The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1899-01-05


west of us. This group of states arc on tho
whole trayersed and dominated by the same
operating Within the group Is treated treat as
need Of the reyenue) Interested in seeing ee ' t.
1t that 1t obtains substantially as large
proportion OF the earnings Of these companies
tu tns taken BY the sar states ae II
we simply compel our people To help pay
were confined in their business operations
wholly within the boundaries of this state.
the rate Of taxation imposed would perhaps
not be so material. for high rate OF taxa
ton would necessarily in the course of time.
be reflected in higher transportation rates.
SO also lower rate of taxation would have
a tendency to produce lower transportation
rates. but inasmuch as We are part and
parcel Of the states referred to for transpor-
tation purposes, We cannot In Justice to our
selves be governed by any such consldera-
tons, unless they are also needed by the
other states in the group. Iowa and Illinois
have already secured materially
LOWER TRANSPORTATION RATES
than We have. II we continue to
also permit them to exact higher rates Of
taxation 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 earnings TAX in
Illinois Is per cent; IN Wisconsin, per
cent; in Iowa, 4 per cent; in our own state,
8 per cent. The average rate actually col
lected in the several states is 2.8 per cent in
Minnesota; $50 per cent in Wisconsin; $50
per cent in Iowa; per cent in Illinois, as
appears by the statement furnished by the
board of railroad and warehouse commission
ers, which l append. The average rate of
gross earnings tax collected III the 3 states
named is over 43 per cent-more than 1-3
higher than the rate imposed in this state.
! In bther words, If the railroads had been
subjected to the rate of taxation in this
state as the average of the rates in Iowa,
Wisconsin and Ilinois,s we would have. re-
ceived last year over $1700,0 900. instead of
something over 81, 100, co., This Is condition
Of affairs which neither the legislature nor
that notwithstanding the fact that Wisconsin
already collects a much larger rate than-we
do, and on a less volume of business, the
executive of that state will urgently recon-
ment to the legislature at the ensuing session
to increase the rate now in force to keep
pace with increase in the rate of taxation
upon other property in the state That also
| Is feature that should not be lost sight of
for increased taxation and higher civilization
go hand IN hand
That some action be taken by your body
upon this subject at this session is impera-
lively necessary. This, for the reasons stated
as we'll as for the fact that the laws now in
force are unequal and unjust in that they
discriminate between the different companies
Of the state.
The Chicago Great Western railway, which
Is operating under an old territorial charter
which hXes the rate of taxation at 2 per cent
on the gross earnings, has not accepted the
provisions of the saltwater Act" under sec
ton L OF chapter II. of the General Laws of
1881, and therefore contends that it Is liable to
pay only per cent. AS we have no general
provision of law imposing the per cent gross
earnings tax, 1T is probably right in its conten-
ton, at least, it has prevailed with the state
authorities up to this time, and it Is there
fore imperatively necessary that legislation
should be enacted to cover that case.
WHAT 1T WILL MEET.
1 am fully aware that the argument will
be used before you that it is unsafe to at
tempt any revision of the gross earnings
tax law in this state; THAI by doing you
will jeopardize the benefits that the state
now derives from that method of taxation.
from the facts stated, you may conclude that
these benefits are not on the side of the state
1t VIII also be well to bear in mind that the
same argument was made in opposition to
the Anderson bill. 1t should be at a discount
by this time.
There is no question but that the companies
Will much prefer to pay reasonable gross
earnings tax than to have their property and
franchises taxed upon valuation. They have
CHOSEN that course in Wisconsin and other
states, though the rate as l have shown is
much higher than the rate that prevails
here. But if it is feared that any company
might resist the payment of higher gross
earnings tax than is now levied on the ground
that it is in violation of federal law to i'm
pose tax upon the income from Interstate
commerce, and as a precaution you can
readily obviate this difficulty by also enaetine
an alternative mode of taxation, providing:
That in the event that any railroad com
pany, subject to the payment OF taxes in this
state, shall refuse to adopt and abide by the
rates OF taxation on gross earnings which you
establish in communication of other forms of
taxation, then the property and franchises of
such corporation shall be taxed upon valu-
atlon the same as other property in the state
and at the average rate of taxation in the
state; thus leaving it to the corporations
themselves to determine whether they will
pay taxes on valuation. the same as the
other property in the state. or accept your
gross earnings communication plan ia lieu of
that form of taxation. You could go one step
farther and authorize the companies to
FIX THEIR OWN VALUATION
with the proviso that the valuation SO fixed
should be the valuation and basis for de-
termlning transportation rates we'll as for
taxation.
With such an alternative before them you
need have no fears that they would reject
any reasonable gross earnings rate. They
pody: that they cannot escape payment in
one form or the other. and they will be glad
to avail themselves of the gross earnings tax
as the least burdenSome. Otherwise, it means
the more money for the state treasury.
Thus far have only discussed matters re-
lating to the better adjustment of the bur-
dens of taxation and the sources to which
you can look for additional revenue to meet
the growing wants of our progressive state
without further burdening. persons or proper
| connected with this inquiry and equally i'm
portant is the subject of utilizing to the
greatest advantage to the people of the state
the moneys raised by taxation.
By well considered legislation the state
may be able to utilize its different re-
sources for raising revenue by taxation that
the rate may be reduced and still an increase
secured in the revenues But it is idle in a
| young state like ours, with constant and
rapid growth in population. to speak about
decreased expenditures. What we can rea-
sonably hope for, and what we should insist
| upon attaining, is not necessarily a reduc-
| ton in aggregate expenditures, but a system
| of management and administration in all
| public affairs that will give the people the
| greatest possible efficiency and the largest
possible returns for the money expended
! This is as true with reference to our schools
| as it is in regard 10 our correctional and
! charitable institutions.
SUBJECT OF EDUCATION.