The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1907-02-14
Taxing Life Insurance
Policies.
Bill Introduced by Senator Ayeock
to this Effect Should not Become
Law.
Greensboro Industrial News.

( \ bill introduced by Senator Ay
cock is now pending in the Legisla
ture Which deserves more attention
than it is receiving
/ II the bill il enacted into law, the
! holder of every life insurance policy
! III the State o. North Carolina will
F., be required To list for taxation and
pay taxes on each OF his policies conf
| puted at their cash surrender value.
! AS life insurance policies are now
written, nearly all have incOrpOra-
ted III them the provision that after
the policy has been running il certain
number OF years the holder may sur
render his policy aud receive. IL GER
tain sum, which increases from year
to year us the policy nears maturity.
! 1t is upon this sum that the pend
ing bill would Impose Il tax.
At first blush the bill may appear
to be Il fair one, for it can be argued
that the policy holder can, if he wish.
es, receive this SUN in cash, and that
the policy is therefore taxable prop
erty to that amount But how
many policies are so surrendered?
How many men during their own
lives receive one penny in return for
money invested by them in a life i'll
surance policy for the protection o.
their wives and children?
Our State constitution wisely pro
vides, article Y, section 7, that the i'll
surance on the life of deceased hus.
band or father, taken out for the
benefit OF his vile and children, sha]
90 to the benefciaries and shall not be
touched by the creditors or represell-
tative of the deceased.
Heretofore the various legislatures.
rs we think wisely, have aimed to
encourage all men thus to provide
for those dependent upon them and
no tax has been imposed upon life
policies. II, however, this bill is
passed contrary policy will be i'll
tugurated andmen discouraged from
nsuring their lives. But let us look
1t both eiustice and the eeXpediency
II the proposed measure.
| The men who insure their lives as
matter OF investment are few and
flr between. We think it would be
safe to say thatin at least 90 per cent
II the policies issued upon the lives
of the men of our State the holders
nave no thought of personal gain,
nd do not in fact receive one penny
from their investment.
Ordinarily the man who takes out
life insurance calculates Just how
much he can afford to pay each yeal
i'll premiums, and pays that amount
If he is to be compelled to pay taxes
on his policies, the same yearly ex
penditure buys less insurance. He
is not hurt, but his wife and children
are. the losers; it is really Il tax
against them that accumulates and
is paid when they collect that policy
But ii these policies are to be con
sidered taxable property, let US fol
low the line of reasoning that makes
them such to its logical conclusion
If Il man has Il fire insurance policy
he can cancel that policy and have q
portion OF his premiums returned tC
him-it has cash surrender value
Why not tax that policy also? Many
fraternal orders give sick and deatf
benefit, and the dues paid to such al
order in way buys these benefits. Dc
we propose to tax membership il
these orders? 1t may be said that
we are now dealing in sophisms, but
not so. For "a man does not own the
cash surrender value of his insurance
policy He simply has the right tC
| nv h., In nniinX- Con nunt n
money equal to a sum designated as
it's cash surrender value Ii he makes
the change, then tax him on the
amount OF money he gets, but why
not also tax the State bonds at theil
cash surrender value-the amount al
which they can be sold-on the same
theory?
But why do we want to tax life in
surance policies? Because we neeC
the money? Need it for what? TC
increase the salaries of the State Off
GERS? To have an exhibit at tht
jamestown Exposition? To increas'
the size of the capitol?
| Suppose we do need money for thes'
objects, are we so poor that we mus
call upon funds invested for the sup
port of the widow and the orphan tt
supply the necessary funds?
The proposed measure may be al
right, but we do not view it tha
way. 1t is not a tax on the insur
ance companies. They are not t.
pay it. 1t is to be paid by the holde
} OF the policy-the man who is tryin!
as best he can to live up to the mos
. sacred obligations placed by God an
| by nature on man-the Obligatio
TO care for her who has given him he
life. and those whom he has brough
| into the world