The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-07-09

ment law as Of 1899. The next year
the constitution of the state was !
amended that such ad valorem system
might be used It will doubtless be
noted that no claim is made that an
intangible value is given to the |
property because lin combination i'll
has an earning capacity greater than
that of the parts separately considered. |
A study of mainland taxation sys-
tens indicates that the courts have
had hard struggle to uphold the unit
method of assessment even when ap-
piled to great public Interstate SER
vice corporations who, alone, of all
corporations, have in some States been
burdened with this kind of taxation.
A certain lawsuit in Ohio involving
the legality of the unit assessment
method as applied to the taxation OF
the Adams Express Company, operat-
ing in different states, under contracts
and privileges inter ALA from Inter-
State Railroad companies, has been
cited in Hawaiian decisions to justify
when the case had reached the U. S.
Supreme Court that court alter two
hearings did not hold that good will
and unity of use, etc, increased the
value of the tangible property when
combined in use, but on the contrary
held that intangible property as well
as tangible property may be taxed;
that where separate articles of tangt-
BILE property are joined In a unity OF
ownership and use, an intangible prop
erty may be developed which in value
may exceed the aggregate value of the
separate pieces of tangible property
that the good will of an organized and
established industry may be a thing
Of value and taxable; and shat the
capital stock and shares of a company
represent both it's tangible and in
tangible property. i166 U. S. 1861
1t would thus seem that while in
Ohio the value of property for assess
ment purposes may be it's value in use
and that good will is an Intangible
but taxable species of property, our en-
terprise law, as, judicially construed,
regards the market or selling value o,
property as the sole criterion for tax
alton purposes and good will, per Sc
to be worcestershire.
If then our enterprise for profit tax
can only justify its methods on the
theory that purely personal qualities
of energy and skill and good will trans
fer themselves as it were from persons
over to inert things and give them a
permanent actual value which they
would not otherwise possess, it would
seem to the writer that it were time to
, abandon It as part of our revenue
system and rely for public revenue on
: rational ad valorem assessments OF
: real and personal property as defined
: in our statutes, supplemented by our
5 income and inheritance taxes levied OF
= flexible rates to meet the varying ifs
S cal needs of the government.
A horse a cart harness, are eacl
e worth what they will bring, and thei
: aggregate value. for purposes of sale
e is not changed by combining the tire,
D in unity of ownership and use and un
= der a skilful driver setting the outfi
to work to produce revenue. Econo
4 mically considered, the value in u.s.
may be greater than the value at rest
e but whether for purposes of sale or o
taxation, the aggregate value is merel,
r the sum of the value of the horse, thu
~ a1
, sidered A local violin may be wortl
f fifty dollars, yet in com animation with
Y Kubelik it may serve to produce in
+ concert of one hour a revenue of
o thousand dollars. The artist dCLhrt
h after adding to his personal income
v but the selling value OF the tangibl
instrument is unchanged.
A California farm may be WORT
q fifty dollars an acre. a Burbank buy
c it, and after five years produces an
r nuaGly specialized plants at sell 70
. more than the value of the farm. II
: passes on but no value has accrued t
q any part of the farm, and at all time
q its selling or taxable value remains tn
n same. In Hawaii a sugar plantation
9 hitherto Improbable, changes hands
A new expert owner who understand
= soils, the seed, and fertilization an
irrigation and animals and men an
? business generally works in fey
years through masterful skill a won
derful transformation. He may hav
paid one hundred thousand dollars TO
the property, but after five years is de
irving an annual net income of twent
10 thousand dollars from his investmen
% He may consider himself fortunate
: after paying the income tax on tina
s. amount, the whole income is not cal
Al italized say, at eight or ten per ecu
% and the estate assessed for two huT
> dred or two hundred and fifty thou
IL, sand dollars.
~ We reach the income of corporation
N and individuals by our income ia
% which taxes at its source every dollf