River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1905-07-27
Taxation of Credits Works In=
Justice and Inequality.

ignorance will readily see that
credits are not property. 1t seems
that there are people who have
different view. Of one of them this
story is told: He was owing con-
siderable sum and not having the
money his creditor asked him to
give his note for the amount. He
readily acceded, filled out the blanks
in the note, signed it and handed it
over to the man to whom he was IN
debted. "There," he said, "I'm glad
that debt is paid"
If credits are not property they
should not be listed for taxation and
if taxed inequality and injustice re-
suit. IF the credit taxed is mort
gage the mortgaged property will
be burdened with a double tax for
all experience shows the tax of the
mortgage shifted onto the debtor.
This process of listing mortgages
for taxation has always been bene-
fit to those who owe nothing and an
added burden to the class who were
in debt. In Pierce county the whole
amount of property assessed for tax
alton is valued at about $o,ooo,ooo.
Suppose half Of this is owned by the
non-debtors and half by debtors and
creditors considered as a class. If
those in debt owe So 100000 and the
mortgages on the property are taxed
this latter class will pay taxes on
100000. Now of the taxes to be
collected on this $8,ooo,ooo the nom
debtors, who own half the actual
property pay but three-eighths, while
the debtors and creditors, having be-
tween them only half the property,
and together possessing no greater
ability to pay taxes than the non
debtors, are required to pay five
eighths. And while in experience
it is found that the creditor shifts the
tax assessed against the mortgage
and that on the mortgaged land up
on the debtor it may readily be seen
that the debtor bears the whole bur-
den of this injustice. A law taxing
credits is fundamentally wrong and
incapable of general enforcement.
That it is incapable of enforcement
is generally acknowledged. We
cited in a previous article the case of
Douglas county where in 1902
the amount of both moneys and
credits combined listed for taxation
was but $3.50 when the whole as
scssment was nearly $I9,ooo,ooo.
Following we give few facts
which we have recently found in
writings on taxation. They have
more or less reference to the ques-
ton under discussion.
In New York $2,5oo,ooo,ooo out
of every three billion of personal
property, taxable by law, escapes
taxation yearly.
In that state 1907 estates were as
sessed for S3,8Io,4I2, which after
the death of the owners were found
to amount to $2I5,I32,366.
"Laws for the assessment of per-
sonal property have failed to do
their work and the failure becomes
more complete every year.
The tax commission of Maryland
said as far back as 1881: 1--WE ut
terly fail of reaching private securi-
ties of any description"
The revenue commission of Illi-
nois in 1886 recommended that the
tax on credits be abandoned.
The Taxpayers Defense League
of Chicago says: ON the present
method of taxation which includes
credits the state is "a conniver at
fraud and a creator of inequality"
"The sense that inequality is in
| justice promotes it. Nobody else re-
turns his securities; neither will l."
Prof. Seligman of Columbia Uni
versity, an eminent authority on
! political economy, says the personal
property tax does not secure equali-
ty but incites to dishonesty and does
not respond to the American sense
of justice.
The Wisconsin tax commission
say in their last published report
sin recent years the subject 1.-THE tax
alton of credits) has been given care
full consideration by economists and
others well fitted by education and
training to ascertain facts and reach
correct conclusions. Their verdict
is practically unanimous in condem-
nation of all laws requiring the tax
alton of credits as property" They
further say: "The tax Imposed up
on the creditor is ordinarily shifted
to the debtor in the form of higher
interest or otherwise, with something
added to cover the creditors risk
ard laws designed to prevent such
shifting are impracticable and serve
IL Il A L