The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1910-02-21
MONDAY. FEBRUARY II. 1910.
poN.r RAISE THE INSURANCE TAX


DON'T RAISE THE INSURANCE TAX.
1t may never be easy to tax Justly,
but 1t is always easy TO tax unjustly.
The Senate has been debating for days
over tax reform and has found some
difficulty in deciding on even method
of procedure; but 1t has lent its ready
approval TO at least ono new tax law
which appears to us distinctly unfair
and unjust to thousands of Virginia
tax payers.
This is the law raising the tax on
life insurance companies from to l e
per cent. of their premium Income
n bill which was reported from the
Irinrnce Committee and championcd by
its chairman AS explained by Sen
ator Keczell this tax should be levied
because the State needs money, because
the insurance companies have money /
and because they arc carrying many
millions OF dollars out of the state |
every year
The first reason appears valid. me
state certainly needs money. But TINS
reason for the tax applies as well to
& thousand industries as to the insur-
ancc companies. The other two rca
sons for the tax are not sound or de-
fens,ble Many of the large insurance
companies operating III Virginia are
mutual concerns. Their funds belong
not to New York capitalists. but to the
poIicy-holders. The companies have
not dollar of their own funds, but
are trustees, under stringent laws, for
tho thousands of policy-holders
throughout the country. Risks are no
longer .loaded" for the benefit of New
York brokers, but are so strictly ad-
3usted that every dollar of profit re-
verts to the policy holders in divi-
dends. The stock companies oper-
ate on practically the same basis.
Their dividends are fixed by law; the
net profit to the owners is usually not
great.
The third reason alleged for the new
tax is not accurate. The companies
To be sure, a few companies which
have recently entered Virginia arc
receiving more money from local pol
icy-holders than they are distributing
TO their members. But these are tn
exceptions. The insurance cL.npanie
as a whole pay more money into tn
State through maturities. loans. dealt
losses, taxes and commissions tina,
they receive in premiums. Nor is thi
all. Instead of spending Nirsini;
funds to exploit New York or Western
Industries, the insurance companies
doing business in Virginia to-day have
more money invested in State securi-
ties and State enterprises than the
total amount ot the reserve on policies
held in this State. On such basis
the insurance business is upbuilding
instead of injurng the State
There are as strong arguments
against the taxaqe ~theLe are against
the figures broWg hs"forward in the SEN
!. ate to support It. For example, if
taxes are increased the loss will not
be on the companies. They have Moth
ing of their own to lose. The loss Will
,fall on the policyholdcrs. Every man
who holds policy will pay, through
decreased dividends. for what he has,
AS member of the company, to pay
;the State.
But there is still another and most
serious objection to the tax. The in
crease will be discrimination against
Ia class of citizens which can i'll afford
1.-The expense. The time has passed
Jury of the rich. Ii is now a protec.
dive necessity of the poor. Men put
money into insurance who cannot in,
vest in real estate. Men protect theil
families in this way WHO could no
,protect Thorn by gradual saving. /
.certainly is not just, under the circun
stances. that these small savers Shout
1be moro heavily taxed upon their pro
,tection than the owners of real cstat
Cor personal property are taxed on thei
Investments. But If this tax become
law. the owner of an iS,saa..:.-ssesa polio
will pay heavier State taxes than tt
real estate, owner will pay upon h
property and upon the taxable incoir
from his property.
We pass over the. objection that
steady Increase in insurance take
would ultimately drive the insuranc
companies from Virginia, as they wer
sriven from Texas. and viii ruin til
occupation OF at least u thousand sui
stantial business men, We do nc
mink this argument is necessary. w
believe that the House Finance Con
-nittee, in acting this morning. viii SC
The Injustice OF The increased tax al
viii promptly dsapprove it.
----=---=--
IOTHEADs IN THE FARMERS As
ISOLATION.
The outbreak OF threatening lette,
o tobacco growers in the Danvil
district is an ugly surface sympto