The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1904-12-03
The Tax Principle.


The Tax Principle.
Editor Of The Tlmes-Dispatch:
4 Sr,-TaXation, direct and Indirect,
| whether levied by State. city or county,
| oil, ny. a nations government, has ever
been * subject Of complaint by those who
! have It to pay, and has often been the
occasion of revolutions in past ages. No
| such dire result Is now to be feared in
our prosperous country; and yet. II great
accumulators OF capital shall control
! legislation and place the burden OF tnSa-
|tion where 1t ought not to loe-on the
| poor; If, simultaneously, the cost Of liv-'
ing increases and the grim horror, hun
ger, shall arouse the resentment of the
people against a government. created by
and for tho benefit of combined wealth,
who can tell to what extent an effort,
made to right theirsgwrongs, may go?
Will It be a result such as followed Ha1np-
denis refusal ito pay ship money? VIII
| 1T be that result which came when Bos-
| toms harbor was made Il the receptacle
| Of British tea? Will it be the turmoil
and strife such as Followed the nullitica-
| ton act of South Carolina in Calhoun's
day? And now, let us suppose a n,oneyetl
man Of Richmond to own one hundred
thousand dollars worth Of stocks or
bonds Of some home company; his taxes
| would he S1,7W per annum. II he should
send these bonds or stocks to some North
ern city and exchange them for the bonds
or stocks to sonic company not chartered
In Virginia, when asked to assess them,
could claim exemption from taxation: II
the contention be good that foreign bonds
cu. stocks are not taxable In the hands
Of Virginia citizens: and so, II the State
from Which these bonds Or stocks came
has laws which exempt foreign stocks
or bonds. then the two hundred thousand
dollars OF securities would not be- taxed
at all. IL two hundred thousand could
| thus he relieved OF taxation, why not
! two or twenty millions of dollars? And
further bonus would be offered to our
citizens TO buy securitaes from other
States chartered companies, If they arc
not to be taxed when once they are In
| the bounds OF our beloved common
wealth. The holders Of these securities
would share the benefits Of organized gov
ernment but pay nothing towards Its
support. A tax on real estate, household
| furniture. horses, cows, sheep and oxen,
and the holders OF stocks and bonds too
small in amount to lie seEt abroad and
exchanged. would furnish the where
withal to keep State. city and county gov
3. G.. GoDD1N.
The subject Of taxation is always In
tercsting, and wo are pleased to have
1t discussed by correspondents. whether
or not their views coincide with ours.
The difficulty With this correspondent,
however. is that he, like so many others.
has a wrong idea OF what stocks and
bonds really are. They are not property
In the strict sense of that term. A share
OF stock Is an evidence of ownership in
property and n bond is the evidence Of
debt, Let us suppose says our cor
respondent "a moncyed man Of Rich
4 mond to- own 100000 worth OF stocks or
bonds OF some company. Tho ta-3es
would be. sl.70o per a1,num. II he should
send these stocks or bonds to some North
ern city and exchange them for the bonds
or stocks OF some company not chartered
in Virginia, when asked to assess then,
could claim exemption from taxation. II
the contention be good that foreign bonds
or stocks arc not taxable IN the hands of
Virginia citizens And so. II tho state
from which these stocks or bonds come
has laws which exempt foreign stocks or
bonds, then the 100000 Of securities would
not he taxed at all
outrage, for a man owning $4,000 worth
OF property should lc compelled to pay
his legitimate tax. But the contention
of The 'i'imes-Dispatch ls lh't the way
TO tax the shares OF any corporation Is
through tho corpora ton itself, AMI not
through the Individual shareholders, Tho
corporation issuing stock should be taxed
In h. at tatn
property lies; taxed on It's physical prop
crty and on It's franchise. IL 1t has a
franchise of value. But when that has
} beer done; when the corporation has been
! made to nay all the taxes that arc Justly
: assessable against 1t, tho individual share
) holders should. of course. be exempt.
t For simplicity, let lis cite the following
case fropl tho city OF Baltimore, to which
We have before referred, and which serves
, as a perfect illustration of the prnciple
!, under discussion A rich man died, lcay.
, ing large estate, consisting of buildings
and lots. located in that CITY, There were
). many heirs, each having a certain intsres,
. in the estate. For the sake OF convenience
:, 1t was decided to organize'a company ,snl
I 10 lsshe 70 ,eacil liclr siiAIes OF stock &C.
y coIdipg as his interest appeared. There
> Was a debt OH some OF tho property sc.
4 cured by mortgage, and Ia take care o
y the debt bonds We're issued In due cours,
each heir received his quota Of stock
= The bonds were sold and tile debt can
y celled, The property consisted not In tn
l. stocks and bonds. but IN the houses an,
ID lots. and these were assessed as usual