Evening star., 1922-04-28

proposal by the cOnIereeS on tHe
! District appropriation bill Of a five
!. year increase in the tax on intangible
personal property from mills to 5 mills
an increase Of two-thirds-brings
again forward the question of the in
tangible tax here and elsewhere. The
imposition Of this tax as a revenue
producer is always accompanied by
difficulties and danger. 1t has been
the cause Of much discussion and ex-
perimentation in all the states where
it has been undertaken. For the ma
ture of the property SO taxed Is such
that much depends upon the Wiling
ness of the property owner to de-
clare his holdings, and the tax Is
thus virtually conscience TAX, eva
sion of which is possible through
perjury and conceaiment. 1t mas
been found that too high rate OF
taxation or too broad a scope or TAX
objects causes both perjury and con-
cealment, resulting in a loss OF reVe-
nue..
The taxation of credits and other
intangibles is attempted in the states
in several different ways:
U) The full property tax rate is
applied to credits and other intangi-
bles. as If they were property. The
results are: Absolute failure of the
tax as revenue producer; complete
success as perjury producer, through
the compulsory listing system, undef
which the taxpayer virtually nxes ms
own tax; contemptuouS disregard TOT
the law by the bulk of the taxpayers
nd nf Uniform 6nIOTCe-
ment: gross injustice to the con-
scientious few who try to obey the
law; double taxation Of the same
property This discredited system
still prevails nominally and with
many variations in most of the states.
(See recent discussion of the break
down of this tax in the report of the
New York state tax committee. 1916.
| pages 81 ct seq. and Al ct seq
(2) Certain states. recognizing the
element of double taxation involved
| In the taxation of most intangibles.
reduce to a very low figure the rate
of taxation levied upon intangibles 8
and apply this low rate only to few
| Of the different classes of intangibles,
no two states selecting the same in
tangibles for this taxation.
* X + X
Since intangibIes are still treated
! and taxed as property. the reduction
of the rate does not eliminate the
evil of double taxation Of the same
property. but reduces 1t to mini
| mum. To the extent that the tax
payer continues under legal compul-
sion to make return of his intangi-
bles under oath. to that extent the
evil of the listing, self-taxing sys-
tenn as a perjury promoter continues
70 hn
the few intangibles selected for tax
alton in any state can be taxed at
the source, or in connection with
| the making of some official record
concerning them which prevents con-
| cealment. this evil is eliminated or
reduced to a minimum. Since there
are many who will endure this dou-
BILE taxation of credits. If the tax is
very light, the low-rate tax Is more
successful as revenue producer, IN
! the equitable distribution of the tax
burden and in diminishing fragrant
tax lodging.
The following states impose a low
| fiat rate upon intangibles, with nu-
| merous and varying exemptions:
| Maryland, Pennsylvania. Minnesota,
Rhode Island. IoWa and North Da-
kota. (See Tax Conference, pages
175 and SIG; Kentucky. page 1S6;
also see report National Tax Asso-
citation Conference, 1919. page 1S3 for
Maryland, page ISL for Minnesota. the
District Of Columbia is in this class.
Page 152 for ConnecticutD
The following states, under a
registration plan, impose a low spe-
cific tax upon the face value of GER
tain debts, exemptinE them from
other taxation: Connecticut and New
York. The following states impose
a low-rate income tax on certain in
tangibles in lieu of tax on the
value of the intangibles: Wisconsin
and Massachusetts,.
go Some of the states recognize so
completely the double taxation In
yolved in tax on intangibles, and
the perjury-promoting evil of COM
pulsory listing system. attempting to
bring to light invisible property by
confession Of the taxpayer, and the
absolute failure of this tax as a reve-
nue. producer. that they have entirely
eliminated the. general tax on the
intangibles of the individual and in
lieu thereof have in certain instances
Gas in the District of Columbia) i'm
posed specific taxes upon certain cor
porations, or to Offset the lighter
personally tax have raised to the
limit the tax on realty. These states
are Delaware, Idaho and Washington.