The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-07-02

able portion lying below low water
mark. The owners of this cable have
requested that the Commission recon-
mend the exemption from taxation of
all submarine cables lying below low
water mark, and serving the govern
ment at government rates.
The Commission does not see its
way clear to recommend that this re-
quest be granted. 1t does not believe
that the fact of the cable company be-
| ing required to pay a property tax on
| its submerged cable within three miles
of the shore of Oahu is burdensome
matter to the company, or that such
| fact would deter any other cable COM
pany from landing additional cables on
this island 1t does not believe that
change in the law as construed by the
Supreme Court declaring that sub
merged cables are without the terri
tory for the purposes of taxation would
be any encouragement to other cable
companies. The property for which
exemption is sought is within the ter
ritory and like all other property in
the territory it should be taxed. The
evident theory of taxation exemption,
except as to eleemosynary institutions,
is that of protection and encourage
ment of infant industries The cable
company does not come in either of
these two classes. 1t may be observed
that the cable company makes no in
come tax return, and that the tax as
SCISSOR of this division has not been
able as yet to collect any income tax
from the company.
The commission understands that
no net income is locally shown be-
cause, against local receipts the entire
local expenses are charged. AS the
bulk of the company's business is in
Through messages, relaying merely at
Honolulu, the receipts for which are
credited to offices in other tax jurisdic-
tions, and to care for which the entire
local plant is practically necessary,
such deductions from local gross earn
ings would appear to be incorrect in
principle. Many cables land on the
coast of New Jersey. That state meas
ures the property of cable companies
by their gross receipts, on which is i'm
posed a tax of two per cent.
At least until some fair results Of
taxation be obtained through the in
come tax or a property tax under the
Enterprise Tor profit" method of as
sessment based on the actual earn
ings and expenses of the corporation
the Commission thinks that no special
exemption law should be passed.
PUBLICITY OF TAX RETURNS.
The Commission recommends that
Section 1241 of the Revised Laws be
amended by including therein a more
specific enumeration of the documents
and records which are to be open to
the inspection of the public. See Ex-
hibit "a, Section -, page -.
1t would seem to have been the pur-
pose of the legislature in enacting
Section 1241 to make all records of
the tax offices open to such inspection,
but in practice the section has been
construed by some at least of the as
SCISSORS as not authorizing or requiring
the tax officials to permit inspection
of the returns filed by taxpayers and
of perhaps other documents. The pur-
pose of the amendment is, as readily
appears on it's face, to make it entire
1y clear that the law does permit any
and all taxpayers at all reasonable
=. times to learn by personal inspection
of any of the records, including re-
turns, what property or income has
been returned by and assessed to any
other taxpayer, and what valuations
have been so returned and assessed. It
has been the experience of the past
that oftentimes taxpayers believe,
whether justifiably or not, that dis
elimination is being made in the val
uation or assessment of their property
as compared with similar property of
others. The section as amended will
afford a safety valve for the allaying
of such suspicion where it is ill-found-
ed and permitted, and whether inten-
tionally or Internationally. 1t will
further place it within the power of
any taxpayer who has knowledge or
reason to believe that some other tax
payer is concealing property or income
from taxation to render assistance to
the assessor in that respect after as
pertaining from the returns that prop
erty or income has been listed and
should to the same extent make it in
creasingly dangerous to any taxpayer
to present a return false in any re-
spect.
PENALTY, INTEREST AND LIENS.
The laws as it now stands Or. L..
Section 1868 imposes a penalty OF
1919 upon all delinquent taxes from
date of delinquency and 1919 interest
per annum from fifteen days after de-
linquency. 1t constitutes every tax a
lien for five years upon the property
upon which it accrues. From various
sources the suggestion is made that
all these provisions be stricken out,
the argument advanced being that
they constitute an undue burden upon
the poorer taxpayers, and, as to the
lien, impede transfers of real estate,
because intending purchasers and
mortgages are always subject to the
danger of subsequently discovering
that there are unpaid and enforceable
claims for as much as five years tax
es. To the Commission it seems wise
to have severe penalties for the non
; payment of taxes. tits not as though
the claims for taxes, whether on May
Is or November Is, were to come in
I,n -,