For incidentals that will be raised by making the rate 18.2 mills, if all the tax is collected: First, find the total that will be raised In the last section we dealt with direct taxes. This section deals with taxes placed upon goods and collected before they are sold to the consumer. They are of two kinds, customs or duties, and excises or internal revenue. Excises or internal revenue are taxes levied on certain domestic goods, as, manufactured tobacco, liquors, and the like. WHY THESE TAXES ARE NEEDED. The national government needs money to pay :- 2. To support an army and navy; to build vessels, and keep up arsenals and forts. 3. To pay pensions. A. H.-23 4. To improve the rivers and harbors. 5. To pay the salaries of its officers; as, the president, cabinet officers, judges, ministers to foreign countries, congressmen, etc. Indirect taxes levied by the government on imported goods or merchandise are called duties or customs. Duties are of two kinds, specific and ad valorem. A specific duty is one levied at a specified sum per yard, gallon, ton, etc. An ad valorem duty is one levied at a certain percentage of the value of the goods, at the port of export. A custom house is a government office where duties are collected and where vessels are entered and cleared. Nearly every seaport of consequence has a custom house. So also have important towns near the Canadian and Mexican boundaries. Tare is an allowance made for the weight of bags, barrels, or cases, in which merchandise is shipped. Leakage is an allowance made for loss of liquids from casks, barrels, etc., in shipping. Breakage is an allowance made for the loss of liquids from bottles in shipping. Net weight is the weight after allowance has been made for tare, leakage, or breakage. Duties are reckoned on net weights. NOTE.- Teach indirect taxes at the time you take up that part of commercial geography which deals with imports and exports. Problems are not for their practical value, but simply to give a clear knowledge of what is done. PROBLEM: Find the duty on 420 sacks of coffee, each weighing 175 lb. gross, and invoiced at 9 per pound. The tare is 500 lb. and the duty 20% ad valorem. WORK AND EXPLANATION: = Weight of 420 sacks is 420 × 175 lb. 73500 lb. Tare is.. Net weight.. Its value is 73000 × 9 = $6570. The duty is 20% of $6570 = $1314. 500 73000 lb. PROBLEM: Find the duty on 4 doz. bottles of cologne, allowing 4% for leakage and 3% for tare. The invoice value is 90% a bottle and the duty is 25% ad valorem and 20 specific. Find the total cost per bottle. WORK AND EXPLANATION: Leakage and tare are 4%+ 3% = 7%, 4 doz. bottles = 48 bottles. The invoice value of 48 bottles is 48 × 90 = $43.20 Tare and leakage are 7% of $43.20 Value on which duty is paid. ...... = $ 3.024 $40.176 Ad valorem duty is 25% of $40.176 = $10.044 = 9.60 NOTE.-A little work in duties may have some value for pupils who live in or near ports of entry, or for those whose parents are interested in the import or export trade. As a rule, it is not profitable to spend much time on it. INSURANCE. TALK: In recent years insurance, in some form, has grown to be of interest to almost everyone. In view of this fact, it seems wise that the older pupils be given some elementary knowledge of it, and of the problems it presents. Insurance is a guarantee to indemnify for loss or damage for a certain time, or to pay a definite amount on the happening of a named contingency. Property insurance is a guarantee to indemnify against loss or damage to property. It includes fire, marine, live-stock, transit, etc. Life insurance is a guarantee to indemnify against loss by death, sickness, or injury. It includes ordinary life insurance, accident, sick benefit, etc. "Old line" insurance is where the insurance is taken in the large life corporations. 66 'Fraternal" insurance is where the policy is issued by some fraternal organization. The policy is the written agreement between the insurance company and the person taking out the in surance. NOTE. Use actual insurance policies here, if they can be procured. If not, the illustration in this HELP may be used. The insured, or assured, is the person on whom the policy is issued. (This is in life insurance.) The insurer, assurer, or underwriter, is the company or person who issues the policy. The beneficiary is the person named in the policy to whom the insurance money is to be paid when due. The risk is the sum in which the insurer is liable in case of loss. It is the face of the policy. The premium is the sum paid for the insurance. It is reckoned on the risk. The risk taken differs. On personal property or goods in transit, the risk usually covers the full value. On other property, companies usually insure at from two-thirds to three-fourths of the full value. This, in a measure, protects them from deliberate destruction of property by the insured. The rate is the per cent of the risk used to compute the premium. once each NOTE. Fire insurance is sometimes renewed year, though it may be for other periods. Life insurance may be for life or a period of years, the premium to be paid annually or oftener. Endowment policies are common in life insur ance. They may be for any period of years, as 10, 15, 20, 30, etc., with a premium payable each year. They may be for any of these periods and have only one premium payment large enough to cover the whole. The premiums may be paid annually for only a part of the time the policy runs, as, a 10 payment 20 year policy. Premium payments on this would be made annually for 10 years. The policy becomes due in 20 years. Life policies are payable only at death. This form of policy may call for a single payment premium, premium annually for a term of years, or premium annually until death. Dividends. Most large insurance companies put their rates on life insurance high enough to meet all contingencies that may arise. The death rate may for some reason be increased, or the company not be able to get as high a rate of interest for its loans. In consequence, a surplus often arises. This surplus is disposed of by the payment of dividends to the policy holders. |