The Hawaiian star. [volume] (Honolulu [Oahu]) 1893-1912, 1908-07-08
TAX COMMMISSION
REPORT RENDERED

he plan if the revenues were to be
increased. Business enter
prises were hereafter to be valued,
not on the basis alone of their real
and personal property as formerly
but, to all practical, III
not technical, intents and purposes
as enterprises or going concerns. The
statute continues:
I'm estimating the aggregate value
of each such enterprise for pro-
fit, there shall be taken into consid-
GRAFTON the net profits made by the
same also the gross receipts and ac-
tual running expenses; and where it
is a company being a corporation
whose stock is quoted in the market,
the market price thereof, as well as
all other facts and considerations
which reasonably and fairly bear up
on such valuation, and further pro-
Vided, that when any real estate or
house is leased or rented, the sum of
eight years rental thereof shall be
the assessment value of such real
estate or house, unless such valua-
ton shall be manifestly unfair or I'm.
just"
Naturally such a radical statutory
change in the generally accented ba-
sic definition of property value for
taxation purposes could secure affirm
alive judicial construction, only of
delicate balance and shading. This
came in due course, and from the re-
ports of cases tried and appealed I'M
der the new law the following ex-
tracts from Supreme Court decisions
are gathered:
"The property only of an enterprise
for profit was intended to be taxed,
and not the enterprise, as such, it
self"
Where, by reason of the skill, ex-
perience, and integrity of the Off
GERS and servants of a corporation,
it's good will and the unity of owner
ship, and the unity of use of it's vari-
GUS items of property, the value of
the tangible property of such corpor-
alton is increased, such increase of
value is nevertheless the value OF
such tangible property and the latter
is taxable under our statute at such
increased value"
Property combined and made the
basis of an enterprise for profit may
as whole be of much greater value
than the sum of the value of it's sew
eral parts regarded separately"
THE market value of the shares re
presents the value of the property Of
the corporation, subject to it's debts
whether secured by note or other.
wise"
In ascertaining the aggregate value
| of all the property owned by a cor.
poration, the amount of the debts, ii
any, of the corporation should be
added to the selling price OF the shares
of its capital stock"
The value at which property is tc
! be assessed under the tax law is the
value for purposes of sale and not
the value to the owner"
Under the term combined property
nothing is taxable which is not includ
ed within the definitions of the terms
real property and personal property.
The statutory definition of persona
| property is as follows:
Section 1915. personal PROP.
ERTY" DEFINED. The term per.
sonal property" for the purposes OF
this chapter, shall mean and include
all household furniture and effects
JeWelry, watches, goods, chattels, wares
and merchandise, machinery, ships Oh
vessels, whether at home or abroad
| all moneys in hand, leasehold and
chattel interests in land and real
property, franchises, patents, contracts
growing crops, public stocks ana bonds
not exempted by law from taxation
and all animals not in this chapter spe.
officially taxed"
The point which the writer wishes
to make in discussing the workings
of the unit method of assessment, as
above described and construed, is, thai
the economic value of human skill ant
personality although properly reached
by an income tax, cannot without spe
cific legislation be transferred from
| PERSON to PROPERTY and made g
basis of value for a purely property
assessment for taxation purposes, anC
that no occasion exists in Hawaii fol
such law, which is elsewhere applied
to particular classes of corporations
whose extraordinary economic faculty
or ability cannot for various consti.
tutional and other difficulties be ever
approximately reached in any other
way.
1t is to be observed that this portion
OF our general property tax law is moi
directed against corporations as such
1t is to the credit of our political
I leaders and our business men that the
I