The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-11-19
1.-THE WAR TAX ON PREMIUMS.
A Protest Against Their Collection by
the Insurance Companies.

] To THE EDITOR OF THE SUN--Sr: II
| has come to our notice that the war rev.
enue tax of 1914 applying to insurance
premiums is to be collected from the In
surfing public by the insurance companies
through the medium OF adding tho tax
| to regular premiums charged.
1t seems to US that in doing this the
insurance companies are shifting their
| burden to the business men. who are al
| ready very much overtaxed. Tho arsu-
ment may be used that these taxes must
| eventually be paid by the public, but II
Is our opinion that they should not be coll
| lected In the manner intended by the In
| surancs companies. Insurance policies are
very frequently subject to cancellation or
reductions In amounts and in rates, which
| involves return premiums. paid to the In
| suring public by the companies.
The law requires the insurance COM
panies to pay one-half Of 1 per cent. on
| their premiums. 1t has been held by some
| that the law does not require stamps to
| be attached to insurance policies. and that
| tho companies might be allowed TO pay
| tho tax direct to the Government on their
net premiums. The insurance companies,
| however, are endeavoring to shift the re-
| sponslblity by attaching stamps. and IL
| perchance they issue TO us policies the
premiums on which are 81 900 they will
attach stamps to the amount OF 80. 1f
! subsequently, the rates OF our insurance
should be reduced, which In our case We
nave reason to believe they will be- and
| our premiums are reduced to $500. we
can secure no rebate ON these stamps X
attached 10 the policies. If the insurance
companies were permitted to pay a tax
| direct to the Government on their net
| premiums, this unjust loss to the insur-
ing public could be avoided.
As we read the law we do not believe
| that II is the intent Of the Government
20. fl,x an It,utt ~
from the pollcyholders. as contemplated
by the I'm urance companies. If you will
refer to the law you will find the follow
ing phraseology as a part OF tho para
graph referring to the tax on Insurance
policies:
Purely cooperative or mutual IRE insur-
ance companies or associations carried on
by the members thereof. solely fer the pro-
lection OF their own property and not for
pront are exempted from tho tar.
Further We find that life, personal ac-
cident. health and workmens compensa-
ton Insurance, all of which classes seem
to be largely personal with the insuring
public. are excepted This confirms our
opinion that It was never the intention Of
| the Government that this tax should be
| collected from the policyholders. Fur
| thermore we doubt whether the insur-
ance companies under their charters are
| permitted to act as a collection agency
| for the Government in respect to these
! taxes. and we beg TO refer you TO para
| graph IA Of the insurance law OF this
! state. which reads as follows:
It shall not be lawful hereafter for q frs
! Insurance company or for any officer. mana
ger. agent other representative of any
such company. to include In the sum
! charged or designated In any policy as the
| consideration for Insurance, any fee. com
! pensatlon charge or perauisite Whatsoever
| The above seems to forbid the charging
| OF any consideration other than the pre-
| MUM for insurance. We are reliably In
! formed 10y experts in The insurance bust
! ness, representing the insuring public,
| that the collection of this tax from the
public by tho insurance companies In the
manner Intended will result In great hard
/ ship and loss TO the insuring public. owing
/ 20 the peculiar conditions under which
| the Insurance business Wit. its vast detail
L. conducted.
! This law becomes effective on December
/ !. and we urge that this matter be re-
! ferred 20 the proper committee for advice
I and counsel. and X our views are con-
hrmed We trust that vigorous action will
/ he taken 20 avoid what we consider the
! preparation OF an injustice upon tho al
ready overburdened insurng public.
\. G. WEssM.SN,
President j. i. Tspey Company.
Nrw NoRE, November II.