Clinch Valley news. [volume] (Jeffersonville, Va.) 18??-2019, 1912-02-23
indirect Taxation

indirect Taxation
Ii policyholders in American life
insurance companies realized that
every State in The Union was engaged
in the profitable practice of taxing
their insurance premiums, they might
bestir themselves and try to abolish
this unjust expense by appealing to
their local Congressman or wr. ting
, letters to their respective State In
surance Departments. The States not
only tax the real property owned by
the life insurance companies but also
for the chief reason that they ne ed
the money put an obligatory tax
upon the voluntary tax which the
l thrifty citizen puts upon himself
when he pays his life insurance pre-
MUM.
About four years ago the State of
New York joined the procession by
instituting this so-called Franchise
Tax of one per cen, which it has
vigorously collected ever since, and
many other States tax as high as two
und two and half and even three per
cent, the premium receipts collected
by the various companies. AS an ex-
ample of how much is thus collected.
the three great New York companies
alone paid nearly two millions of dol
lars last year to the several States,
exclusive of their regular taxes.
The various life insurance compan-
les realize the injustice of this tax
and do all they can to fight it, and
the Association of Life Insurance
Presidents watches the various prop
osed bills of State Legislatures which
are aiming to increase this tax and
strives to show the injustice of them
as we'll as to procure more uniformity
of rate throughout the State and a
decrease In them all. But still the
system goes merrily on because the
States claim that life insurance
company which does business within
their confines should pay something
for the protection it receives. A
State claims that the supervision
which it exercises is an expense,
which the company should properly
pay for. The answer to this is that
the expense to the State of supervis-
ing the business of company which
pays, say, $500, 600 in premium tax.
es to that State, would probably moi
exceed $40, 600 or SIS, 900.
1t is temptingly easy way for a
State to add to its funds, for the peo.
pie generally look upon large life
insurance company as rich corpora
tion, that can well afford to be" soak.
ed and the policyholders of that
company are comparatively few In
number, and those few do not realize
that the taxes come Indirectly out OF
their own pockets.
The hackneyed argument that this
is a tax upon thrift does not make 6
very strong appeal, because most tax.
es are upon thrift. A man saves
money and builds himself house, ant
this house is taxed. That is also a ia,
upon thrift, but, as Daniel Webste,
first pointed out, a premium tax is 4
tax upon taX-an enforced tax upor
a voluntary tax. A man takes out in.
surance upon his life. not for his owr
comfort but for the welfare of his de-
pendents, to keep his family from
becoming charge upon the State
and he is taxed by that State for Sc
doing. His neigbhor is not so unset.
fish; he does not insure his life, he
pays no premium and no premium
tax; he dies, leaving his dependents
unprovided for, and his neiehbors-
inluding the man who pays his pre-,
MUM tax-pay taxes to support or
phan asylums, homes for the aged,
and so on.
This iniquitous tax is not brought
home to the policyholder, because his
company pays it. But while the COM
pany pays it directly, its members
pay it Indirectly. because the insur-
ance costs just that much more to
/ m Infotr Tho T.