The Edwin Burgess 

Letters on Taxation



LETTER IV.
     In the Constitution of Wisconsin, sec. 8, art. 1, it says, "The Rule of Taxation shall be Uniform" upon such property as the Legislature shall prescribe. Now I am totally at a loss to see the "Uniformity" of Taxation under our present law. If it is meant to exempt a certain value of everyone's property, why exempt horses under two years old, mules and asses under eighteen months old, and sheep and hogs under six months old? for according to this rule, one farmer may own a thousand dollars of such property, or any amount, but if his neighbour has a like amount, no matter how little older, he must pay double what he would have to pay were all taxed according to the value of their property. This, instead of being uniform, is burdensome and oppressive to one, while favouring the exemption of the other. Do not suppose for a moment that I wish to make any point against farmers, or any other class whatever, for I would not tax any personal property, or product of industry in any form, but the land alone according to its market value, irrespective of all improvements. But it would really be difficult to show how the mechanic is correspondingly favoured in exemptions; for he may have six months' fuel and provisions, if he should be fortunate enough to own as much, but if he should be owed as much, though it were his all, and he could not collect it before making his returns, then he must return it to be taxed, except he owes as much, because those who owed him were either unable or unwilling to pay him; neither case he must pay more taxes, and thus exempt others, or perjure himself to avoid the imposition.
     According to art. 9, sec. 3, of the assessment law of Wisconsin, household and kitchen furniture, beds and bedding, or other personal property not exceeding two hundred dollars in value, is exempt from taxes. Now a widower being the head of a family, of course would have two hundred dollars of such property exempt; and a widow being the head of a family would be entitled to a like exemption; and I suppose a bachelor or maiden would be entitled to a like exemption each. But if they should commit matrimony, would they be entitled to a like exemption, or only two hundred dollars for each family; and if not, where is the uniformity of the tax? The same question will apply to the six months' provisions and fuel exempted by art. 10, sec. 3.
     In art. 14, sec. 3, it says each person shall be entitled to exemption on other personal property, excepting moneys and credits, and articles enumerated in sec. 8, to any amount not exceeding one hundred dollars; so that a person may have exempt from taxes a hundred dollar watch chain, but not a five dollar watch, or a melodeon, or a piano. Had our legislature no taste for music or mechanics? You may select for exemption a double horse wagon for work, but not a single one for pleasure. Is there one mechanic in a hundred who owns one hundred dollars beyond the furniture and other property that he could collect, to put into such property as is exempted? And if he cannot collect, then his credits must be taxed to diminish the taxes of those who are rich enough to own the exempted property. But why the articles enumerated should be exempt, and others taxed, I think it would puzzle a Wisconsin legislator to tell; or how taxation can be uniform with special exemption.
     Again, how credit can be construed to mean property, except by the fist of the law, I am at a loss to determine. What is credit but expectation of property, which is in the possession of another (if existing at all), and is already taxed in the possession of the buyer? But when you tax credits it leads to double taxation, first for the property bought, and second for the credit or expectation also.
     For example, suppose one person buys a house and lot of another, for one thousand dollars cash, then the cash is taxed to the seller, and the property to the buyer; but if the buyer buys the house and lot on credit, and loans his money for interest, then the house and lot is taxed to the buyer and the money to the borrower, and the credit to the seller of the property and the loaner of the money; and the same property may be sold over and over again on credit; and the same money be loaned, over and over again, and remain unpaid; and the credit be taxed for each sale or loan every time. But it will be said that our somewhat recent law for exempting an amount of personal property from tax equal to the debts of the debtor, avoids the double taxation. In many cases this is true, but not in all, for if you owe for real estate and have no personal property to be exempt for what you owe, then the real estate will be taxed, and the credits also; and even if you owe for provisions, which you have consumed, and have nothing with which to pay, still the credit will be taxed, though no property exists to represent it; and if the house should be burnt, and the land washed away, still the credits will be taxed while the wealth is unmade which must cancel the credit.
     And I contend that exempting an amount of property from taxes equal to what we owe is worse than taxing all property to those in possession, for then it would be the interest of the debtor to pay up, to save the taxes; which would benefit the creditor pecuniarly, and the debtor, morally, at least; and it also avoids the double taxation, and taxing for what has ceased to exist as property, and makes it our interest to trade for ready pay instead of credit, and gives no premium on perjury, debt, and swindling, and is less costly, extra-judicial, and inquisitorial; still, it is very inferior to ad valorem land tax, which, while avoiding all evils peculiar to taxing personal property and credits, makes land monopoly unprofitable, and keeps the land at the lowest price, and labour at the highest, while taxing personal property and credits both make land high and labour low.
     Doubtless, this law for taxing money and credits was made to tax the loaner, and exempt the borrower; but while it does not put it within the means of the borrowers to get cheap or free land, it not only fails of its object, but absolutely increases the evil which it was intended to diminish; for the tax for credit as well as money diminishes the land tax and thus raises the price of land and produce, rent, interest and usury; and so will our poll tax, our taxes on personal property, and duties on imports. Thus are we fighting effects, and feeding causes continually, but I trust we shall soon try to see if we cannot better prevent the evils of which we so justly complain by removing their causes entirely.
To: Burgess Letters

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Summary of pages in English: Land and taxation
 
March 2009