Little Falls herald. [volume] (Little Falls, Morrison County, Minn.) 1889-1950, 1899-01-06

believe with my predecessor that COM
mission should be appointed. If action
were taken by you in that behalf at once,
u report might be obtained in time for
consideration at this session.
CORPORATE TAXATION.
Foreign Companies Should he Treated
the Same AS Domestic Ones.
Akin to the question discussed, but
separate and distinct from it, and not in
anywise dependent upon it's disposition is
the subject Of licensing and taxing cor
porations. By wise ana well-considered
legislation ON this subject, you can OBJ
tain an amount of revenue that will
more than make up for the proposed re-
duction in the tax levy and which will,
with other corporation taxes, in the course
Of time. increase the permanent revenues
Of the state to such an extent that q di-
rect tax for the revenue fund can be dis
pensed with. Our law now requires the
payment of a minimum Incorporation fec
OF 500 to obtain IL corporate charter, and
in addition, one-tenth Of l per cent ON the
capitalization in excess of $50, 600. This
provision is bringing large sums of money
into the treasury annually. 1t can and
should be extended to foreign corpora
tons doing business in this state. This
would only be Il measure of justice to our
selves and to our own business interests.
The license fee should be uniform with
that imposed on our domestic corpora
lions, and may then be collected on the
entire capital stock of the foreign corpor-
alton, or on that portion Of the capital
engaged in business in this state, as is the
law in New York. Fit her course is valid
and has been sanctioned by the courts of
of last resort, both state and federal.
Tax OH Foreign Corporations.
In addition to this, many Of our sister
states levy and collect an annual fran
chisc tax upon corporations. Domestic
corporations and foreign corporations do
ing business in the state are alike subject
to it, with such exceptions as the leglsla-
lures have chosen to make. This, it seems
to me. is ono OF the most available as we'll
as legitimate sources that you can turn TO
for revenue without burdening the indi-
vidual citizen. The tax, in itself is a just
one, both on economic grounds and from
the standpoint of public policy. The cor
poration permits the union of the capital
of several owners in u way peculiar to that
form of organization. 1t gives the mass
a solidarity and efficiency that can never
be attained in IL partnership. It is we'll
recognized fact that there is an economic
advantage in the harmonious co-opera-
ton of numbers over individual effort.
The business of the corporation is not in
terrupted by the vicissitudes that befall
individuals 1t enables the owner OF lin
tied capital to participate in undertakings
that would be beyond his reach but for
it's aid. II business reverses befall the cor
poration the shareholder is only liable for
its losses to a limited degree Numerous
other advantages might be referred to,
but this is enough to show that the state
ooufers special value when it grants a
corporate charter The state comforting
these special powers and privileges, which
are constant and continuous in their
character, it is clearly just that an
Annual Return Should He Rendered
for them. 1t is no sufficient answer to say
that the capital is taxed in the property in
which it is invested. The capital as such
would be liable to taxation in whatever
form. This principle cannot be better ex-
pressed than in the language of the Su-
prone Court of the United States (143 U.
5. 1907. The court says: "The right and
privilege, or the franchise, as it may be
termed, Of being Il corporation, is of great
value to it's members, and is considered as
property separate and distinct from the
property which the corporation may &C
quire, According to the law Of most OF
the states, this franchise or privilege of
being corporation is deemed personal
property, and is subject to separate taxa
ion.". The state having conferred the
franchise-the special valle-is entitled to
the taxes imposed. 1t Is one of the easiest
taxes to collect; practically self enforcing.
If Il domestic corporation refuses to pay,
such refusal can be made cause of the for
fixture Of the charter. In case of the for
i, eign corporations, they can be denied the
process of our courts, This is the law in
New York. What has been said with ref
erence to domestic corporations applies
with greater force to the numerous foreign
corporations doing a large and lucrative
business in this state, such as the various
machine companies, the loan companies,
the various trusts, and mining companies
in the northern part of the state
Express, Telegraph and Other Taxation:
Referring to express, telegraph, tele-
phone and sleeping car companies, the
governor says that in his opinion the tax
Oh 3 per ceHt upon gross earnings on OuSl-
ness originating and ending within the
state is grossly inadequate, besides being
liable to abuse. Railroad companies pay
3 per cent of gross earnings including in
terstate business. The tax, he says,
whether it be 8 per cent or a greater rate
should be computed upon the valuation
of the. corporations property employed in
business IN the state
TAXATION OF. RAILROADS.
Rate on Such Property, Ii Considered
/. - :. Too Low. r. 4S%.4f.. 80:
Another branch. of: taxation that de:
mands your earnest attention and we'll
considered action is that Of thesfranchises
md property of corporations engaged in
transportation by railroad in this state.
The total amount of taxes paid on the
gross earnings Of the railroads in this
state for. the year ending Dec. 81, 1897, was
81 JET ,:50.2sI. The mileage is something
over 90 miles. a valuation Of the rail