The Union times. [volume] (Union, S.C.) 1894-1918, 1915-09-03
SOUTH CAROLINA'S
TAXATION PROBLEMS
(Some Special Phases.l

tire state is benefited to a greater
or a less degree whenever a good
highway is constructed. Therefore,
collect one half locally where the
greatest benefits are received, one
fourth of the country where road is
located, and the remaining one-fourth
from the state at large. But this is
Il matter of such great Importance that
it cannot be properly considered as d
mere incident to the subject of taxa
tion. will only say that we can
never reasonably hope for a system
of good highways as long as we mud
die along in tn" present manner.
We will have to have a StaI, lepart-
nent of highways, presided over bv
a man who knows the business of
road construction and maintenance
All under him will have to receive
their positions on account of their
knowledge of this line of work and
not on account of their political pull.
This is a tax that might to great
extent be borne by special tax.
There is one class of personal prop
erty the taxing of which is very much
misunderstood, that is. monies and
credits. No plan that l know of has
yet succeeded in placing any very
considerable percentage of those on
the tax books. Some may argue that
the State might force the banks to fur
nish a list of depositors, with the
amount to the credit of each and thus
reach a large percentage of the
money, but this could and would only
each the state banks and would prac-
ticallv mean their death. as their de-
posits would all be with drawn and
placed in National banks. But sup
pose it could apply to all banks. in
that case a very large percentage of
deposits would be with drawn, thus.
for the time being, taken out of the
channels of trade. Think of the de-
morallzation of business that would
enSue. We would have home made
panic far worse for US than the great
est ever pulled off by Wall stret.
for these reasons monies had best be
exempt from taxation, or the rate be
very low, not more than one-fourth
of the maximum, then a large per-
centage might go on the tax books if
the penalty for non-return be made
very heavy.
AS to credits, if the security is al
ready taxed, then to tax the debt is
double taxation. no more or less, for
it is collecting taxes on the property
which /; tight, then it collects on the
and the property pays both. True,
the latter is an indirect tax, collected
by high interest charge, but. how
ever collected, the debtor does the
paying and in a large majority Of
cases the State secures no revenue
t:,er"Trom. The creditor taking iis
crarceG of being caught, which IS
very small. A far bette. way is to
collect fixed charge of cne-fourth
or one half of one per cent when the
paTcr is recorded, then yol will see
who pays this for it will be deducted
when the loan is made Just as the
present recording fee is now deduct
ed. With this fear of full taxation
removed the interest rate could, and
should, be lowered at least one per
cent and possibly more. By this
plan the government will derive a
larger revenue from this class of
property and debtor class will be
greatly aided by securing cheap..
credit.
re State has a bonded debt for
about six million dollars ($6,OOO,-
000.00,) bearing interest at l-2 per
cent. This debt should have been re-
funded January 1913 at arate OF 2
per cent, thus effecting an annual
saving of $30,000.00 per year for
twenty years, or a total OF $600,000.OO.
1t has not been done, the reason Civ
ing that the bond market has not
been favorable. This may or NAV
not be true at the present time, but
with a comparatively slight change
I our laws the refunding could have
been or can yet be made a great deal
easier, if our General Assembly will
enact the necessary legislation.
The aggregate bonded ndebt-
ness of the counties of the State in
1913 was more than S3,5O0.OO0O. the
average interest rate being about 5 1-2
per cent. The aggregate out-Stdni-
ing school bonds at the same date
was more than $2,O00,00O.0O. and the
average lnteeSt rate slightly higher
than for county bonds. | have unable
TO secure the aggregate bonded in
debtedneSS of the various municipali-
ties of the State but feel safe in esti-
mating that they are as large or
larger than for the counties and the
interest rate about the same. Ger
tainly the bonded Indebtedness of the
counties, school districts and munich
pallties of the State in the aggregate
will amount to at least $4,000, ,OOO,-
90, and the average interest rate )
IL per cent.
Each Of these debts has a sinking
fund and commission to manage the
same. Thus in the State are many
local sinking fund commissions, each
handling annually comparatively small
and investing these sums
locally. Naturally these investments
are not always wisely made, various
counties in the past have suffered
heavily from losses on account of
these bad investments made by these
local commissions. These being well
known facts to the investing public,
each and every one of the local bond
issues are floated at i high rate Of
interest or are placed at lower price |
in the beginning than would have been
the case had the law required all these |