The Leon reporter. (Leon, Iowa) 1887-1930, 1911-02-09
SHALL MONEY AND CREDITS BE
TAXED?

TAXED?
| The proposition now before the
lawmakers of this state to take the
tax off money at first sight appeals
to the average man as unjust. The
question is hard to understand, and
the Sioux City Journal elucidates
the matter so clearly that we clip
the article in full, hoping our read
ers will read it again and again,
giving the matter careful study as
| the question is up, and will not
down until it is definitely settled.
The article follows:
! referring to the proposal to ex-
empt money and credits from tax
alton, a friend of the Journal asks
the old, old question. Why should
a man who has $4,000 in cash or
credits pay no taxes, while the man
step up to the treasurer's Office and
settle? Why not force the man with
the cash to help bear the burden of
government as we'll as the man with
the land? If necessary why not en-
ploy a tax ferret to make the man
with the cash pay his share of taxa
| ton? These questions have been
| asked a great many times. The
superficial logic back of them has
been sufficient to keep the tax on
| moneys and credits and to furnish
employment for the tax ferrets. 1t
| is only when one goes beneath the
surface that one finds the imprac-
| ticability of the tax on money-the
impossbility of really reaching it
| under our present taxation system.
The Journals friend who asks
the old question is no doubt farm
err, who has his $4,000 in property
that the assessor can and does get
at easily. Doubtless he has friend
who owns no real estate and no
business, but who gets his income
from money loaned one way or the
other. Is there no difference be-
tween the situation of the two men,
SO far as the taxing power is con-
cerned? The farmer can see none
Very WELL Then let him sell his
farm for $4,000 in cash and see
how it. looks. with his farm the
man was rich. With a reasonable
amount of work and prudent man
agement on his part the farm
brought him good living. BY Gull
tivating it he added annually to the
worlds store of wealth. But what
is he going to do with his money to
make it support him? He has no
land to plant it in, and if he planted
it it would not grow. He can jingle
it, but that would not get him any
thing to eat or drink, or wear, al
nil
In order to avoid starving to death,
although he is still worth as much
as when he had the farm,
he will have to put his money to
work in the conventional way. If
he wants to make it work himself,
he puts it into a grocery in the coun-
ty seat. And Immediately he finds
himself paying his share of taxation,
the same as when on the farm. If
he wants to sit in the shade, he lends
the money to some one who wants
to make it work, and who is willing
to pay interest for the use of it,
All he gets in return for his cash is
piece of white paper carrying some
body's promise to pay it back, with
perhaps pledge, that if it is not
paid back farm will be yielded up
in lieu of it. Having loaned the
money at a good rate of interest,
the man who sold his farm is still
getting an income out of the pro-
ceeds that ought to pay taxes. Sure
enough, if any one could figure out
any way of making him do it. But
he no longer has the farm, and he
no longer has the cash. The man
to whom he sold is working the farm,
and the man to whom he loaned has
invested the cash. 1t has been in
vested in some form of property
on which taxes must be paid
maybe another farm, maybe a stock
of dry goods. The farm is paying
taxes in the old form. The proceeds
of the farm are paying taxes in
new form. Does the retired farmer
want to pay taxes on the piece of
paper that he holds merely as Sc
curity for wealth someone else is
developing?
The Iowa law says man must
pay taxes on cash or on a piece of
paper recording the loan of cash.
The law says this, but with all it's
machinery, supplemented by the tax
such tax. The miser, who is sat-
isfied to look at his hoard OCCASION
ally, buries it in the cellar, and the
assessor cannot find it. The thrifty
man lends it to a man who wants
to make it work, and who is willing
to pay for the use of it. If the evil
dence of the loan is such that the
law can get at it, and the tax is i'm
posed, the man who lends the money
makes the borrower pay the tax. 1t
may be included in the interest rate,
but the tax on borrowed money is
paid by the borrower just as surely
as the tax on a rented house is paid
by the renter.
The tax on moneys and credits is
not a tax on the money lender and
mortgage holder. 1t is a tax on the
borrower, and it is double tax at
that. He pays tax on his loan,
and on the property he has bought
with the borrowed money. Under
standing does ANYBODY consider