Spirit of Jefferson. [volume] (Charles Town, Va. [W. Va.]) 1844-1948, 1926-06-02
PROPOSED AMENDMENT tn
THE CONSTITUTION
Respecting Classification Of Prop
erty for Taxation.
BY C. w. Dillon,
First Tax Commissioners OF West Va.

Constitution OF west virginia, IL -
provided:
Taxation shall be equal and uni
form throughout the state and all
property, both real and personal. shall
be taxed In proportion to its value TO
be ascetained as directed by law.
No one species of property from which
a tax may be collected shall be taxed
higher than any other species OF prop
erty of equal value. ."
1t is proposed by the amendment
which has been submitted to the
voters by the last Legislature TO
change the constitutional provision so
that money, notes, accounts receiv-
able. and bonds shall be taxed at a
rate not to exceed so cents on each
500 OF the true and actual value
thereof
In the last twenty years this amend
ment has been before the Legislature
several times, but for some reason
the amendment was never submitted
to the people until the Legislature Of
1926, although the necessity for the
change IN the constitution has been
apparent to all who have ever studied
the question of taxation since the
state was organized, but especially
has the necessity for the change been
growing with the development of the
state, increase in population, and the
large Increase In the holdings OF in
tangible personal property.
II has been the experience of every
State Tax Commissioner from the time
tha4 oc+Yaa,,t xxfaC nroanfvaf IN tOA
present that despite the effort OF the
assessing officers TO reach intangible
personal property and place the same
on the books for taxation, the effort
has been largely futile; It being esti-
mated that not more than ten per
cent Of such property taking the state
as whole has been returned for
taxation. Such property will not be
returned for assessment as the law
now stands requiring ii to bear the
same rate as other property bears,
but It can and will be returned for
taxation, in my opinion, II the Con-
stitutional Amendment is adopted
permitting such property TO bear taxa
ton at the rate of 90 cents on each
500 valuation thereof While this
NAV seem to be a discrimination, yet
It has been the experience In the
states >where the classification has
been provided for that intangible
property when given low rate the
Increase in assessed value Is so
enormous as to return In many In
stances ten fold in taxes, over the
amount formerly yielded under the
so-called equal and uniform method
of taxation.
There are many reasons why the
amendment should be adopted.
/ FIRST. Such change will bring
upon the assessment books a ten-fold
Increase In the amount of such In
tangible property and the state VIII
therefore at the low rate be the gamer
many times over.
SECOND. The present law has the
tendency TO drive out OF the state
much intangible property which seeks
Investment in 1ther states because OF
the higher rate of taxation here.
! THIRD. The law as it is now, has
the effect Of causing large invest
ments in non-taxable securities or In.
i vestments In other states in Industrial
I and other stocks which relieves the
investor of taxation. The states on
three sides of West Virginia Ken
lucky. Virginia, Maryland and Penn
sylvania-have property classif1ca
tion provision with low rate OF
/ taxes on intangible property and the
effect has been to multiply many times
over the return of such property fol
assessment. giving such states
greater yield in taxes from sucf
property and large Investments from
other states because Of the favorable
taxation.
/ FOURTH. The effect will be to In
crease deposits in local banks having
/ the tendency 10 lower the rate o.
interest because Of the more money
available, discourage the investment
In non-taxable securities, and invest
ments In outside states, largely In
creasing available assets for home In
| vestment. The rate OF taxation nov
runs from $3.50 to $500 per 500 ans
when a municipal tax is added, tn
tax rate is In excess of the interes
/ maid by the average bank on saving
deposits: hence little money is place.
in savings deposits In this state be
cause the deposition would not breal
even on the return.
FIFTH. The experience where tn
classification of property has bee
tested out has been a marked improve
ment. some Of which states are a
follows:
Connecticut, District of Columbia
Iowa. Kentucky, Maryland, Minnesots
| Montana. Nebraska, Oklahoma. Penn
| sylvania. Rhode Island, South Dakota
Kansas. California and Virginia.
II will he observed that by tn
amendment to the constitution 1t wi
not be left for every Legislature I
attempt to increase or decrease tn
rate of taxation upon intangible PROF
! erty. but the rate is fixed by III
amendment so II viii continue tn
same. The rate fixed Is quite res
sonable. thus leaving the margin {
$3.50 upon an investment yielding II
terest at the legal rate OF six per cen
| MANY people of West Virginia woul
like TO make investments in lndustr's
bonds, which bonds would yield a
income of six per cent, but having I
pay from two and one-half to thre
I nc&r ant