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

HEures ere IN rouEa numbers: real prop
erty $a6C, 600, 600; personality, S1OO. 900. 900.
To gey at the remaining PERSONAL prop asSp.
erty n to substitute some other method
of Obtaining revenue more just and efti-
Scie MT than the present antiquated systofn'
of tjxing personality. Is the problem. To
solve this, believe with my predecessor
thai a commission should be appointed,
II action were taken by you In that be-
hyif at once, q report might be obtained
II time for consideration at5this session. Il
w Corporate TaKatiOn. $S#s 81
( Akin to the question discussed. but sep
arate and distinct from IT., and not in
ianywise dependent upon Its disposition Is
the subject Of licensing and taxing corpo-
rations. BY wise and we'll considered leg
islation on this subject. you can obtain
an amount OF revenue that will more
than make up for the proposed reduction
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 direct tax
for the revenue fund can be dispensed
with. Our law now requires the payment
of a minimum Incorporation fee Of 500
to obtain a corporate charter. and in ,ad.
dition, one-tenth of per- cent on the
capitalization In excess Of $5O,ODO. This
provision is bringing large sums OF money
In to the treasury annually. 1t can and
should be extended to foreign corpora
would only be a measure of Justice to
ourselves and to our own business In
terests. The license lee should be uni
form with that imposed on our domestic
corporations and may then be collected
on the entire capital stock of the foreign
corporation, or on that portion Of the
capital engaged in business In this state,
as is the law in New York. Either
course Is valid, and has been sanctioned
by the courts of last resort both state
and federal. Much of the time of our
courts, especially in the rural districts,
is occupied by litigation brought by for
eign corporations. who in the past have
contributed nothing to- the expense Of
government. This license fee, like that
collected upon the issuance Of a domestic
charter, would be payable only once.
In addition to this, many of our sister
states levy and collect an annual fran
chise tax upon corporations. Domestic
corporations and foreign corporations do
ing business in the state are alike subject
to it with such exceptions as the legis-
latures have chosen to make. This, it
seems to me- is one of the most available
as we'll as legitimate sources that you
can turn to for revenue without burden
iEg the individual citizen The tax, In
itself, is a just one, both on economic
grounds and from the standpoint of public
policy. , .x.e.@ liz.
practically self-enforcing. If a domestic
corpora ton refuses to pay, such refusal
can be made cause of the forfeiture OF
the charter. In case of the foreign cor
porations, they can be denied the process
of our courts. This is the law in New
York. What has been said with reference
to domestic corporations applies with
greater force to the numerous foreign
corporations doing 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. 1t is
not necessary that all corporations
should be subjected to the tax. Those in
regard to which the state has adopted a
special method of taxation should be ex-
copied. New York also excerpts manu-
featuring companies which carry on the
business OF manufacture wholly within
the state. But these are matters Of de-
tail to which it is not deemed necessary
to further call your attention.
The legislation now in force for taxing
express, telegraph, telephone and sleeping
car companies in this state is in my judy
ment radically defective and should be
revised. The rate imposed Of 3 per cent
on gross earnings computed solely on 10
cal business originating and ending
within .he state''-is grossly inadequate.
Most Of the railroad companies pay 3 per
interstate as we'll as the local. The earn
ing capacity and rate of profit on the
actual capital invested in the monOpolies
referred to are certainly greater than in
railroading, and there is no good reason
why the state should not collect a fair
proportion of it's revenues from that
source. It Is not alone the rate of taxa
ton imposed upon these monopolies Il
use the term monopoly in its economic
sense) that needs revision. It is the basis
for computing it which is wrong. Stu
ated as is our state on the highway of
commerce between two oceans. with our
large centers of population near the state
lines, it is but a small proportion of our
| business that IS strictly local, that is to
say, business originating and ending
within the boundaries of the state. I'm
| der these circumstances, the business done
; wholly Within the state is manifestly nc
! criterion by which you can judge either
| Of the actual intrinsic value of the prop
| erty subjected to taxation or the actual
| amount of revenue derived from it's use
| both of which items are factors In
| making a proper estimate Of it's value and
! Of the revenue which should be exacted
| by the state. Besides, this basis for com
| putting taxation is necessarily capable oil
| gross: abuses. Our law was evidently
| COPIED from the Wisconsin law. I'm
der the Wisconsin law, which linn.
| its taxation on sleeping car com
| panies to the gross earnings from bust
J ness originating and ending wholly with
! in the state 1.-THE same as ours), the com
! panies have adopted a rule by which the,
refuse to sell sleeping car tickets from
point within the state to a point near thu
state line when there is a city beyond thu
state line, but insist for instance, on sell
ing a ticket for Madison to Duluth to pas
! sengers going to Superior as discovered
4 by personal inquiry. A system that lead:
to such subterfuges cannot be reformed
| too speedily. a.
| To impose a percentage tax, or any ia,
levied directly on the gross earnings, stat,
/ and interstate, of these monopolies, would
be held a violation Of the federal con
1 stitution. The tax whether 1t be 3 pc
cent Or a greater rate, should be comput
| ed on a valuation of the corporation
property employed in its business in Thu
state. The method for arriving at sucl
valuation, and the only plan by which
i a proper rate of taxation can be fairl.
and legally imposed, is according to tn
provisions Of chapter 100 Of our laws TO-
1897. This act appears to have been care
i fully drawn, is in admirable form, ant
similar legislation has been upheld b.
the supreme court of the United States OF
appeals from the states of Maine, Penn
sylvania, Indiana and Ohio A chang
in the basis for computing these taxes t
/ that prescribed in the chapter referred to