SOME ECONOMIC IDIOCY.
A CORRESPONDENT calls my attention to the recommendation
of a commission appointed by the governor of Massachusetts,
to the effect that "all taxes on intangible
property be abolished." He adds that, "as much of the
wealth of Massachusetts is in stocks, bonds and mortgages
this would relieve the rich at the expense of the poor."
I could recommend that my correspondent be placed in a
well-padded cell in a lunatic asylum and fed on Ladies Home
Journal literature. The idea that what he calls "intangible
property" should be taxed is quite prevalent among
the ignorant and a perfect hobby with the half-educated.
No writer distinguished for economic erudition recommends
laying a tax on notes, stocks, bonds and other such
evidence of wealth. Such a tax should never be laid by a
government guaranteeing equal right. It is class legislation
—it is double taxation. This statement may not be
at all palatable to the West and South, but the proposition
is impregnable. It taxes both the lender and the
borrower on the same property and the latter has to pay
for both. It must be remembered that such securities are
not wealth per se, any more than a cook-book is a square
meal—they are merely evidences of ownership. Let us say
that I hold $10,000 worth of stock in the Illinois Central
railroad: The road is my property to the extent of my
stock—I am a small partner in the enterprise. It pays
taxes to the State of Illinois and to every county and
municipality through which it passes. Having paid taxes upon
my property in Illinois, where it is located, must I pay
taxes upon it again in Texas, where it has no existence?
If I must pay taxes upon my railway property, then pay
it again upon the certificate that I own it and am entitled
to its usufruct, why not compel me to pay taxes on my
business block, then pay it again on the deed thereto in
my possession. My certificate of railway ownership and
my certificate of realty ownership are on an exact parity
from an economic standpoint. Each is evidence that I
possess tangible property upon which I am paying taxes, and
I emphatically object to a double dose. Exactly the same
principle applies to promissory notes and bonds. A bond
is nothing more nor less than a note. Suppose that I hold
Illinois Central bonds to the extent of $10,000 instead of
stock: The corporation has borrowed the money of me and
invested it. It is paying taxes as well as interest on my
property in consideration of use. As the corporation is
using the property it must earn all the taxes, by whosoever
directly paid, for I can earn nothing with property
not in my possession. If I am taxed on my bonds, I must
"put it in the bill," just as the merchant puts rent,
interest and insurance. If Massachusetts owns ten million
dollars of Texas securities she has simply transferred that
much tangible wealth to this state for us to tax. If the
paper evidence that this property is located here be taxed
in Massachusetts, Texas must pay the piper. Let it
never be forgotten that a tax is but a toll and can only
be taken of something tangible. You cannot get blood out
of a ghost or wealth out of a paper evidence of property.
The blood must come from real veins and the tax must
be drawn from something tangible. It is a contravention
of justice and a violation of economic law to tax this
man's property once and that man's twice. That the one
is rich and the other poor does not mitigate the infamy—
it is a fundamental principle of this republic that all
men shall be equal before the law. Some years ago a howl
was raised that reached high heaven that Jay Gould was
worth 50 millions and paid taxes on but 75 thousand.
Economic idiots gnawed a file because the ex-house-trap
maker objected to paying his taxes twice, and charging his
patrons on both the amount and the cost of collection.
There are many abnormal fortunes in this country, but
confiscation through taxation is not the proper remedy.
If the government toll be an ounce in the pound let it
be
an ounce in the pound, whether the citizen possess ten
pounds or ten million. Let every citizen contribute to the
support of government in exact proportion to his means.
To exempt the man who makes $500 a year and place the
entire burden upon the man who earns $1,000 a year and
upwards is to make of the first a political pauper. The
graduated income tax, so-called is wrong to one class of
citizens and an insult to the other. Let us tax all property
once and only once; but let us see to it that unctuous
old hypocrites like Rockefeller are not permitted to rob the
public—that they do not build collegiate monuments to
their own memory with other people's money.
