Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1910-05-29
TAXATION ON LIFE PREMIUMS
Reasons for Opposing Impost Now
Carried by Insurance.
STATE CONTROL BETTER PLAN
Federal Supervision Not Only Unlaw-
full, but Undesirable, According
tor. w. Heron of the FideI-
ity Mutual Life.

Two monster questions are confronting
ali students of the life insurance industry,
tosthe overshadowing of all other subjects
Under the generic term insurance. accord
ing to F. w. Heron OF the Fidelity Mutual
Life Insurance company. Whether life in
surance should be subjected to taxation,
as II is. and whether the federal govern
ment should control insurance business
instead OF the several state governments
doing so. are the questions that have
brought discord and weighty theories from
all concerned.
As editor of tho Insurance Policy, a
Journal Of the profession, Mr.. Heron has
appeared in the forefront of many edi-
torial skirmishes over the theories.
Throughout the fight Mr.. Heron has fig
ured as a foe to taxation and to federal
control
"One OF tho greatest injustices put upon
tho American public" Mr.. Heron said in
an interview, lis tho taxation of life insur-
anco. The practice is purely penalty
upon thrift. why should person be
made to pay a tax for tho privilege OF
safeguarding his family7 Why should
foresight and thrift be placed under a
tariff"
From theS0 WORDS MI AlClOlA uNNSiNfNN
q stirring argument against the system
that is being carried out to the extent OF
bringing millions of dollars yearly into
the Golfers of various state treasures.
Tax Falls on Consumer.
He pointed out that one large insurance
company in Milwaukee alone turns an av-
erage Of $1,000 day into the treasury of
Wisconsin through the medium of the in
surance premium tax.
Though the tax is placed directly upon
the insurance companies, 1t falls in the
end upon the policy holders-the consum-
ers" said Mr.. Heron. The tax is taken
from the gross premiums ISSUED by the
various companies, and in anticipation Of
this degree of cost the companies guaGC
their terms to the policy holders CORE.
spondingly The insurance industry is moi
one based upon personal gain; its methods
are restricted to sale of the commodity al
cost Therefore, insurance premiums
frelghted with state tax go to the policy
takers at strictly the price 1t costs to pro
duce them"
Mr. Heron further drew a comparison
between England and the United states
He explained that in England the govern
ment has realized the sacredness of thrift
as shown in the impulse of individuals t
provide for those dependent upon them
and has exempted one-sxth of a mans
income from taxation. provided he ex
ponds that amount in life insurance.
object to State Supervision.
In closing his argument, Mr.. Herol
said: THE insurance departments of tn
various states were formed for the pur
pose of protecting the policy holders from
corporate grating and despoiling Thes
departments are not assumed to have tn
function of raising funds for the stat
treasury Taxation, therefore, Is a medium
they have taken up illegally and withou
due reason.
Concerning federal control. of life in
surance, Mr.. Heron expressed vigorous
IDEAS "There is really no need of dis
cussinE the good or bad of federal contro
of insurance" he said, ''since such con
dition can never be brought about. Fed
eral control can by no possibility
brought into existence under the Unite
States constitution"
The insurance man explained that 1t ha
been decided the insurance business wa
not interstate commerce, and that upo
that premise the industry was forever sc
beyond the jurisdiction OF the nationa
government. Further than this, he argue
upon the expedlency Of taking control ou
81 of the hands of the state governments.
Reasons for Company Control.
at is a0well recognized fact" he SAID
that a private institution can conduct II
business at less cost and with better re
suits than can the federal government
The affairs of the postal department ar
an example of this fact. To place the In
surancs business under supervision OF tn
federal government would simply mean
put the entire industry in the position c
the postal business on the other hant
It is a trusm that one administrativ
body can be controlled for evil purpose
more easily than number of such bodie
Therefore, there would be more DANCE
of improper tampering with Justice an
4 the affairs Of the public through tho fec
eral government than could be dor
through the many state governments.
is far better to leave the supervision {
Insurance in the hands of the latter"