Evening star., 1917-01-06
Postpone or Amend Intangibles Tax.

Postpone or Amend Intangibles Tax.
When the new intangibles tax law was
hastily enacted last September as rider
on the District appropriations bill. it
was indicated in the Senate debate and
In effect promised in the law itself that
equitable amendments of this tax would
through joint committee be proposed
and enacted at this session.
Equitable readjustments in the Dis
trict's tax system, made neeessary by the
imposition of the intangibles tax, and
wise changes in the new law itself must
he made this winter in order that they
may he operative when the intangibles
tax goes into effect next July.
clearly these necessary changes can
not be accomplished this session after
suitable hearings and report by the joint
committee. If these equitable amend
ments are made this winter they must
be enacted as riders on the District ap-
propriations bill on the Senate's initia-
tive, just as the original intangibles tax
was enacted last September
Either the new tax law shouId he
eauitably amended by Senate action on
the District appropriations bill or the
date when it shall 60 into effect should
be postponed.
The Districts appeal, Immediately to
the Senate, and later to the House, is to
make such changes and readjustments in
the local tax system and in the intan-
gibles tax, as an integral part of that
system, as viii (D reduce to minimum
the inequitable features of that law, in
eluding double taxation of the same
property; and (2) will effect stimuli
taneous reduction to the full amount of
the proceeds of the new tax in the pres
ent excessive taxes on realty, on licensed
occupations and on the gross earnings
OF certain corporations.
The broad principle upon which
Washington rests its petition in equity
is that if tax on intangibles is def
nitely and finally enacted for the Dis
trict it should be so framed as to be a
readjustment of the local tax burden
and not an increase of it.
What specific amendments should be
proposed to the intangibles tax Laws
l. The scope of taxable intangibles
should be much restricted. Our law un-
amended taxes all credits without any
deduction for debts, and all loans and
investments except the stock Of District
corporations, already taxed. No state
in the Districts new classification Of
states that impose classified low rate
tax on credits taxes all intangibles
Maryland taxes only certain stocks and
bonds. 1t does not tax mortgages or or
binary bank deposits. Pennsylvania, on
the other hand, gets half its revenue
from mortgages and 20 per cent from
trust estates whose intangibles cannot
be concealed. Minnesota makes impor-
tant exemptions from its list of taxable
intangibles.
:. In selecting the intangibles to be
taxed those should be chosen in respect
70 which the tax can be collected at the
source, or which are in the hands of the
courts and cannot be concealed, or
which are credits of record like mort
cages with rigorous provision of law
for ascertaining their ownership. Only
IN respect to such classes of intangibles
has even the low-rate tax successfully
operated. Other intangibles should be
exempted. Self assessment under q
listing system of the intangibles of the
Individual has failed everywhere.
3. The rate of taxation should be not
more than three mills, if credits are TO
be taxed without deduction of debts, if
every taxpayer is to be taxed On what
IS owing to him, and not to be relieved
Of taxation on what he owes. This is
undeniabiy double taxation, and the rate
of such taxation should be nominal
Minnesota's rate is three mills, rate
equivalent 70 s per cent income tax
on security paying 5 per cent interest.
In Wisconsin and Massachusetts, which
substitute a tax on the income from
intangibles for tax on their value, 6
per cent is the maximum rate collected
IL Maryland's rate is imposed upon
the District this rate should be applied
in the District only to the intangibles
which Maryland taxes, namely, certain
stocks and bonds, omitting mortgages
and ordinary bank deposits.
The argument for these changes in the
intangibles tax is elaborated in editorial
correspondence printed elsewhere in The
Star today and for the two days preced-
ing.