Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1897-01-23
THE CAPITAL STOCK TAX.

Under the existing law, corporations
are required TO pay tax OF twenty
five cents on each thousand dollars OF
their capital stock at the time OF filing
articles OF incorporation. This tax is,
in some casps, heavy burden, as
when the capital stock OF a corpora
ton conssts in property other than
cash, which is net Intended to be
turned into cash, AMI which has only
aspecnlativo value.
Mining elaine, land claims, water
rights. etc., are examples OF this class
OF property. The owners lack means
to develop and bring out the value
they believe to be confined in their
property, but by Incorporating ard
selling shares can obtain working cap.
itai. The tax which must be paid on
the speculative value attached to the
property to be developed ia often
serious bar 10 Incorporating.
The answer made to oil this is that
the tax is wholesome restraint on
"wildcsp schemes, and there is force
in this reply. But the desire OF the
Oregon Short Line railroad company
to Incorporate under the laws OF this
State brings up another phase
OF the subject. The company
wishes to be capitalized at sixty
million dollarp, and the tax it would
have 10 pay on filing its articles would
amount to fifteen thousand dollars.
1t is OF course in every way desirable
to offer every inducement and facility
to the capitalists who have purchased
the Oregon short Line properly to
improve, extend ana develop II, and
make this city the headquarters
of their system; and with this end in
view two or three bills have been In.
troduced at the present session Of the
Legislature, looking to reduction In
the capitalization tax.
The iavori,e plan seems to be TO let
tho present tax apply to smaller corpora.
lions, but to reduce it by u graduated
scale as the capitalization 10 made
larger. In other words small corpor-
ntion, under either OF the pending
bills, must pay heavier tax in pro.
portion to valuation than n larger one.
One of tho bills decreases the tnx by
degrees from twenty-five cents to ten
cent?. That Is to say, small corpora.
ton must pay two a half times as
much per Thousand on its capital stock
ms larger one.
Such proposition springs several
questions. Is law which 50 discfim-
mates In favor OF a rich aud powerful
company valid? II valid from a con-
stitutional standpoint, is II just OF poll
tio2 II such Discrimination can be
made In one kind Of tax, why can 1t
not be- in anoIhei?
Unnumbered legal authorities de-
clare that statute assessing a tax
must be equal 40 to burdens
and benefits, go far as practi-
cable. II 1t unnecessarily departs
from this rule, the courts will not
enforce Ii. Such is the law Of taxa
ton az applied to the usual msthods
of raising revenue by an al valorem
assessment.
At the last session of the Legisla.
ture, when the act under consideration
WIS pnsaed,a number OF members held
that the capitalization tax was In
reality lieense fee, charged for the
privilege OF doing busiRess In this
State,and that Licences might properly
be classified MS merchants are, Accord
ing to their capital stock, and the
smaller ones required to pay more In
proportion than the large ones.
Without admitting or denying the
soundness OF all this, in law, the fact
remains that discrimination Is made
whom small company is maue to pay,
for the privilege OF incorporating, n
heavier tax pro rata than a large one,
and 1t ia a Discrimination against the
poor and weak and In favor OF the
rich and powerful. Is It desirable to
put upon the statute book Of our young
state u law that Is open TO this Obj co.
tionf
The State needs revenue, and cor
porations on coming into existence
aud receiving tbs benefits OF It's laws
may justly and properly be taxed. But
lie 1t not best aud more just to tax them
all alikt2 In reply to the objection
that very large sum would have
TO be paid by a corporation
heavily capitalized, as in tue case
OF the Short Line company, il
may be ssid that maximum
sum could be fixed, more than which
no corporation need pay, no matter
what its caplIallz ,tion.
II the present law were 20 amended
as 10 establish this maxlmum,it would