Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1903-01-29

corresponding reduction in the assess
ment Of the property OF debtors neces-
sarily result in duplication Of values
and double taxation, and cannot fail to
produce inequality and injustice, so
far as such laws may be enforced.
CD Such laws are incapable Of en-
forcemenr, except partially.
CD When partially enforced, the
injustice to those who are taxed is
much greater than if all credits were
taxed alike, and this whether the bur-
: den is borne by the few who are taxed
or is shifted to their debtors.
| (4 Incidentally, the receptions
and other practices resorted to in
evading the attempted enforcement of
such laws have degrading moral eff
feet in the community.
(5) Laws permitting the amount of
credits assessed to be deducted from
the valuation of the property of debt
tors do away with the evil of double
taxation and for that reason are inf
n1tely preferable to laws which do not
permit such deduction.
o. But under laws permitting such
deductions the tax imposed upon the
creditor is ordinarily shifted to the
debtor in the form of higher interest
or otherwise, with something added to
cover the creditors risk.
CD Laws designed to prevent such
shifting are impracticabIe and serve
to injure rather than to benefit the
debtor, the only person for whose pro-
lection they are intended.
After exhaustive argument the COM
mission says: In considering this
question it should be borne in mind
that if double taxation is to be COM
pletely avoided the suggested Geduc-
lions in favor of debtors will be exact
ly equal to the amount of credits as
sessed, and therefore no greater az
gregate ''of property would be as
seSsed from taxation under such pro-
posed system than would be assessed
if credits were wholly omitted from
taxation and the property of debtors
assessed without deductions. AS pre-
cisely the same aggregate of prop
erty' would be assessed under either
plan, it follows of course that those
who are neither debtors nor creditors
would Rave no greater burden under
the one plan than under the other The
proposition, then, is one affecting
debtors and creditors only and there
fore the real question is whether the
legislature shall interfere between
debtor and creditor and attempt by
law to determine the portion of taxes
which each shall pay on account OF
property in which both are interested,
or whether the state shall look only
to the poSSesSOr of the actual proper
ty for the required revenue, leaving
the adjustment of the burden between
debtor and creditor to be worked out
by natural economic laws. In other
words the proposition to tax the cred
itOr directly is not to secure additional
revenue, nor to increase the total
amount of property to be assessed so
as to lessen the burden of the non-in-
debted property owner, but solely to
benefit the debtOr-tO secure as be-
tween him and his creditor, if pOssl-
BILE, a more equitable adjustment OF
the tax burden to be imposed on &C
count Of property in which 10th are
interested than would be accomplished
by the natural laws of trade and COM
merce without arbitrary legislative in
| reference.
From the views expressed on the
taxation of creditors the second as
sistant commissioner, Nils P. Haugea,
dissents in the following language:
81 agree as to all the foregoing re-
port except so much thereof as treats
of the taxation and recommends the
exemption of credits. | dissent from
that part of it which recommends that
credits be exempted from taxation
my reasons for such dissent being in
part as follows:
! First. The report itself shows that
with the supervisory system provided
in 1901 credits have been assessed
more fully in 1902 than ever before,
and | cannot agree to the prediction
made in the report that this standard
will not be maintained. On the con-
trary, l believe that with the expert
ence gained and with better knowl-
edge of the law and the means of its
enforcement, assessors and super
visors of assessment will make much
fuller assessments of credits in the
future.
Second. 1 do not agree to the
broad proposition that credits are not
property There seems to be differ
ence of opinion among economists on
the subject.
Third. No state has as yet eX-
empted credits and the step would be
without precedent in this country.
Fourth. The claim made by Prot.
Plehn, cited in the report, that the en-
tire burden Of the tax on credits is
shifted to the debtor, is a subject Of
controversy at the present time.
Fifth. 1t may be true as the report
states that 'dIrecl taxation Of credits
as property has long been abandoned
in nearly every civilized country ex
cept the states of the American union.
! The report does not specify the coun
tries referred to. [ have to some ex
tent examined consular reports made
to the state department at Washington
AMI established IN 1888 on the subject
of taxation, and as far as my investi
gation goes l have failed to find g
single country which does not in some
manner impose tax on the creditor
either in the form of an income tax OF
in some other way. They have Substi
+,,+o5 tho oroSitOr for tba credit 20