Evening star., 1922-05-18

AAc 1ACI tuAt III Iu0 Ol6tIlCt- loAcU
are not self-imposed as elsewhere in
the United States makes 1t the more
essential that in equity taxing
body In which the taxed are not
represented should. to q certainty.
avoid double taxation and any other
tax exaction that Is obviously excess
sive and unjust.
impose a more drastic tax on intan-
gibles In the District than neighbor-
Ing Maryland imposes upon itself. No
state with a low rate intangible per-
sonaity 9S, tax taxes al forms d.d Of intan- N.
Washington. Maryland, for instance,
does not tax mortgages; 1t does not
tax bank deposits of non-residents or
OF residents unless they bear inter-
est; 1t does not tax book accounts or
Since the District has been taken
from the class of states which do
not tax intangibles, ie.. Delaware,
Washington state and Idaho. and put
into the class Of states Gike Mary
forms of intangibles, then at least
every equity and every safeguard
against double taxation which applies
In Maryland or in any other OF these
states should with scrupulous care
be applied in similar taxation of the
District.
The District intangibles tax seems
to cover all credits. No state which
has a classified tax on intangibles
applies 1t to all intangibles. Mary
land Qs1D. as we have seen, exempts
mortgages, bank deposits and book
accounts, and derives the bulk Of
this revenue from bonds and certifi-
Gates of indebtedness of certain cor
porations and from the interest-bear-
ing or dividend-paying stock Of
foreign corporations. locally owned.
Minnesota U917) exempts shares of
stock, money and credits belonging
to incorporated banks, certain mort
cages and municipal bonds. and I'M
Pennsylvania (191D. exempts bonds,
except those of Pennsylvania corpor-
ations owned by residents OF Penn
sylvania. Seventy per cent OF Penn
sylvania revenue from this tax 10 de-
personal property held in trust by
trust companies.
Thus Maryland derives its revenue
from stocks and bonds; Minnesota ex-
empts stocks. and Pennsylvania de-
rives so per cent OF its intangibles
are not taxed in Maryland.
There are obvious reasons Of policy
for assimilating the Districts In
tangibles tax system to that OF ada
cent Maryland. The very rich mans
intangibles have wings. and II taxed
more heavily in Washington than in
Maryland will fly to Baltimore. If
bank deposits. or just over the border
II other credits.
The states Of the Union in trying to
work out an enforcible. just and an
effective or revenue-producing tax on
certain intangibles have given the
subject the thoughtful. anxious con-
sideration Of some of the best brains
of America At a series Of confer
ences. national since 1907 and state
for much longer period. the ex-
TENS. new and old, have been ex-
changed. The District of Columbia's
tax revenues far exceed in amount
those Of many Of the states. The
District of Columbia has not been
to participate in any conference con-
corning its intangibles tax. This tax
is now to be radically altered hastily
and without any thoughtful and scien-
tific preliminary consideration by
Washinston's hope is that ConEres.
will give to the whole question of
the wisest and fairest law concern
ing personality taxation that thought
which has been bestowed in a not-
able series of tax conferences, ma,
tional nnd state. elsewhere in the
United States, and which should Pre-.
cede any Anal enactment ON 10 vftally
important a subject.
The tax on intangibles in its pres
ent shape imposes or threatens double
taxation on the same property. 1t
taxes credits without deducting debts.
For example, 1t taxes mortgage
mortgaged property without deduct
ing the mortgage Indebtedness.
The mortgagor pays full taxes on
the mortgaged property: on what he
money. and. in the shape Of increased
interest on the mortgaged note, his
own promise to pay;
The borrower. the impecunious
property, typifies the small taxpayer,
who already pays. 1t Is felt. more than
his share Of taxes. He asks for re.
lief and his burden is made heavier.
Bank deposits are loans to the
banks. The banks already pay a tax
on gross earnings In lieu Of personal
taxes Deposits ought not to be
doubly taxed. directly or indirectly.
as personally both of the banks and
the depositors.
If several individuals, as partners,
own and operate a business property
they pay taxes only on the partner
ship property. If these same individu-
ais change tho form of their owner
ship from q partnership to q cor
poration, they should still be taxed on
the Same property and in the same
proportions. If in addition to this full
tax on the partnership corporate
property there is another tax on the
indications Of amount of individual
ownership in the shape Of stock GER
tificates double taxation results, No
additional taxable values are created
BY the substitution of stock certif-
Gates for q partnership agreement as