The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1899-01-05

which should equitably and Justly be- as-s
signed to 1t.
L The total amount 81 taxes paid on the
gross earning OF the railroads IN tiliss
I state for the year ending Dec 81, 1887,
Il was $1,127.050.24, The mileage Is some
r thing over six thousand miles. iA valta-
I ton Of the railroad property In the state
In the same proportion that other prop
erty Is valued, would probably not fall
!. below SIC, 900 per mile on ali, average. AT
this low valuation, a rate Of taxation, the
same as. Is imposed on other property An
the state, ~ mills on the dollar would
have brought 81. 440, 600 for the current
year. So 1T will be seen that our ratio ofs
taxation on railroad property on the basis
/ OF valuation is only about tw0-thirds that
OF the other property in the gtate. XII
You will also find upon Investigation
that our rate of taxation by percentage on
the gross earnings IL much below the rate
that prevails in our sister states, which
are within the domain OF the systems
transacting most OF the business In our
state: All Of our railroads, with the ex-
ception Of possibly one are Interstate
reads and are not operated with reference
TO state lines but as systems. The COM
nantes do not keep separate accounts In
/ each state. For the purpose of taxation
they apportion the gross earnings Of the
system among the several states through
which they run in proportion to the mile
age in each. This is the only practicable
way and is approximately correct and
fair. So far as our railroad traffic is con
cerred, we are to all intents and purposes
one jurisdiction with Northern Illinois,
Iowa and Wisconsin,, and TO some extent
with the states west Of US. This group
of states are on the whole traversed and
dominated by the same systems, and the
business of each system operating within
the group Is treated as a unit. Our state
Is therefore aside from the need of rev
oil tn f.N fof
obtains substantially as large proper
ton of the earnings of these companies
for the support Of its government and in
stttut!ons as is taken by the other states
In the group If we do not insist upon
this, we simply compel our people to help
pay taxes in the other state II our rail-
roads were confined in their business Oper-
atoms wholly within the boundaries Of
this state, the rate of taxation imposed
would perhaps not be so material,
for a high rate of taxation would
necessarily in the course Of time, be
reflected in higher transportation rates;
so also a lower rate of taxation would
have a tendency to produce lower trans
portation rates, but inasmuch as we are
part and parcel Of the states referred to
for transportation purposes, VIC cannot In
justice to ourselves be governed by any
such considerations, unless they are also
needed by other. states in the group
Iowa, and Illinois have already secured
materially lower transportation & rates
than wne have. If we continue to also per-
nit them to exact higher rates Of taxa
ton from the railroads which operate in
those states, and in ours, than we collect,
manifest injustice will be done to our
people. The maximum rate of gross earn
1ngs tax in Illinois is Z per cent; in Wis
consin per cent, in Iowa per cent in
our own state 5 per cent. The average
rate actually collected I'm the several
states is 2.8 per cent in Minnesota, s3.5
per cent in Wisconsin, SO per cent in
Iowa, per cent in Illinois, as appears by
the statement furnished by the board Of
railroad and warehouse commissioners.
The average rate Of gross earnings tax
collected in the three states named is
over 4.3 per cent; more than one third
| higher than the rate imposed in this
state. In other words, if the railroads
| had been subjected to the same rate of
taxation in this state as the d yeragei of
The rates in Iowa, Wisconsin, and Illinois.
we would have received last year over
| $1,7O0,O 900, instead Of something over
| $1,100,0OO. This is a condition of affairs
which neither the legislature nor the ex-
! ecutive can ignore I am also advised
that notwithstanding the fact that Wis
conslns25 already collects much larger
| rate than we do, and on less volume Of
business the executive of that state will
| urgently recommend to the legislature al
the ensuing session to increase the rate
| now in, force, to keep pace with the in
| property IN the state. That, also, Is a
| feature that should not be lost sight of,
| for increased taxation and higher civili-
| eaton go hand In hand. s
| / That some action be taken by your
body upon this subject at this session Is
imperatlvely necessary. This, for the
| reasons stated, as we'll as for the fact
l hat ha 1Quu tn. ,1y,or al
and unjust in that they discriminate be-
tween the different companies in the
state. ; e. - 81
The Chicago Great Western railway
which is operating under an old terrific
rial charter which fixed the rate Of taxa
ton at per cent on the gross earnings
has not accepted the provisions Of the
saltwater act,' unde: section l of chap
ter H., Of the General Laws of 1887, and
therefore contends that it Is liable to pay
| only 2 per cent. AS we have no genera
provision of law imposing the per cent
gross earnings tax, it is probably right IL
it's contention, at least, it has prevailed
i time, and, it is therefore impera lively
necessary that legislation should be en-
| acted to cover this case.
I am fully aware that the argument
will be used before you that it is unsafe
to attempt any revision of the gross
earnings TAX law IN TINS StaLes that Dy
50 doing you will jeopardize the benefits
that the state now derives from tina.
method Of taxation From the fact:
l stated you may conclude that these ben
fits are not on the side of the state,
will also be we'll to bear in mind that thu
same argument was made in opposition
to the Anderson bill. It should be at
discount by this time. $50 s
There is no question but that the com
panies will much prefer to pay reason
able gross earnings tax than to have thei
property and franchises taxed upon N,
valuation. They have chosen that cours
in Wisconsin and other states, though
the rate as I have shown is much highe
than. the rate that prevails here. But i
it is feared that any company might re
sist the payment Of higher gross ear
nlngs tax than is now levied on tn
ground that it is in violation Of fedora
Il law to impose a tax upon the incom
from interstate commerce, and as a pre-
caution, you can readily obvate this diff
fculty by also enacting an ALTERNATIVE
mode of taxation, providing: That in tn
event that any railroad company, subjec
to the payment Of taxes in this state
shall refuse to adopt and abide by tn
rates Of taxation on gross earnings whic
II you establish in communication OF othe
Fl forms of taxation then the DrOnertv an