The broad ax. [volume] (Salt Lake City, Utah) 1895-19??, 1916-10-14
BUSINESS MENACE
IN OUR TAX Law
Would Take One-Half of In
come on Savings Deposits
and Fully One-Fifth of
the Ordinary Secur-
ity Returns.
LIFE INSURANCE IS TAXABLE
AlIe insurance Policies Surrender
Values Now Subject to a Tax That
would In Some Cases Equal An
nual Premium-Tax Amendment
Will Make just Law Possible.

| "ouAu In some Cases Equal An.
nual Premium-Tax Amendment
Will Make just Law Possible.
1ne reason that the present revenue
laws OF Illinois have not been enforced
is not because the assessing bodie.
nave deliberately Disseminated nv
omltuns intangible values. The fact
Is That such values cannot be discoy-
cred by the assessor without resorting
10 methods which never have been an
plled, and probably never will be re-
sorted to, by any modern government
In the first place, intangible taxable
values cannot be discovered by the Or
binary processes which assessors are
permitted to employ-that is to say,
by seeing them and determining their
value. In the second place, it is fully
recognized that if the taxation of in.
tangible values, as now provided for
oy law-the law being made necessary
by the constitutions business manic
would be invited. All savings deposits
and there are about half a billion
dollars of them-would have to be
taxed at rate that would be euuiya-
lent to one-half of their income. No
where-and hardly under the war
taxes of EurOpe-is the half of an in
come taken by the tax-gatherer. Com
mercial deposits accounts
which pay no income at all-win have
to pay in taxes from one to two per
cent year. The effect of such taxes
would be to induce both classes of de-
positors 20 withdraw their money
from the banks. Suppose that. saw
tomorrow, it became absolutely certain
that these taxes on deposits were to be
collected, there would be an Immediate
withdrawal of cash from the banks,
runs, panics and possibly liquidation
of good banks.
Debtors Accommodations Taxed.
The revenue law-as the constitu-
ton compels it to be-calls for the col
lection of the full-rate tax upon all
credits which all merchants, great or
small, extend as a matter of accommo-
dation to their customers. If the law
were complied with as to taxing these
credits the merchant would be more
reluctant to extend credit because,
when the assessor would come around
he would proceed to assess all of the
credits which might be owing to the
merchant; and, the tax collector would
demand from one to two per cent on
all of the credits on the merchants
books. And, where the merchant ex-
tended credit to a customer he would
have to charge into his price for the
goods the tax rate which he would
have to pay on the credit extended
Taxation on credits is double taxation
because the goods sold have already
been taxed in the hands of the owner.
and, when they are sold on credit, the
credit account also is taxed. Appar-
emily a rigid enforcement of taxation
of credits would bring a cessation of
credit, which would, in many cases.
create more or less hardship. and en-
courage creditors in a more rigid en-
fOrcement of their collection demands
against their debtors.
Suppose that the law were enforced
fully and cOmplctely-as to taxation
on securities of all kinds The average
rate of return on securities is about
were made to pay only one per cent
on their par value it would be Cquiva-
lent to taking one-fifth of the entire
income produced by them. WhCr-
ever income tax laws are in operation
the income tax rate is very much less
than onC-ffth of the income
Life Insurance Is Taxable.
1t is worth while also to consider that
a rigid enforcement of the present law
would require the taxation of all life
insurance policies that have u sur
render value" The tax rate would
be equivalent to a charge upon the
insured of from one to two per cent
on the value of his policy and in
many cases would exceed the present
premium which he has to pay. The
eeffct of such an enforcement would
induce many persons who are now
wisely and well insured to surrender
their policies. This of itself would
create considerable financial disturb
ance and would operate as 4 deter
rent of thrift.
In general the enforcement of the
revenue law as 1t stands would pro-
luce financial and economic disturb
ances of great magnitude. The Tax
TO be voted on November
7, will enable the legislature to enact
avs providing for reasonable rates
Tor the taxation of all forms OF in
tangible values and for the exemp-
ion of values which in wisdom should
lot be taxed at all.