Evening star., 1917-01-16
Intangibles Taxation Hints.

Intangibles Taxation Hints.
Elsewhere in The Star today is printed
q summary of the low rate taxes ON in
tangibles imposed in Pennsylvania, Min
nesota and Connecticut. Like Maryland
these states give hints of value to our
legislators in framing a wise and just
intangibles tax for the District; or
(more accurately in framing local
tax on intangibles in which unwisdom
and injustice shall be reduced to a mini
mum.
The lessons from all these summaries
are C) that no state taxes all intan-
gibles and that each state derives its
revenue uhucr this head from few in
tangibles. and (2) that those intangibles
should be selected for taxation which
can he taxed at the source or caught on
the records, and that only such intangi-
bles can be uniformly and successfully
taxed
Pennsylvania, for example, collects
half its revenue under this head from
mortgages on real estate, which in Mary
land are not taxed by the state at all
Maryland collects all of its revenue un-
der this head from certain stocks and
bonds. Conneetieut's low rate tax ap-
plies only to bonds. notes or other
chooses in action and is, in effect. a reg
istry tax. Minnesota does not tax under
this head shares of stock, money and
credits of incorporated banks, municipal
bonds and mortgages subject to the reg
istry tax.
The rate of Pennsylvania and Con-
necticut is 4 mills, and of Minnesota
with no deduction of debts as an offset
TO taxed. credits) is 3 mills. No debt
deduction is proposed for the District.
Why should the District pay more than
mills on wider range of intangibles
than those taxed in Minnesota
The stock of all District corporations
should be exempted specifically from this
tax. All of such stock as has taxable
value has long been taxed at the source
against the corporations. Such stock as
the law declares to have no taxable
value, being the mere indicia of indi-
vidual ownership in companies (which
by reason Of or in addition to incor-
poration receive no special franchise or
privilege" is exempted by existing law
from taxation at the source against the
corporation, and for precisely the same
reasons should go untaxed under the
new intangibles law in the hands of the
' individual
The law justly declares that the stock
of business companies which receive no
special franchise or privilege from or in
addition to incorporation is no more tax
able than partnership agreement, both
being, not property, but merely paper
evidences of proportionate individual
ownership in property; and that the
taxables of such business establish
ment, whether owned by an individual,
or by partners, or by individuals incor-
porated, consist solely of the real and
personal property Of the business; and,
however owned, only this property is to
be taxed.
District stock which for sound reasons
is not taxable under taxation at the
source should not, of course, be made
taxable in the hands of the individal.
To tax owners both upon their property
and upon their paper evidence of own
ership of the property is obviously dou-
bie taxation.
Congress should select as intangibles
TO be taxed in the District either Mary
lands list of certain stocks and bonds or
Pennsylvania's list, under which half the
tax is collected from mortgages. Why
should both be imposed upon the Dis
trict and enforced?
If the Districts list of taxable intan.
gibles when finally determined approx
mates more closely Minnesota's list than
that of any other state, no more than
Minnesota's mills rate can equitably
be collected from the District.
Congress will legislate most wisely
and justly if it selects for taxation in the
District few intangibles which expert
ence shows are hardest to conceal and
which can be taxed at the source, and if
1t eIempts from taxation all other in
tangibles, eliminating as far as possible
seH-assessment under the listing system.
From such enactment there would result
minimum of perjury and a maximum
OF revenue and of equitable distribution
Of the community's tar burden