The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-02-15

In the mercantile and manufacturing |
industries here and these millions |
(bcsides the real capital taxcd) are
not part of the real assets OF those
borrowing the money, and II taxed az
capital of the borrowers, would not |
only destroy the struggling indus.
tries. but many successful ones.
No industry would locate In u COM
mnnity which not only taxed the plan,
and machinery as per assessments
(Which Is just) and which taxed al
real capital-that is. cash in bushes.
(which is 1ust). but In addition re-
the money they borrowed in order to
carry the extra credits on their books
and to pay for labor. materials. etc.
in the course of business.
Double Taxation.
If we suppose that tho industrial
establishments OF this State are made
to give In their just taxes in the form
of assessments Of plant and machinery
and actual cash owned by tfem over
and above their liabilities to banks and
other merchants and manufacturers.
then the necessary money borrowed by
them from the banks belongs to the
banks, either az capital or surplus,
which Is taxed, or to the bank deposit
tors as balances. These depositors'
| balances on hand February are also
supposed to be taxed. consequently all
money borrowed by the taxable indus
tries from banks. etc. in the State Is
The jury has placed a common scnse
construction on this statute. and have
taxed only unimpaired capital In bus-
ness. and still found large amounts OF
actual, net capital untaxed. as the citi-
zen. In putting his own construction
on an incomprehensible law. naturally
constructs 1t In his own favor.
Needs New Definition.
In TACT TO accept the definition of
capital in business" heretofore men
1 mi
would, in our opinion. mean the indict-
| ment of practically all business men
throughout Virginia who borrow money
for the conduct of It's industries and
| also Tor Investments in taxable securi-
| ties Capital in business (for taxa
tion) should mean the balance of tax
able assets over and above Just debts
and the exemptions allowed by law
| II this definition or some other
| equally as clear and equitable were
written in the law there could be no
we'll founded Ignorance" of the laws
meaning-and the law being founded
| In equity and justice there could not
exist the excuse, We find so widely
prevalent that the present laws being
seemingly intent on double and triple
taxation Of business. evasion was not
only pardonable, but necessary to self
| preservation.
The State should provide a special
form for manufacturers" and spe-
| cial form for merchants" showing
clearly, like the United States excise
tax return, just what was to be con-
sidered as gross assets" and gross
| purchases and giving the specific
legal deductions and Just debts"
| showing clearly the balance for tax
alton as nee capital or net purchases.
as the case might be. Such forms
| would be made out and sworn to by
| the proper officers of the corporation
or the partners In general partner
| ship. Such forms, If clear and spe-
| cihc would leave no excuse for ''lg-
! norance.'' and If founded on q lust
law would not tempt evasion. They
! could be readily detected, If in error.
| or verified from the books OF the com
panies reporting. At present, however.
| there does not seem to be any deduc-
lions for anything, debt or otherwise
SO THAI under the present law such
forms would be valueless. We do not
see how the State can expect to exact
a uniform tax when she appears 10 he
trying to adapt eighteenth century
laws to twentieth century business
conditions
Proposes Reforms.
The methods of assessing and col
lectinS the taxes by the State seem
thoroughly unbusness-like and cum
| bersome.
The jury ventures to suggest some
remedies among them that the com
mower beyond simply accepting" or
refusing" return. Better still, that
the State select certain specific sub
jects for taxation. raising from them
what revenue she requires. and Ieav-
| ing the remaining subjects for local
purposes.
We might suggest tax commission
| to see that the returns were eQualzed
but we are emphatic in stating that we
believe tax commission, turned loose
on the people of Virginia, with author
| ity to enforce the antiuuated. present
| tax laws of this State, with n strict
construction Of the present laws as to
capital" Credit moneys" bonds"
loans" and other intangible personal
! property. would be the worst calamity
that could befall tho State. While it
| would give the State for little time
! Immensely Increased revenues at its
| present tax rate, it would eventually
! drive away or bankrupt half Its indus
| trial enterprises. We can conceive OF
nothing that would be more disastrous
to our people than commission
| charged with literally enforcing the
present tax laws of the State In their
strictest con 1truction and supposed
meaning. There is no doubt. from
what we have seen. that with the pres
| ent tax rate the State could greatly
| Increase her revenue by placing the
most liberal construction on her term
of capital and equalizing her assess
mcntS on real estate and tangible per-
sonalty. were she to make any sort of
| impartial and systematic attempt to
! go behind the returns, but until she
! establishes some reasonable and some
sensible standard of taxation she
should not attempt ii, unless she de-
sircs Il condition of industrial chaos.
The local jury system of examining
| tax returns means only that cOmmuni-
| ties who arc intent on evading the law
VIII continue to do SO. and communi-
! ties which are conscientious in the dis
| charge of their duty will hear an un-
| just proportion of the burden, and il
| the cry for tax reform in the State re-