The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-01-29

collected from all insurance COM
panies of the United States through
insurance departments amount in
fees and taxes to $12,0OO,00O. Ap-
proximately $2,00O.OOO Of this come
from the fees and $10,0OO.OOO from
taxes. Commenting on this condi-
tion, Hon. e. e. Rittenhouse when in
surance commissioner of Colorado,
lid: 'Inasmuch as the fees more
li.. raNide for the most of operat-
r.s.sOfIc., 'ments, 1t is safe to say
that' 1000 per year repre-
sents, the dty which the law is
enforcing against the insurance busi-
ness
Statistics compiled by the Associa-
tton of Life Insurance presidents
from the official reports of thirty-six
states and territories and the District
of Columbia show an astounding dis
parity between the cost of the SUPER
vision of insurance and the amount
collected from the policyholders. In
only one Of these thirty-seven cases
does the amount of tax approach the
cost Of the supervision. In the thir-
ty-six other instances the amount of
the taxes collected ranges from four
to seventy-four times the cost of SUI
pervision. Next to the state that
charges seventy-four times the cost
OF supervision comes one charging
forty-One times such cost. In four
other states the taxes collected range
from thirty to forty times the amount
expended to conduct the insurance
departments. In eight other states
the proportion ranges from twenty to
thirty times. In thirteen others the
proportions is from ten to twenty
times. In nine others, including the
District of CoNubia it ranges from
4 to 10 times. VNext and last in the
downward order is one state which
collects only 2-3 per cent Of the cost
OF supervision. 1t is interesting to
note that this state imposes merely
an annual license fee and yet the pro-
ceeds are more than sufficient to meet
the cost of supervision.
Your able insurance commissioner,
the Honorable Il. C. Cooper, estimates
the annual cost of maintaining your
insurance department at $25, 1000. 90
against which the North Dakota de-
partment has received the following
sums IN taxes aud fees during the
last five years.:
Total
Taxes Fees Receipts
1905 $59.121.66 $15.5S4.OO 5 74,7O5.6 sc
1906 66,6S9.64 , 100000 S5,99S.64
1907 T,630.75 21,3825O 99,O13.25
1908 S4,493.06 23,198.OO 1O7.691 .O6
1909 95,129.06 25,714.50 12O,S43.5G
Then the speaker lent on to show
the injustice of the rates of premiums
collected as compared with the taxes
IN business industries and the like,
In North Dakota he stated the pro-
portion of the tax to the gross pre-
MUM was 2.5 per cent, while the aver
age tax in the states is IL per cent
on each dollar paid. The lack of uni
formtty In taxing life insurance COM
panies was also taken up and the
speaker had the following to say:
This lack of uniformity produces
gross injustice as between the differ
ent states and causes the policyhold-
efs OF the states taxing the lower
rates to be contributing to the nav
ment OF taxes to other states. DIFF
ferently expressed, it / sanother case
OF taxation without representation
the same sort Of tyrrany that our fore.
iathers took up arms to resent in the
days of &c. 'Ao
Reforms Needed
"Old line life insurance contends
for two reforms: First for red,o
tion in life insurance taxation and
secondly. FOR uniformity as a matter
Oh common justice between the differ
eHt states. In both these contentious
ss":4l !Sol.n Dakota as state taxing at the
mlNlmum rate is to be urged to make
e concessions and reductions, IL not
~ the minimum tax rate, at least in
ea,, Una! direction to the point of not ex-
ceeding the average"
In Offering up remedies for tho
proper taxation of insurance con,.
panles, r. Graham made the follow-
ing suggestion:
10 base the premium tax. not on
the gross premium but on what nav
De termed a net receipt basis. which
would provide for the deduction from
the gross premiums of dividends. sur-
render values and death losses.
I'm a brief before the International
Tax association, this phase of the Sit
uation was put as follows: let life
insurance companies be permitted to
deduct from their gross premium col.
lections within the state, all money
returned to the state within the wear
under their policy contracts, such a.
oeath losses. dividends, surrender val
ues and also expenses paid on ac-
count of local agencies. Then let the
premium tax be applied to the balance.
IN eject this will not make much re-
duction to companies just entering the
state nor on new business of any com
pany. 1t Will, however. work a re-
duction OF tax to every company in
proportion to the amount of money it
returns to the state during the year
for which the tax is imposed
continuing along the line that such
taxation is excessive, Mr.. Graham
made a plea for North Dakota to start
the movement towards lowering the
tax, because its rates were unusual-
ly excessive. He said in part:
Lie insurance taxes either in