit vault of the owner in some
outside city. The tax in some places in
Michigan is 2.7100 per cent. This would
mean $20,7O0 that the Michigan resident
would be required to pay in Michigan for
the privilege of holding these certificates
or receipts, the real value being located in
New Jersey, and the state of Michigan
never having had anything to do wha atso-
ever with the New Jersey enterprise. The
holder of the bonds of a railroad is not
caI Of ,n1 L ~, 1,
certain forms of receipt indicating that his
money is invested to that extent in the
railroad, and that tangible evidences of
value, the railroad itself, is should be
properly taxed, but the receipts (bonds),
being simple evidences of value elsewhere,
should not be taxed.
1t is such manifest injustice that compels
financial men, men of affairs to either re-
the state that imposes it. The country is
large and there are many attractive places
to live in. A man is free to select his own
place of residence, and for his own reasons.
1t Is poor piece of state policy to drive
from It's borders the strong money earners
for the money they are capable of earning
is not lying idle. The intent is to invest it
in some tangible enterprise that will return
profits. Such men build handsome homes,
lay out elaborate estates and spend their
money freely in improving property that is
tangible and properly taxable. The little
state of Rhode Island has shown wisdom
III 50 arranging 1tS laws as TO raise the
necessary money for carrying on the state
government by direct assessment on tangi-
BILE property and without the injustice of
double taxation, the taxation upon resi-
dents for money invested somewhere in ma
terial property.
This is a critical time that will govern
the future, of the city of Washington. If
the personal tax is kept off bonds stocks,
mortgages and other paper evidences of
value located elsewhere the large money
earners of the country will quite freely
avail themselves of the privilege Of home
in Washington. They will build elaborate
homes that can be assessed for taxes: they
will erect office buildings, houses for rent
and all sorts of city improvements where
the investment of money can be made
profitable, and from these tangible evil
denceS sufficient income can be secured to
pay all municipal expenses properly charge
able to the city. If the authorities persist
in following the shortsighted policy Of Ger
tain states in double taxation-that is, tax
alton of real value and taxation again on
the receipts representing this real value
they will drive the present wealthy resi-
dents of Washington away from the city
and prevent the incoming of many more
Later on states will discover the Injustice
now being perpetrated, and 1t is safe to
say their laws will be changed, but these
changes will probably not come for some
years. In the meantime 1t is Washington's
opportunity to locate within her borders
men possessed of hundreds of millions of
value upon which they pay one tax to the
municipalities wherein the factories, rail-
roads or what not may be located, but upon
which they do not propose to pay a second
tax upon the Intangible evidences of the
value which can elsewhere be located and
seen. c. w POST