Milford chronicle., 1924-12-19

Second: Personal Property Tax
Delaware has no such tax at pres
ent and few States have. While i
seems fair that personal property
by which we mean mortgages, bond
and stocks of corporations, raw ant
manufactured materials, and 81
forth, should be taxed, it is yer!
hicult to levy a personal propert!
tax and to collect it. Such propert!
cannot be assessed by inspection, a
is real estate.
However, we may cons'd der thu
income tax as a tax on persona
property; for. If mortgage bonds
stocks and materials have value it ::
because they produce income for The
owner. Therefore, If the income is
taxed the result is the same as il
property itself were taxed. We WI
consider the personal property taz
with the income tax below.
Third: Income Tax-If we pro-
pose to tax personal property and to
use the income tax for that purpose
it is far to fix the income tax at a
rate that viii cause equal values in
personal property and in real estate
tn be taxed the same amount in
dollars. Thus, if our real estate tax
were "a cents on the 500 of assess
ed value. we should make the in
come tax rate per cent. Then the
tax paid on 500 of real estate
v-~u'd be "a cents ana the tax paid
c0 500 of personal proper+y yield
ing an inL0me of 6 per cent, or $6.
would h per cent. of Sc or "a
cents also. The 500 investment in
personal property would then pay
the same tax as the 500 investment
in real estate.
Waees, sa aries and professional
earnings are different from interest
on mortgages. bonds and dividends
on stocks or corporations. The lat
ter furnish security for the con-
t'nued payment of income from year
TO year. but there is no such secur-
ity for the continuation of ages.
and profess onal earnings.
However. we may look upon the in
dividual himself as the security for
his income dur'n~ he working years
o. his life. Adjoining this viewpoint.
We should permit the individual to
set as de an untaxed portion of his
earnings to provide a fund for his
Old age. lust as manufa cturers are
nermitted by the U. S. Government
10 reduce their taxable earnings bv
an amount necessary to restore their
buildings and machinery at the end
d the period of usefulness This
rntaxed portion should be apprOX-
mately 30 per cent of the waoe or
'alary. For If a man earning $4,000
Ger annum could set aside approxi-
nately 80 per cent of that amount
'S93) at 4 per cent. at the end Of
30 years the accumulated fund
would be $50 600 which at 6 per
,ent. would give him permanent in
'ome equal to his salary. or 81 600.
f we add to this 1898 the prem UNI
1887. for life insurance to protect
,ne-half of the mans expected es-
p we have a total of 1890. or |
3 per cent. of SO 900. Following |
his theory. 43 per cent. of wages.
alaries, or professional earnings
hould be EXEMPT from tax. or for |
Iractical purposes the tax rate
hould be 50 per cent. of that levied
n incomes from mortgages, bonds,
tocks. and so forth.
Gain obtained from sale of real
state. securities and other forms
+ capital as well as gains such as
,t.zu44.-oo re- ire,,ranoa aOd ca |
crth, should ba considered sepa-
ately and should be offset by cor
losses: that is. taxes on
hese gains should be on the net
mount only. Losses correspondents
, these gains should not be per-
lifted to offset income from wages
alaries. business, or interest and
ividends.
Income from rentals or income
rom real estate should be taxed
My in so far as the income is in
xcess of the school real estate tax
f 25 cents on the 500 of assessed
aluation, otherwise It would be
ouble taxation.
IA What is the general effect of
!
ne different classes of taxpayers?
The effect is to impose higher
lxes upon real estate than upon
ersonal property such as mort ,
ages, bonds and stocks, and to tax
lie latter, through their incomes, at
0 higher rate than that imposed :
pom wages and salaries. More
YER, losses on sale of securi-
es are permitted to offset = :
come from all sources,
,ncession that naturally reduces
lie income tax. TIE tax system and :
5 rates are favorable to the holder
mortgages, bonds and stoc'-s, ,
favorable to the holder of real :
tate and the wagF Garner. :
A more serious ec'ect cusing loss
revenue and great Injustice is the -
provision of the income
X law. Though this law aims to
X the incomes of 20 per cent. of '.
e population only IS the exemp-
IN provisions make it unneces- -
ry for 80 per cent. of the people n
pay any tax whatever unless the - -
ing fee be classed as an income -
X. =,
Is Can figures be set down to g
ow the effect of our present :,
ethod of taxation for school l.
rposes? =,
In order to show the effect of n,
r present rates of taxation and to n,
ike suggestions for revision, vt q,
now consider how much real es- ~
e or personal property or salary
gain on sale of capital (four n,