The Ohio Democrat. (Logan, O. [Ohio]) 1886-1906, 1903-09-03
TAXATION OF MONEY AND
CREDITS.

III list requires the value of all
moneys in possession, or on de-
posit, on the days preceding the
second Monday of April to be re-
turned. Is that done as required by
law?
Lawyer Thorndike-It is not. Those
persons who have any conscience in
tax matters land that number is
growing smaller each year, pay out
all their moneys before that day, but
the most of them pay no attention to
the matter. Some of them ease their
consciences by saying to themselves
they owe as much as they have money
on hand, and hence make no return,
but in faet very little money is re-
turned. In the country townships and
In some city districts money is return
ed because its presence is known and
because Of the return of some amount
prevents an inquiry by the boards of
equalization.
Farmer Perkins-Is there no way to
compel or force citizens to return
their money on hands on grand levy
day?
Lawyer Thorndike Practically,
there is not. The laws as to penalties
for non-return, or insufficient return,
are a dead letter. The tax penalties
are never enforced. The return of
moneys for taxation is with some
matter of conscience, and with all
others it is matter of how to escape
inquiry from the boards of review.
The practical working of the law
since 1876, for fifty-seven years, has
been that money can not be reached.
The state ought not to attempt to tax
that which it can not reach, as the at
tempt is demoralizing to the state and
to the taXbearer.
Farmer Perkins-How about the re-
turn Of credits under item IA of the
Ohio tax list?
Lawyer Thorndike - The average
taXbearer will only return such cred
Its as he believes the public has knowl-
edge OF. If he thinks his credits are
not known to the public, he will re-
turn none.
The policy of the law is to induce
the taXbearer to secrete all his busi-
ness from the public, and he does it
right well. The state has no method
to compel the taxbearer to state his
credits and return the same. Any
method it might adopt would be more
expensive than the amount Of taxes
realized, and hence the law is incapa-
BILE of enforcement except in a case
here and there. These exceptional
cases, where there is an attempt to en-
force it, simply call attention to it's
injustice. 1t is wrong and unjust to
enforce 1t in one instance and leave
it unenforced in a thousand other
cases. The citizen against whom it is
enforced feels that it is spite work on
the part of the taxing officers, because
his neighbors escape, and he is soured
for life. He determines that he will
never be caught a second time and
he never is. He becomes a student
of the subject, How to Escape Taxa
ton" and as the lesson is readily and
easily learned, he becomes a master in
1t. l give an instance: One spinster
returned $4,000 credits for years. The
county auditor thought she ought to
have returned $4,000, and tried to
make her do it. He failed and she left
the state. The tax on the $4,000 which
she had returned for years was purely
a voluntary contribution on her part
for the sake of peace. She could have
escaped it from the start, but when
the taxing officers sought to compel
her to double her burden, she learned
how to avoid taxation and practiced it,
DIV dow ,INA
which she learned she might have
saved for years before. She despises
the Ohio system, and rightfully, too
A spasmodic enforcement of the law
is worse than none at all.
Farmer Perkins-What has been the
effect of the attempt to tax credits in
Ohio?
Lawyer Thorndike-It has kept up
the rate of interest on loans nearly 9
per cent above what it would have
been had there been no attempt to
make credits a subject of taxation.
The state expected to obtain this ex-
cess of interest in taxes, but it never
obtained it and never will. The cred
itor class eXacts it from the debtor
class for the risk of being taxed,
which is really avoided The theory
of taxation of credits (for it is the
ory only increases the burdens of
debtors. Were it not for the attempt
ed taxation of credits in Ohio, money
could be borrowed at from to per
cent. The policy of the state in this
respect simply keeps up the rate of
interest and fails to bring in the rev.
enue 1t was intended to bring.
The allowing of debts to be exempt
ed from credits practically excuses the
taxbearer from returning any credits.
1t Is easy to create debts for taxation
purposes, and they are so created.
knew citizen once who had $4,000
in credits. He had son whom he
felt obliged to support. He gave that
son a non-negotiable note for $4,000,
and paid him the interest on it. Thus
he escaped taxation on his $1,000 cred
its, and in perfectly legal way. 1t is
perhaps unnecessary to say that the
son never listed the $4,000 note for
IA E % M M