The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1933-03-18
NEWSPAPERS OPINIONS
THE PROPOSED TAX ON FOREIGN STOCKS

THE PROPOSED TAX ON FOREIGN STOCKS
Passage by the house of the Everett amendment
to the tax machinery bill causes the greatest
Germ in Asheville and in Western North Carolina.
II will cause concern throughout the state if and
when its probable results understood.
The Everett amendment, sponsored by Represen-
tative R. o. Everett of Durham, repeats the exemp-
ton from ad valorem taxation which foreign stocks
have enjoyed in this state since 1928 1t provides
that such stocks shall be listed by their owners for
ad valorem taxes the county authorities to collect
the tax on the stocks and turn it over to the states
general fund.- the money to be used for the support
of the six months school term.
| Thus the state would abruptly reverse itself on
two major policies to which it has been definitely
committed-the policy that there should be no ad
vaorem taxation for state purposes and the policy
that direct tax foreign stocks is in fact double
taxation since taxes have already been paid the
physical properties represented by the stocks in
the states in which they Incorporated.
Asheve would be one of the severest sufferers
from this program; for the incomes of many of
those who have sought this community and other
communities in North Carolina as residents
drawn in large part, in some instances entirely,
from the ownership of the stocks of corporations
operating in other states.
But Asheville would not be the only sufferer. 1t
is probable that much of the trust funds of various
North Carolina institutions is invested in foreign
stocks The yield from these stocks is now low in
numerous instances and will not support the taxa
ton that is proposed. The market value of these
stocks is presently low in almost all instances and
they cannot be disposed of except at heavy sac
rifce
The theory upon which this proposed taxation of
foreign stocks is being urged is, of course, de-
lusion That theory is that approximately $780,
O0O 900 worth of such stocks are owned in North
Carolina that this amount of money is escaping
taxation, and that the tax problem can be solved
by imposing a tax upon these stocks.
In the first place, the stocks are not escaping
taxation They represent investments which are
taxed in the states in which they are domiced;
and here in North Carolina the income received
from them by those who own them is taxed a
straight six per cent with TO exemptions. This last
is in itself rather drastic thing. Last year the
state collected 1852, 900 from this source.
In the next place, every proposed tax must be
considered in the light of its probable results.
North Carolina collected only small revenue from
foreign stocks when these stocks were taxed. The
total yield in 1922 the year prior to their exemp-
ton from taxation was only 1854, 900. The yield
will not be great now if tax is put upon them.
Capital in this form can take flight and does take
flight.
The state will be injured by the alarm which
such legislation will cause to many who are living
here now 1t will be injured by the effects of such
legislation upon others who might be attracted here
as home owners. Real property will not be helped
by this kind of tax. 1t will be hurt, for its market
win be further restricted.
1t seems to be the idea of the proponents of
tax on foreign stocks that there are about fifteen
counties in which the ownership Of such stocks IS
concentrated and that the other eighty-fve coun-
ties can take the owners of foreign stocks in the
fifteen counties by the Threats and shake four or
five million dollars out of them What will be ac-
tually accomplished is to advertise North Carolina
far and wide, among persons who would be most
valuable addition to our population, good state
to avoid.
The only states which are getting from foreign
stocks more substantial revenue than North Caro-
lima is securing are the states which have faced the
realities inteligently and have classified various
forms of property for taxation on a basis which
experience has established to be practicable. The
present approach of the general assembly to this
problem is simply estructive-dangerously de-
structive in times like these.-Ashevile Citizen.