The Mathews journal. (Mathews C.H. [Court House]) 1903-1937, 1910-12-01
0CE TAXES ON
VSTOCkS AND BONDS
Tax Commission Convinced That
New Plan Will Prevent Men
From "Dodging" Tax List
and Perjuring Themselves.
DR.. Freeman's Views.
r l c II No Nd, V A-speclal

DR.. Freeman Views.
r. C ND, A-Special.-
The State tax on stocks and bonds
viii be greatly reduced after 1913. If
the present plans of the State Tax
Commission are approved by the Cen
eral Assembly OF 1912. Instead OF
the present system of listing stocks
and bonds as personal property and
subJecting them 20 the regular State
tax on such property, the commission
intends TO recommend the separate
classification of intangible personal
property and its taxation at a differ
erty.
The plan proposed by the Tax Com
mission, and now being worked out in
detail by Commissioner u. s. Free
man, is known as the 'MarylandI
PLAN" and has been tested with great
success in the State which gives the
plan les name. DR.. Freeman has been
IN correspondence with the authors of
the law in Maryland, and has been
ADVISED OF the great success Of the
plan by his friend. DIR. Horace T.
Fioch' director OF the Bureau of Mu-
nlcipai research OF Baltimore. A full
report or the subject VIII be present
ed TO the Tax Commission. and il t.
expected that the bill on The subiect
VIII be drafted and introduced into
the next Assembly by Sneaker Rvrd
In discussing the matter this morn
ing Dr. Freeman gave out the follow
ing statement:
Tax Is Enormous
1t has long been apparent that
one OF the most onerous tax laws OF
the state is chat imposing tax on
stocks and bonds. The Stale requires
the listing and taxation o. This prop
ertN az It's market value and cNacts y
tax OF 50 cents ON the hundred dol
lars OF value In addition. the va
fr.y Il,
property at rates varying from S1.25
70 SI-tO. The result is a most unjust
burden on this class Of property. In
AieXandria, for instance, where the
inunlclpal tax rate is S1.7O. a Accent
bond, quoted at par on the market
ana listed for taxation, pays 10 the
city AUD the State Sos on every S4
realized from the interest on the Sc
curltN. The result is one of two things:
Either the owner of the bond does
not list IL for taxation. and periures
hlmselt I'm listing his property. or else
ne VIII move TO some other place
where the tax is not so heavy To
pay the tax viii be TO give half his
income from the property to the State
and city. The effect has been thai
not per cent. OF the securities own
ed in the state are ever listed for
taxation while there are cases on re-
coru where wealthy men have refused
TO live in Virginia because Of the
enormous tax levied on securities.
ASIDE from the injustice OF this
tax, the commission believes that IL is
poor policy to discourage the coming
Of capital into our midst by onerous
taxation one Of the canOns OF tax
alton is never TO tax heavily any prop
erty that may be taken away. and
never TO burden any property that
may be induced to come into the
State. We believe that the radical
amendment Of the existing law will
fulfill this canon, whereas at present
we violate il everywhere in the State.
Segregation of Property.
our plan is TO avail ourself Of
very excellent provision in the State
Constitution which permits the Assem-
bly, TO classify property for purposes
Of taxation after 1913, and to levy a
different rate on different classes of
property. We want Of course, to see
intangible personal property pay it's
fair rate OF taxation, but we believe
this rate should be much lower than
1t is at present In consequence, we
shall recommend the enactment Of "A
law which will fix a very LOW rate OF
State taxation on securities and Will
limit the amount OF tax to be imposed
by any municipality. In this way we
think just rate Of taxation can be
fixed.
1T is argued, of course. that this
will give intangible personal property
an advantage over tangible personal
property. and that stocks and bonds,
representing so much money invested,
will be taxed lower than houses and
lots, representing the same amount
Of money.
viii Catch Dodgers"
1T will be argued also that il stocks
and bonds do at present pay a high
rate on the income derived from them,
personal property pays the same tax
In another form, through the present
income tax. In theory this is true
but it must he remembered that prac-
ucally no tangible PERSONAL property
is listed at its market value in the
State, while intangible personal prop
erty, If listed at all. must be listed at
its full market value. 1t must also be
remembered, in answer to this argu-
ment that the present returns from
our income tax do not amount to
twenty per cent. of the real value of
this tax. and that men dodge the
income tax. just as they dodge the
tax on securities.
Will Benefit State.
AT the same time we are adVo-
eating lower tax on securities be-
cause we believe that aside from its
other advantages. this tax will bring
In a much larger revenue to the State
and TO the municipalities levying it.
Most men when convinced that a tax
is Just Will pay il. though they will
have no qualms of conscience in dodg-
ing tax which they think is unjust.
II a low rate of taxation be fixed for
stocks and bonds, experience has
shown that hundreds OF men who
never list this class of property will
do so. In Baltimore, for instance,
where the Maryland plan was intro
duced, the revenue to the city from
the tax on stocks and bonds increased
400 per cent. in six years after the
tax rate had been reduced more than
fifty per cent. Honest laws appeal
TO every man. They will appeal to
eur people just as they appealed to
Baltimore and will bring in more rev.
enue, while attracting capital"
NIGHT MApLIInER