The Brookhaven leader., 1891-02-05

the graduated tax can not be shifted.
but It possesses many peculiar and In
valuable attributes and properties.
For instance, IL would
Equalize all profits, opportunities and
localities;
Annihilate trusts and eliminate wa.
tered stocks;
Utterly destroy land monopoly;
Compel each person to pay his or her
own taxes.
Above all, force the wealth rather
than the poverty of the Nation to pro.
vide its revenues.
What is a graduated tax?
1t is a tax which, commencing at a
basis rate upon a certain valuation, in.
creases its rate in certain progressive
ratio TO the increase in assessed valua-
ton. For instance, upon 81, 200 or less,
the basis rate might be one and one.
tenth per cent, and with each increase
of valuation of 81, 900 the rate might be
increased one-tenth of one per cent; sc
that at $4,000 the rate would be two
per cent. Then increase the rate one
tenth of one per cent. for each $4,000
increase in valuation, up to $500, 900, al
which value the rate of tax would be
five and nine-tenths per cent. Then in
crease one-ffth of one per cent for
each $1,000 increase in value, and sc
on.
What is a cumulative valuation?
1t is valuing for purposes of taxation
each and all pieces of property belong.
ing to any one individual, in any one
taxing district as if they were all adj
joining or, in fact, one piece of proper
ty; and then levying against each piece
of property the graduate rate of tax,
applicable to the valuation of all the
pieces.
For example: A has 100 acres of
land in body, value $1,000, tax one
and one-fifth per cent. b has 100
tracts of 100 acres, each worth $4,000,
total value 500, 900; tax on each tract,
two and nine-tenths per cent Now APP
ply it to city. Take two merchants.
A is in business In a small way; his
building, lot and goods being worth
10000; his rate of tax is two per cent.
b is in better portion of the city,
has lot, building and merchandise being
worth 5000, 900; his rate of tax would be
six and one-tenth per cent. Both of
them can, of course, shift the basis rate,
or one and one-tenth per cent; but
neither can shift more than that. A
will be held in check by the small fry
close to him, who pay only the basis
rate. b will have to sell goods at four
and tenth per cent more profit than
A does in order to shift his tax, in
which event A will take all his trade.
B will more than likely have to sell for
less per cent. of profit than A does,
as if A is smart and good advertiser,
four per cent. difference in taxes will
make up for the difference in localities
occupied by b and himself. Friendly
reader, do you see how it works? Study
it out, each for himself
Now apply it to trusts and combines.
To vacant lot holders and land monop-
olists. To corporations with watered
stock. To bonanza farms" Apply it
anywhere, everywhere, to all things.
1t will not be found wanting. One word,
however: 1t will not touch natural
monopolies, in the operation of which
there is not, and indeed can not be, any
free, full and fair competition. A rail
road Is natural monopoly.
And now for Mr.. Bennington's plan
for the more equitable taxation of rail
roads. Briefly stated, he proposes to
assess railroads for purposes of taxa
ton, at the value at which they are held
by their owners, as evidenced by the
face value of their interest paying bonds
and dividend paying stock shares.
This appears upon its face to be plaus-
ible and practical, as it most assuredly
Is just, righteous and equitable. But
would it do any good? No-most de-
cidedly no! A railroad tax is simply
an indirect tax upon the general public.
Nothing more. The railroads pay no
tax They simply collect, for the State,
tax from the general public. Mr..
Bennington himself says:
"When a railroad company proceeds
to fix it's rates and fares, out of which
it figures its interest or profit, does il
take the actual value of the road OF
does it take the stock of the company.
All agree that they take the latter.
The rates and fares that you and pay
in almost every instance are made ex.
orbitant, thereby requiring us to pay
interest or contribute to dividends on
watered stock of fictitious value"
1t is strange that it did not occur to
Mr.. b that as long as the railroad COM
panies themselves fix" their rates
and fares" they will be very careful to
make their rates sufficiently high to
cover all fixed charges and operating
expenses and leave enough to pay in.
terest and dividends. AS the State
raises their taxes they will raise their
rates and shift their taxes on to their
patrons. The only way to avoid this
result is for the State, instead of the
railroads, to fix rates and fares" But
upon what basis? Surely not sc
as to pay interest and divi
dends upon the present watered
stock and fictitious value. They
would probably, gladly guarantee the
collection of the increased tax from the
people, if the people would guarantee
the interest and dividends upon the
present capital stock and bonded in
debtedness. OF course on the other
hand, it would be unjust to tax them
on the face value of bonds and stocks
unless their rates were so fixed" as to
pay, net, the interest and dividends on
same as we'll as the taxes.
What then is the proper course to
pursue? just this: Cease entirely the
taxation of railroads. Deduct from