The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-07-02
TAX COMMISSION
REPORT RENDERED
Cont nuedl L4[H
Cont nued)

The inventory value" and the prop
erty Shown as assets in the merchan-
disc ledger and trading books of the
business would be matters too easily
arranged with unfairness by any tax
payer DESTROYS and willing to deprive
the Government of a part Of the taxes
due to it,
The object sought to be reached by
paragraph 10 is substantially covered
by the present provisions of the in
come tax law except in so far as it at
tempts to introduce the principle of a
tax graduated in accordance with the
value of the property of the taxpayer.
The latter feature ought not to be add
ed upon this particular point unless
/ the Territory is prepared to adopt gen.
orally the principle of progressive tax
alton with reference to the general
property tax as whole. Upon the
subject last mentioned the Commits
sion will touch hereafter
While on this subject of the basis OF
valuation, it may be well to note that
= in Section 1917 of the Revised Laws
there is a certain inaccuracy of ex-
preston which should be remedied.
The section prescribes that the inter-
est of every person in any property
shall be assessed separately. and that
such person shall be liable to taxation
in respect to the full value" of his in
terest in such property; and that the
interest of any person as ocCupier of
real property that is exempt from tax
alton shall be assessed to such Occu-
pier in respect to the value of his
interest therein. For the sake of uni
formity in the statutes the Commits
sion recommends that in both of these
sentences the expression full cash
value" be used, (See Exhibit "a"
PIP -.
CAPITAL ISSUES EMITTED.
/ Act SO of the Laws of 1905, amend
ing Section 1916 of the Revised Laws,
declares in Section / that 1.-The COM
bined property of every corporation
holding a public utility franchise and
occupying the public streets or high
ways of the Territory other than any
such corporation that by the terms of
its franchise is required to pay a per-
centage of its gross income to the Ter
ritory, shall be valued and assessed
at not less than the total amount of
the par value of the capital issues
emitted by such corporation. In IS
Hawaiian Is, the Supreme Court of the
Territory says that the phrase capital
issues is of great ambiguity and UNI
certainty" and one of the justices adds
that to him "the phrase appears abso-
lutely insensible. 1t is the most elu-
sive phraseology that l have ever tried
to interpret. Some people seem to I'M
do. I'D fla, l.
that is because they know, but as l do
not know what was intended by cap
ital isues emitted there seems to me to
be an absolute confusion of thought"
The Commission, likewise, does not
know what the term means. The Court
further remarked (18 Hawaiian 20)
that there is very grave doubt as to
the constitutiOnality of the statute"
presumably because it appears to con-
stitute an attempt to discriminate
against certain elias of corporations
in the matter of valuations of property
without any sufficient ground for the
classification attempted, but whether
the provision is constitutional or I'M
constitutional the Commission believes
that 1t is unfair to the class of corpor-
ations sought to be reached because
it establishes as to them a standard of
valuation OF property that in many in
stances will be higher than that per-
mitted to be used with other corpora
lions and taxpayers. The Commission
recommends that Section 1 of Act IS
be amended by striking out the pro-
Viso just quoted. (See Exhibit "a,
Section -, page - The franchise of
public utility corporations will still
remain taxable.
One member believes that that por-
ton Of Section 2S3 which prescribes a
rule of assessment of Government
leases is not land legislation in the
view of the Organic Act but is exclu-
1siYely tax legislation,l presenting a
peculiar and artificial standard OF as
sessment not authorized with regard
TO any other leasehold interest in the
Territory, and setting at naught the
cardinal principle of equality in taxa
ton and that if possible it should be
repealed by the legislature or else be
referred for the same purpose to the
federal congress.
PERSONAL TAXES.
These consist of one dollar poll tax
t'AAN wv uOlldlS SChOOl LAX anu TWO
dollars road tax. (Revised Laws, Sec
tions 1199-12OD.
Their abolition is suggested by some
OF the tax officials and would undoubt-
eddy meet with the approval of many
OF those directly benefited by the
change. The Commission does not,
however, deem it wise or necessary
that the change be made. The small
amount required now by the law under
the name of personal taxes is certain
ly not an undue burden, measured by
, the standard of ability, upon those
against whom it is assessed. All resi-
dents, even though not owners of any
property, should as a matter of fair
ness contribute something to the sup
port of the Government which affords
them protection in their lives and lib
erty. 1t may be added that in the ag-
gregate the personal taxes collected
(the total revenue annually received
from this source is about $3.50 ,OOO) is a
sum not to be despised in this Terri
nd af1 hot, As,1