The Bennington evening banner. (Bennington, Vt.) 19??-1961, 1911-11-04
Taxing lntansibles

A correspondent in this paper has |
recently called attention in two com
monications TO the virtues OF the So
called fiat tax rate on intangibles
Such a tax was embodied in a meas
ure that passed both houses OF the
legislature at its last session, near
the closing hours, was vetoed by Gov
ernor Mead, and failed OF passage
over his veto in the House at the
very last, when less than voting
quorum was present.
The fiat tax proposition contem.
plates removing from the town grand
lists all money, investments, loans
and the like now returned. A new
system for their taxation Is proposed
by which the owner returns them to
the state for that purpose, and pays
the state at the uniform rate OF sew
en-tenths of one per cent per year.
This rate is established in uniform
ity with the rate that savings banks
and savings institutions OF all kinds
now pay on their deposits in the
same way. Whether the revenues
from this fiat tax are to go to the
state treasury, or whether they are
to be divided back among the towns
in the proportion in which they are
paid, or by some other form OF divi-
sion, is a detail of the plan, the essen
tials OF which take precedence.
II is claimed for the fiat rate that
the effect of such a system will be
to uncover a large amount OF intan-
| gibles that now evade taxation be-
cause of the high local rates. and
that growth in revenues will re-
suit. But more especially 1t is claim
ed that such tax will put an even
er" on the individual with money to
loan or invest and the banking insti-
tuition in the same condition, where
as the latter now possesses an advan'
tage that virtually gives 1t monop-
oily in its line, through the lower tax
rate il has to pay on its working cap
ltal And as result Of the competi-
ton in fair field that will follow
II argued that the borrower will be
able to secure money at lower In
terest rate-a consummation toward
which persons OF different minds re-
garding means earnestly look. These
are the chief advantages of the fiat
tax system, as its advocates maintain
Il is argued that the borrower will be
would do much to correct the Unequal
tiles and injustices OF the present
method, would foster enterprise and
industry and improve the lot Of those
who depend on the capital of Others
for their means to do business.
On the other hand are those who
are skeptical about the advantages Of
the change proposed; who fear Il
would add to, rather than take from
the burden of the poor people and III,
borrowers; who see in the radical dis
turbance that would result a balanc,
of injury, rather than benefit. to tn,
state as a whole. Some of the rea
sons for this belief are
+ Admittedly the withdrawal from
the local grand lists. which through
out the state are subject to an aver
age local tax rate Of Sl79. of al
+ amount estimated by those who favo
J. the change at ten per cent OF thu
D whole, representing the socalled in
tangibles-the withdrawal of thi
would lessen the local grand list
E materially and increase the local Ia,
v rate on the tangibles left to be tax
/. ed, such as houses, farms, lands AM
o ordinary personal property. Ninet
per cent would have to pay what on
/ hundred per cent now pays. That |
, one OF the certainties OF the proposes
8 system. AS opposed TO this certain
!. ~, we have the suppostion that
intangibles are taxed at a lower rat
i more of them will come out to b
4 taxed We doubt this. II man 4
x successful now In covering his prof.
erty from a Sl79 tax, We do not thin
he will yield more readily to tn
, Establishments OF a $40 tax-o
Q enough so Il will figure very large 1
s the aggregate. A dog that objects I
/, having his tail cut on half the lengt
from the tip won't voluntarily one
II when only quarter OF II is 10 b
70 taken off. To assume that person
o who have been hiding their none,
\. stocks and bonds all their lives wi
!, be seized with twist OF conscienc
u when the ta= rate is dropped one.ha
n or more is TO misread human natur
10 We should see virtually as much Co
= ering Of such property as we now SC
or rather don't see, because Il
- covered so carefully. BY no posi-
II ility would towns that gave up a ce
IS tain Sl.I9 levy on this species of DR.
il perty ever realize as much on Il fro,
$40 rate. And the loss would IA
upon the holders OF tangible propert
q worst OF all upon holders OF NOR