The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1908-09-05

! l9O4 81, Al ,00S,03l lZb,4l3,24o
1906 9l,071 42,965.532 29,376,413
1907 1867 4,l3S.96S 1879, 709, 702
1t will be noticed that personal prop
erty taxed has decreased $4,000, 900 in
the last twenty years while the real
estate has increased $30,OOO,O00.
Taxation Of Intangible Property Uni
form Low Rate Recommended.
The discussion OF this subject
comes naturally in connection with
that of offsets and many of the facts
and arguments under Offset are equal.
by applicable here
The commission is unable to make
a unanimous recommendation relat-
ing to this subject
Three of us recommend that the at.
tempt to tax intangible personal pro
lperty at local rates be abandoned and
that all property of this character
subject to taxation be taxed at a uni
form low rate throughout the state.
We believe Vermont must adopt this
plan or abandon altogether the direct
taxation OF intangibles.
We are aware that our recommen.
dations may be deemed radical and
may be severely criticised We ex-
pect the argument will be urged that
our plan discriminates in favor of the
rich man and against the one Of mod
crate means. Under the existing
laws, however wealthy owners of In
tangible property now practically es-
cape direct taxation thereon.
For the sake of a clear understand
ing, it will be remembered that in
tangible property means such symbols
of property as notes, mortgages, GER
tifcates Of stock, bonds, book ac-
counts or other evidences of debt,
none Of which have any appreciate
value in themselves, but are valuable
merely as they represent tangible
property which, theoretically at
| least. Is otherwise taxed
II The taxation Of these symbols OF
property is generally spoken of by
economic writer's as double taxation.
The effort TO tax intangibles at a
high rate. or at the same rate that
real estate is taxed, has never so far
as we are able TO learn succeeded
| because of the ease with which prop
! lerty of this class may be concealed
lchanged in form or shifted from one
jurisdiction to another. II would be
a useless repetition to quote al
length from the reports Of the com
missions OF other states upon this
subject. They all reach practically
the same conclusion and agree tina
whenever the attempt is made to tai
intangibles at the local rates prevail
ing as to tangible property, the great
er part of intanglbles escapes taxa
ton altogether.
The outcome of the commission
investigation is substantially this
the attempt to tax money credits an,
securities at the same rate as othe
classes of property has everywher
and always proved failure. In on
American States the result has beel
that the assessment of intangibl
property decreases either absolutel
OF relatively as wealth and popua
tion increase. We can find no exceI
ton to this general rule, and ar
forced to the conclusion that ou
present laws are at this point fundf
mentally wrong"
The underlying reason why intanl
ibles can never be uniformly and SUE
| cessfully taxed at anything but a rat
lower than that which on the ave
age now prevails In this state is, tina
| at such average rate the burden {
taxation on this class of property b,
| comes so heavy as to operate as
| partial confiscation thereof; in fac
| this system has been aptly characte
| lied as "confiscation tempered by ia
| oritism,"
| To illustrate. taxpayer owns a 81
| curity paying $3.50 per annum on SIC
| the average rate of taxation is s
| least $l.50 on the dollar of the gran
| list. This class of property is a.
| praised at its full value, II appraise
at all, so that out Of every $3.50 whiC
the taxpayer receives as income @
his investment, he pays $1.50 in Ia
es. In other words 80 1.3 per Gel
| OF the income which he derives fro
| his investment must be paid for ia
es, and in this instance he Is left wit
a net income of SO on each 500
AS the tax rate increases so do,
| the degree of conflscation increas
| In many towns the average tax ra
| reaches so on the 800, in some II
|
| payer is contributing from A to
| 2S per cent of the income of his
| per cent investment in the payne
OF taxes.
If the investment pays less the bt
| den is correspondingly greater.
Illustrations may be indefinite
multiplied along this line, and the
are few, If any, towns in the sta
where the rate Of taxation is now
low that the taxation of intangibl
under the present law, does not res
in imposing an excessive burden up
this kind of property,
II may be said we have assumed
too low interest rate on the inve
ment But assume a per cent int
est rate and a $3.50 tax rate, and tn,
conditions are much more favora
J than the average, and the taxpayer